Apparel Costing Tips for Domestic and International Market

Clothing Market Analysis:
Apparel industry analysis or clothing market analysis plays an important role to achieve higher profit in readymade export business. There are so many who still don’t know the actual process of costing for both local and export business. As its Importance, this article has presented a details discussion on apparel costing techniques for both local and international market.

Apparel costing tips for domestic and international market
Fig: Apparel costing tips for domestic and international market
Apparel Costing Tips for Domestic Market:
The below factors to be considered while doing apparel costing for domestic market:
  1. Slaes tex- central sales tax (CST), state slaes tax, excise duty etc.
  2. Payment terms and condition- cash or credit.
  3. Distributor, wholesaler and retailers commission.
  4. Government rules and regulations, policies etc.
  5. Competitor’s price or substitute product price.
  6. Sales promotion activities and their related expenses.
  7. Nature and trend of the market.
  8. Brand image of the company or the products.
  9. Distribution channel and network and their related expenses.
  10. Insurance, if needed.
  11. Domestic demand for the product.
  12. Competition for the product.
  13. Discount policies- discount on payment, quantity, seasons and festivals etc.
  14. Packing styles of individual products.
  15. End user of the product- high class, middle class, youths, male, female etc.
  16. Inventory policies and logistics policies and their related expenses.
  17. Marketing and sales department expenses.
  18. Any other miscellaneous expenses. 
Apparel Costing Tips for International Market:
The following factors must have to consider while doing apparel costing for international market:
  1. Buyer requirements related to quality and other things- high quality level, normal quality etc.
  2. Service expenses- sampling, testing, R&D, inspection etc.
  3. Infrastructure and modern technology.
  4. Business visit to foreign countries and participation in trade shows and fairs.
  5. Foreign exchange rates.
  6. Mode of transportation and freight charges.
  7. Quota charges if needed.
  8. INCO terms followed in the order contract- FOB, CFR, and CIF etc.
  9. Documentation requirements, procedures and expenses.
  10. Order quantity- higher order quantity, lesser will be the profit%.
  11. Country of destination.
  12. Buyer’s policies and procedures- SA-8000, Oeko-Tex, Warp, ISO-14000 etc.
  13. Sourcing factors- global sourcing of raw materials, accessories etc.
  14. Agent’s commission- buyer agent, forwarding agent etc.
  15. Government policies, rules and regulations- excise duty exemption, duty draw back incentives.
  16. Payment terms and conditions- Document against acceptance (D/A), Document against payment (D/P), Telegraphic transfers (T/T), L/C at sight, L/C at credit, cash in advance etc.
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