Costing Basics in Fashion: Understanding the Numbers Behind the Garment
- Gaurav Mandal
- Jul 19
- 2 min read
Updated: Jul 20
Costing is the backbone of any fashion business. While design and marketing may grab attention, pricing a product correctly starts with knowing your costs—down to the last thread.
This blog explains the basics of costing, how to build an open cost sheet, and includes a practical assignment with a case study from an Indian fashion brand to test your understanding.
Why is Costing Important in Fashion?
Fashion is a margin-sensitive business. Whether you're producing for retail, export, or multi-brand platforms, a single miscalculation can eat into your profits.
A good costing helps you:
Price your products competitively
Maintain profitability across seasons
Track expenses for raw materials, labour, overheads
Handle scale-up production without margin loss
Negotiate with vendors and buyers
Elements of a Fashion Cost Sheet
An open cost sheet breaks down every component that contributes to the product’s total cost.
Component | Details | Example (Kurta) |
Fabric | Price per meter x consumption | ₹150/m x 2.5 m = ₹375 |
Trims & Accessories | Lining, buttons, labels, tags | ₹40 |
Stitching/Labour | Tailoring and construction cost | ₹150 |
Embroidery/Printing | Value addition (hand/ machine) | ₹120 |
Washing & Finishing | Steam, ironing, tag attachment | ₹30 |
Packaging | Polybags, tissue, hang tags, stickers | ₹20 |
Quality Control | Inline + Final inspection | ₹15 |
Overheads | Admin, electricity, transport, rent share | ₹25 |
Total Cost | Sum of all above | ₹775 |
Real-Life Case Study: Dhara by Dharki (Hypothetical)
Product: Handblock-printed Mulmul Anarkali
Target Price (MRP): ₹3,200
Target Channel: Nykaa Fashion
MOQ: 150 pieces
Costing Breakdown:
Item | Cost (INR) |
Mulmul fabric (3.5 m) | ₹140 x 3.5 = ₹490 |
Lining (2.5 m) | ₹50 x 2.5 = ₹125 |
Block Printing | ₹85 |
Stitching | ₹180 |
Finishing & Tags | ₹35 |
Packaging | ₹20 |
Overheads | ₹30 |
Total Cost | ₹965 |
Platform Margin (Nykaa commission @38% + GST): ~₹1,200
Profit Margin Targeted: ₹400–₹500
Final MRP: ₹3,200
The brand maintains a gross margin of 60–65% while ensuring production is scalable and artisanal integrity is maintained.
Assignment: Build Your Own Cost Sheet
Choose one product from your collection (e.g., top, dress, kurta, shirt) and create an open costing sheet with the following format:
Cost Head | Details | Cost (INR) |
Fabric | ||
Lining (if any) | ||
Trims & Embellishments | ||
Stitching | ||
Printing/Embroidery | ||
Washing & Finishing | ||
Packaging | ||
QC & Testing | ||
Overheads | ||
Total Cost | ||
Platform Commission | Assume 35% if selling on Nykaa | |
Target Profit Margin | ₹500 or 20–30% of MRP | |
MRP (Final Price) |
Conclusion: Know Your Numbers
Costing isn’t just for accountants—it’s a designer’s secret weapon. It empowers you to plan your pricing, optimize your production, and grow your fashion business sustainably. Whether you're bootstrapping or exporting globally, a solid costing sheet is your first step toward profitability.
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