Friday, February 17, 2017

6 Factors Affecting Garment Pricing

Once the garment is manufactured it is subjected to be sold in the market. The market may be the same as where it was manufactured or in another part of the world. Nowadays, due to price competitiveness, normally the garments are manufactured in one part of the world and sold somewhere else. So after the garment is manufactured in a company, various other types of costs are involved or added before being sold to the final customer. Pricing of the garment can be done by manufacturing cost (CM) added with estimated mark-up or profit % to it.

Factors affecting garment costing or pricing
Since pricing or costing impacts directly on profitability, so it is decided carefully considering many factors. If the product is new and first in the market, then the company may achieve a first-mover advantage and set the retail price higher, as opposed to when the product becomes generic the companies will have to reduce the prices in costing sheet. There are some key factors which has considerable affect on garments pricing. 
6 Factors Affecting Garment Pricing
Fig: Readymade garments
Top 6 factors which directly affecting pricing are given below:
1. Brand recognition: Popular brands can be sold at a higher price due to brand acknowledgement and popularity. 
2. Nature of garment: The quality of the merchandise will decide its price and mark-downs. 
3. Garment size: Size specification is an important point for garments costing or pricing. After receiving an order, a garments merchandiser must confirm the correct size specification given by the buyer with order. 
4. Market pressure: Competition in the market is a major driving force behind the price decision. One company out of two, selling the same product will not be able to set the price higher; otherwise they will be out of the market. 
5. Supply and demand: In the case of low demand and high supply, the prices are to be lowered, and vice versa. 
6. Other costs: Inventory control, storage cost, pilferage cost, handling cost, alteration cost, delivering cost, etc. will also be an input in deciding the final price of a merchandise.