Most first-time brand founders ask the wrong question. They ask "how much does it cost to make a t-shirt?" and expect a single number. There isn't one. The honest answer is that a garment's cost is a stack of six or seven separate line items, and the factory only ever quotes you the first few. The gap between what the factory says and what actually lands in your warehouse is where margins quietly disappear.
This is the part nobody explains clearly when you're starting out. A factory in Tirupur quotes you a per-unit price, you build your pricing around that number, and then freight, duties, a forwarder fee and QC inspection push your real cost well above the quote. You didn't get cheated. You just costed the garment wrong.
This guide breaks down every component of clothing manufacturing cost so you can model your true landed cost before you commit a dollar. The goal is simple: by the end, the factory quote should look like the starting line it actually is, not the finish line.
The seven layers of garment cost
Every finished garment that arrives at your door has passed through roughly seven cost layers. The first four happen at the factory and add up to the FOB price, the figure your factory quotes. The last three are entirely your responsibility, and they're the ones brands forget.
Here's the full stack:
| Cost layer | What it covers |
|---|---|
| 1. Fabric | The cloth itself, by GSM and fibre |
| 2. CMT | Cut, Make, Trim, the factory's labour |
| 3. Trims | Thread, labels, care tags, buttons, zips |
| 4. Packaging | Polybag, carton, hangtags |
| FOB subtotal | Layers 1–4, what the factory quotes |
| 5. Freight | Sea or air, origin to destination |
| 6. Duties | Import tariff on the FOB value |
| 7. QC + forwarder fees | Inspection and logistics coordination |
The first four layers are your product cost. The last three are your landing cost. Add them together and you get the only number that matters: landed cost per unit, what each garment truly costs you before you've sold a single one.
If you want a working sheet that captures all of this with the formulas pre-built, our garment costing sheet template walks through each layer. It's the kind of tool worth filling in before approving any purchase order.
Layer 1: Fabric, the biggest variable
Fabric is usually the single largest line item, and it's the one with the widest range. Two t-shirts that look identical can have fabric costs that differ by a wide margin, driven by three things: GSM (grams per square metre, i.e. weight and density), fibre content (combed cotton vs open-end, organic vs conventional), and mill pricing.
Heavier and higher-quality fabrics cost more both per metre and per unit. The actual figure varies by fibre, weight and order size, so treat any single price you see online as a rough orientation, not a quote.
The mistake here is accepting an all-in quote that hides the fabric line. When a factory says a flat per-tee price, you have no idea how much of it is cloth and how much is make. A cheap all-in number can hide a fabric you'd reject on sight once the sample arrives. Always ask for fabric to be broken out separately.
Layer 2: CMT, the labour everyone misunderstands
CMT stands for Cut, Make, Trim, the factory's labour to turn your fabric into a finished garment. It explicitly excludes the fabric and the trims; it's pure construction. Understanding what's in and out of CMT is one of the most common points of confusion, which is why we keep a plain-English entry for it (and every other term you'll hit) in the garment manufacturing glossary.
CMT is driven by two things: garment complexity and order volume. A basic knit tee is cheap to make; a structured woven shirt with collar, cuffs and plackets costs several times more. And the same garment costs more per unit at low volumes than at high ones, because the factory amortises setup, marker-making and line changeover across fewer pieces.
The volume effect here is real and it's the single biggest reason small orders feel expensive per unit. That ties directly into minimum order quantities, the MOQ a factory quotes isn't arbitrary gatekeeping, it's the volume at which their CMT math actually works.
Layers 3 & 4: Trims and packaging, small lines, real money
Trims are everything that isn't fabric or labour: sewing thread, woven labels, printed care tags, buttons, zips, drawcords, eyelets. For a basic tee, trims are minimal. For a structured garment with hardware, they climb. These are easy to underestimate because each component is cheap individually, but a hoodie with a drawcord, metal eyelets, a woven main label, a care label and a hangtag adds up fast.
Packaging is usually the smallest line, covering the polybag each garment ships in and that garment's share of the export carton. Custom hangtags add a little on top. Small, but worth costing rather than assuming.
Layer 5: Freight, where the FOB illusion ends
Here's where brands fall off the cliff. The FOB price is the cost of your goods sitting on the ship at the port of origin. Getting them across an ocean is on you.
Sea freight is the cheaper option per unit; air freight is several times more expensive, fast, but it eats margin. The catch is that freight has a large fixed component, so the per-unit cost is brutal at low volumes and reasonable at high ones. This is exactly why your order quantity changes your real unit economics, not just your total spend.
If "FOB" itself is fuzzy, it's defined alongside the other shipping terms (EXW, CIF, DDP) in the glossary, knowing which term your quote uses tells you exactly where your cost responsibility begins.
Layer 6: Duties, the line that varies by HTS code
Import duty is calculated as a percentage of your FOB value, and the percentage depends on your garment's HTS code (Harmonized Tariff Schedule). Rates vary by fabric content and construction, and they shift with trade policy, so there's no single number to memorise. Broadly, India's tariff treatment has generally been more favorable than China's for US importers, which is part of why so many DTC brands are looking at India in the first place (more on that in our guide to working with a clothing manufacturer in India).
The trap is using one duty rate for a mixed shipment. A jersey t-shirt and a woven jacket can carry different HTS codes and therefore different rates, even in the same carton. Look up every garment category's code and the current applied rate at usitc.gov before you finalise costing, since rates move with trade policy.
Layer 7: QC and forwarder fees, small per unit, huge if skipped
Two final lines round out the stack. QC inspection is typically billed per day, by a local agency or an international one (QIMA, Intertek, Bureau Veritas, SGS). Spread across a full order it's a small per-unit cost. Skipping it to save that money is one of the costliest decisions a brand makes, a failed shipment costs many times the inspection fee to rework or write off.
The freight forwarder fee is typically a flat charge per shipment. That flat fee is cheap per unit on a large order and painful per unit on a tiny one. Same fee, wildly different impact, which is the recurring theme of this whole breakdown.
Why order quantity drives so much of your cost
Several layers have fixed or semi-fixed costs that get spread across however many units you order: CMT setup, the freight forwarder fee, QC inspection. A flat fee that's trivial per unit at high volume becomes a large per-unit cost at low volume.
This is why the same garment can look unprofitable at a small order quantity and healthy at a larger one, and why factories push back on tiny orders. When you model your costing, run it at the volume you'll actually order, not a hypothetical big number, and not a single representative unit.
At landed cost, the discipline is to back into retail. Take your true per-unit landed cost and the margin multiple your business needs, and that tells you the retail price the product has to support. If the math doesn't work, the answer is usually repricing or rethinking the product, not chasing a cheaper factory.
For a row-by-row version with multiple volume scenarios modelled side by side, work through the garment costing sheet template.
How to decide: should you cost this yourself, or have it done?
Once you understand the seven layers, you face a practical choice about how much of this you carry yourself.
Cost it yourself if you have a single, simple product, a factory relationship you trust, and the time to chase line-item quotes, look up HTS codes and book freight. The math isn't hard, it's the legwork and the not-knowing-what-you-don't-know that trips people up. If you're at this stage, our guide on how to find a clothing manufacturer covers vetting factories before you ever request a quote.
Have it managed if you're juggling multiple styles, you don't yet have factory relationships, or you've been burned by a quote that ballooned at landing. This is where a sourcing platform earns its place. Greige, an AI-powered garment sourcing platform, costs every style across all seven layers before a brand commits to a purchase order, line-item FOB, freight, duty by HTS code, QC and forwarder fees, and charges a percentage of production value for the coordination. The point isn't to add a layer; it's to make sure no layer surprises you after the goods ship.
Either way, the discipline is the same: never compare a factory quote to your retail price. Compare landed cost to retail price. That's the only comparison that tells you whether you have a business.
Build your full cost breakdown before you commit
If you're about to place your first order, or your last one came in more expensive than you planned, get the numbers right before the money moves. A sourcing call walks through your specific styles, volumes and target margins, and gives you a landed cost you can actually trust.
Book a sourcing call, we'll cost your styles line by line, no commitment.
FAQ
How much does it cost to manufacture clothing? There's no single number, cost is a stack of seven layers. The factory quotes you the first four (fabric, CMT, trims and packaging), which add up to the FOB price. Then you add freight, import duty, QC and forwarder fees to reach your landed cost, which is meaningfully higher than the FOB quote. Costs vary by fabric, garment complexity and order size, so model your own numbers rather than relying on a benchmark.
What is the difference between FOB price and landed cost? FOB (Free On Board) is the cost of your goods at the origin port, fabric, CMT, trims and packaging. Landed cost adds everything after: freight, import duty, freight forwarder fees and QC inspection. Landed cost is the real number to compare against your retail price; FOB always understates your true cost.
What is CMT in clothing manufacturing costs? CMT stands for Cut, Make, Trim, the factory's labour to turn your fabric into a finished garment, excluding the fabric and trims themselves. CMT is driven by garment complexity and order volume. Lower volumes cost more per unit because setup is spread across fewer pieces.
Why does order quantity change my cost per unit so much? Several layers have fixed or semi-fixed costs, CMT setup, the freight forwarder fee, QC inspection, that get spread across however many units you order. A flat forwarder fee is cheap per unit on a large order and expensive per unit on a small one. This is why the same garment can look unprofitable at a low quantity and healthy at a higher one, and why factories push back on tiny orders.
Do I have to pay import duty on clothing made in India? Yes. US import duty is calculated as a percentage of your FOB value, with the rate set by your garment's HTS code and varying by fabric content and construction. India's tariff treatment has generally been more favorable than China's for US importers, but rates change with trade policy. Look up the exact, current rate for each garment category at usitc.gov before you finalise costing.