The global apparel manufacturing sector was valued at over $900 billion in 2023. Despite the advent of automation, more than 60% of production costs are still attributed to sewing. The typical cost reduction per unit for brands sourcing from low-wage countries is 30-50%. Knowing the pricing and cost elements will not only help you save money but could also save you from making costly mistakes. Here's the true breakdown of sewing and garment production services.

What Factors are at Play when Making Garments?

Fabric, complexity of the seaming, order size and time of delivery are the main factors. It could take between $2 and $4 to produce a cotton t-shirt.

Also, the cost may vary depending on the minimum order. For orders of 500 or more units factories will offer prices that are 20-35% lower. 

Hire sewing and garment production services that are spread incurred over a smaller volume, making manufacturing more expensive.

There's a cost of expediting orders. An extra 15-25% cost is added to a 6 week production plan for a 2 week turn around.

How is Per-Piece Pricing Set in Contract Sewing?

The most common pricing structure is Cut, Make, Trim per piece. The brand sells the cloth and trim. The only expenses are manufacturing and labor.

CMT rates vary by region. In India, you can pay $3 to $7 for a CMT dress. Depending on quality and material, the same dress in Eastern Europe costs $12-$20. Time, quality and communication are sacrificed.

Many companies who hire garment production and sewing services prefer their paid services as CMT allows them to separate the costs of materials and control their margins.

Why do Companies Use Sewing and Garment Manufacturing Services in India?

The nation offers exporters incentives from the government, it has well-established supply chains and labor.

In 2022, a medium US athletic apparel company assessed two suppliers. CMT unit costs were $14 in Portugal and $5.80 in Tirupur. The quality of work was similar. It costs $0.90 to ship from India. The brand saved more than $40,000 on an order of 5,000 by Hire sewing and garment production services from India.

What Is the Cost of a Whole Package?

The full package price (also called FOB - Free on Board) covers all costs. The supplier sources, cuts, sews, finishes and packs the fabrics. The brand gets ready-to-wear products.

FOB costs are 40-60% higher than CMT. A $9-$11 FOB rate is possible for a polo shirt at a $4 CMT. The markup compensates for procurement and manufacturing risks.

FOB has a short supply chain, so it's used by startups or small brands. As volumes grow and fabric sources build quality, big brands may switch to CMT.