How to Make an Accurate Cost for a Knit T-Shirt: A Comprehensive Guide for Merchandisers

 

How to Make an Accurate Cost for a Knit T-Shirt: A Comprehensive Guide for Merchandisers

In the fast-paced world of textiles and apparel, one of the most critical skills for a merchandiser is accurate costing. Without precise costing, even a well-made knit T-shirt can lead to financial losses or missed opportunities with buyers. Making a cost isn’t just about adding numbers—it’s about understanding every detail that goes into the product, from fabric selection to finishing touches, and from labor to overhead.

Here’s a detailed guide on what you must maintain and consider to create a realistic cost for a knit T-shirt.

 

Start with the Fabric

Fabric is the heart of a T-shirt and usually accounts for more than half of the total cost. To calculate it accurately, you need to consider several factors. First, determine the type of fabric required by the buyer. It could be 100% cotton, polyester, CVC, bamboo, or organic cotton. Each fabric type has its own price, weight, feel, and shrinkage characteristics.

Next, consider the GSM, or grams per square meter, which indicates the fabric’s thickness and density. Lightweight fabrics like 140–160 GSM are commonly used for casual summer T-shirts, while heavier fabrics, such as 180–220 GSM, are used for premium or winter wear.

Fabric width also matters. Knit fabrics are usually 58–60 inches wide, and the width determines how much fabric you’ll consume for a particular T-shirt size. On top of this, you must account for real-life wastage at every stage. Knitting wastage can occur due to machine stoppages, uneven loops, and trimming of selvedges. Dyeing or finishing can add further losses due to shrinkage, miscoloring, or fabric defects. Finally, cutting wastage occurs when panels are cut from fabric, especially if there are defects or pattern matching requirements.

All these factors combined mean that fabric consumption for a T-shirt is always higher than the theoretical measurement, usually by 7–10%, depending on the complexity of the style and finishing process. Once you know the consumption, multiply it by the price per kilogram of the fabric, factoring in this wastage, to get the realistic fabric cost per piece. This step alone ensures that your costing doesn’t fall short of the actual production expense.

 

Don’t Forget the Trims and Accessories

Trims may seem small, but they play a huge role in costing. A knit T-shirt typically requires neck rib, sewing thread, and labels—including main labels, care labels, and size tags. Many buyers also demand hangtags or polybag packaging for each piece. Even though these items may seem minor, their costs add up when producing large quantities. Maintain a detailed list of unit costs for each trim, and update it whenever prices fluctuate. This ensures your T-shirt cost remains accurate and realistic.

 

Printing, Embroidery, and Special Finishes

If your T-shirt includes any kind of print or embroidery, this will add to the total cost. Printing can be done through screen printing, heat transfer, or digital printing, each with its own cost structure. Embroidery costs depend on the stitch count and size of the design. Special finishes like enzyme wash, softeners, or garment washing also add to the expense. Always calculate these costs separately and clearly so that you can provide a transparent quotation to the buyer.

 

Labor and Cut & Make Costs

Cutting and making, also known as CM cost, is the labor required to transform fabric into a finished T-shirt. This includes cutting, stitching, finishing, and quality checking. CM cost varies depending on style complexity; a basic crew neck T-shirt has a lower CM cost, while a pocket T-shirt, V-neck, or polo requires more time and skill, increasing the labor cost. CM costs also depend heavily on the factory location and the efficiency of the production line. Always maintain an updated CM cost sheet in collaboration with the factory so your calculations are accurate.

 

Include Overhead Costs

Overhead costs are often overlooked but are essential for realistic costing. These include electricity, water, fuel, administrative salaries, management, and quality control inspection costs. Packaging and logistics inside the factory also contribute to overhead. Assigning a small overhead amount per T-shirt ensures that your cost covers all indirect expenses.

 

Wastage and Allowances

As mentioned, wastage is unavoidable in textiles. Knitting, dyeing, and cutting losses, along with shrinkage allowance, must be included in the calculation. Ignoring these allowances will result in underestimating the cost, which can severely impact your profit margin. Always add these percentages to your fabric consumption and cost.

 

Determine Your Profit Margin

After calculating all production-related costs, it’s important to add a reasonable profit margin. A standard margin is usually 10–15% of the total cost. This margin ensures that your business remains profitable while keeping the price competitive for buyers. The profit margin should be clearly calculated and maintained as a separate part of your costing.

 

Size-Wise Costing

Different sizes of T-shirts consume different amounts of fabric and labor. For example, a size XXL consumes more fabric and requires slightly longer sewing time than a size S. To avoid losses on larger sizes, calculate the size-wise cost for each size. Maintaining a detailed size-wise calculation also helps you negotiate better with buyers and gives you more control over your profit.

 

Keep Detailed Documentation

Finally, maintain a well-organized costing sheet that includes all the components: fabric, trims, printing or embroidery, CM costs, overhead, wastage, profit margin, and size-wise costs. Updating this sheet regularly ensures your costing stays accurate as material prices or labor rates change. Good documentation also builds trust with buyers because it shows professionalism and transparency.

 

Key Takeaways

Creating a cost for a knit T-shirt is more than a simple calculation. To do it accurately, you must:

• Understand fabric types, GSM, width, and realistic wastage
• Include all trims and accessories
• Account for printing, embroidery, and special finishes
• Calculate labor (CM) accurately according to style complexity
• Add overhead costs
• Include wastage allowances and shrinkage
• Determine a reasonable profit margin
• Calculate size-wise costs for S to XXL
• Maintain detailed and up-to-date documentation

When all these elements are maintained properly, your T-shirt costing becomes realistic, professional, and competitive, ensuring that your business remains profitable and your buyers are satisfied.