Costing and Pricing Apparel

Why Costing and Pricing Matter in Apparel

Pricing mistakes are one of the fastest ways to erode margins in fashion.

Without accurate costing and structured pricing, brands often face:

• Underpriced products with poor margins

• Overpriced products with low sell-through

• Hidden costs that appear after launch

• Margin pressure during promotions

• Difficulty scaling profitably

Strong pricing starts with clear cost visibility and ends with confident price decisions.

How to Cost and Price Apparel Step by Step

Step 1: Calculate Cost of Goods Sold (COGS)

COGS is the foundation of apparel pricing.

Typical COGS components include:

• Fabric cost

• Trims and accessories

• Cutting, stitching, and finishing

• Washing or dyeing

• Sampling amortization

• Packaging

• Factory overheads

Accurate COGS ensures you understand the true cost of making each unit.

Step 2: Add Duties, Taxes, and Logistics

Product cost does not stop at the factory gate.

Include additional costs such as:

• Import or export duties

• Customs clearance

• Freight and shipping

• Insurance

• Warehousing

• Last-mile delivery

• Marketplace or platform fees

These together form your landed cost, which reflects what the product truly costs before selling.

Step 3: Understand Your Landed Cost Clearly

Landed cost combines COGS and all post-production expenses.

A clear landed cost helps you:

• Set minimum viable prices

• Avoid margin erosion

• Compare suppliers accurately

• Decide where to optimize costs

If landed cost is unclear, pricing decisions become guesswork.

Step 4: Define Target Margins and MSRP

Once landed cost is known, define your pricing structure.

Key pricing inputs include:

• Target gross margin

• Category benchmarks

• Brand positioning

• Customer willingness to pay

• Channel-specific markups

From this, calculate your MSRP, ensuring it supports both profitability and competitiveness.

Step 5: Account for Promotions and Discounts

Promotions are part of fashion retail, not exceptions.

Plan for:

• Seasonal sales

• Marketplace discounting

• Coupons and offers

• Bundles and multi-buy deals

• Clearance markdowns

Your pricing must still protect margins even after planned discounts.

Step 6: Validate Pricing Against Market Signals

Before finalizing prices, validate them against real market data.

Check:

• Competitor pricing

• Similar product positioning

• Historical sell-through at price points

• Price sensitivity by category

• Demand response at different price tiers

This reduces the risk of overpricing or underpricing at launch.

What Strong Apparel Pricing Enables

Effective costing and pricing help brands:

• Maintain healthy margins

• Scale profitably across channels

• Absorb promotions without panic

• Make confident assortment decisions

• Reduce reliance on heavy discounting

• Improve long-term brand value

Pricing is not just a number. It is a strategy.

The Smart Way to Cost and Price Apparel

Streamoid brings together cost data, market insights, and catalog-level intelligence to support smarter pricing decisions.

With Streamoid, you can:

• Track COGS and landed costs at SKU level

• Benchmark pricing across marketplaces

• Analyze demand and price sensitivity

• Simulate margin impact of discounts

• Align pricing across channels

• Maintain consistent pricing logic in Catalogix feeds

Streamoid connects cost, demand, and pricing into one decision system.

Who This Is For

• Fashion and apparel brands

• D2C founders

• Merchandising and buying teams

• Finance and planning teams

• Category managers

• Marketplace sellers

Next Steps

Set prices that work today and scale tomorrow.

• Explore pricing and demand insights

• Connect pricing to catalog workflows

• Learn how brands protect margins