Garment Costing in Tech Packs: How AI Estimates Production Costs
How garment costing works in tech packs — material costs, labor estimates, overhead, and how AI generates cost estimates for fashion production.
What garment costing includes
Garment costing calculates the total cost to produce one unit of a garment. It includes material costs (fabric, trims, hardware, labels), labor costs (cutting, sewing, finishing, QC), overhead (factory operating costs), and logistics (packaging, shipping).
Costing is essential for pricing decisions. Without accurate cost estimates, brands either price too high (losing sales) or too low (losing margin). Tech pack costing provides preliminary estimates before manufacturer quoting.
Material cost breakdown
Material costs typically represent 50-70% of the total garment cost.
Example material cost breakdown: cotton hoodie
| Material | Quantity | Unit Cost | Total |
|---|---|---|---|
| Shell fabric (280gsm cotton fleece) | 1.8 meters | $6.50/m | $11.70 |
| Rib fabric (cuffs, hem, hood) | 0.3 meters | $7.00/m | $2.10 |
| Thread (3 types) | Est. | $0.30 | $0.30 |
| Drawcord | 1.2 meters | $0.40/m | $0.48 |
| Eyelets (2) | 2 pcs | $0.08/pc | $0.16 |
| Care label + brand label | 2 pcs | $0.15/pc | $0.30 |
| Hangtag + polybag | 1 set | $0.25 | $0.25 |
| Total materials | $15.29 |
Labor and overhead costs
Labor costs depend on garment complexity and manufacturing location. A basic t-shirt might take 15-20 minutes of sewing time, while a lined jacket might take 45-90 minutes. CMT (cut-make-trim) rates vary by country from $1-2/garment in Southeast Asia to $8-15/garment in Eastern Europe.
Overhead includes factory rent, equipment depreciation, management, quality control, and utilities. Manufacturers typically include overhead in their CMT rate or add it as a percentage markup.
How AI generates cost estimates
AI tech pack generators estimate costs based on garment type, material specifications, and construction complexity. The AI calculates material consumption from garment measurements, applies standard material cost ranges, and estimates labor based on construction complexity.
These estimates are directional — they help brands understand approximate landed cost and plan pricing. Actual production costs come from manufacturer quotes, which may be higher or lower depending on order volume, factory utilization, and material sourcing.
Using costing for pricing decisions
The standard pricing formula is: retail price = production cost × markup multiplier. Typical multipliers are 2.5-3x for direct-to-consumer brands and 4-5x for wholesale brands (to allow retailer margin).
AI-generated cost estimates help brands validate pricing strategy early — before investing in sampling. If the estimated production cost makes the target retail price impossible, the design can be modified (simpler construction, lighter fabric, fewer trims) before spending money on samples.