Business
How a Garment Is Priced: From Factory Floor to Shop Window
Why does one white shirt cost a fraction of another? A plain-language walk through the costs hidden inside a price tag.
Two white shirts hang side by side. One costs about as much as a sandwich; the other, as much as a weekend away. They may look almost identical on the hanger. So where does the difference come from?
The answer is a chain of costs and markups, each added at a different stage of the garment’s journey.
1. Materials
Fabric is usually the largest single cost in making a garment. Fibre quality, weave, weight and finishing all matter. A long-staple cotton poplin can cost many times more per metre than a basic blend — and a shirt needs well over a metre once you account for pattern pieces and waste.
Then come the trims: buttons, thread, interfacing, labels, packaging. Mother-of-pearl buttons versus plastic ones is a small line item that customers notice immediately.
2. Making
The cost of labour depends on where the garment is made and how complex it is. A shirt with a two-piece collar, a split yoke and hand-finished buttonholes takes far longer to sew than a simple one. Small production runs are also more expensive per piece than huge ones.
3. Getting it there
Shipping, import duties, warehousing and insurance all add up. These are often lumped together as landed cost — what it takes to get a finished garment into the brand’s warehouse.
4. The markup
This is the part that surprises people. Retail prices are commonly several times the landed cost. That multiple has to pay for:
| Cost | What it covers |
|---|---|
| Design & development | Designers, samples, fittings, patterns |
| Marketing | Campaigns, shoots, advertising, events |
| Retail | Rent, staff, store fit-out, e-commerce |
| Wholesale margin | If sold through department stores, their share |
| Markdowns | Stock that doesn’t sell at full price |
| Profit | What’s left |
When a garment is sold through another retailer, both the brand and the store need their margin, which is why wholesale-driven brands often have higher shelf prices.
So is an expensive shirt a rip-off?
Not necessarily — but price isn’t a guarantee of quality either. Some of the premium pays for better fabric and construction; some pays for the name and the shop on a famous street.
The useful skill is learning to read the garment itself: the fabric’s hand, the density of the stitching, whether patterns match at the seams. Those details tell you where the money went.