Pricing clothing for profit means more than adding a percentage on top of production cost. The selling price must still leave enough profit after discounts, commissions, payment fees, and freight-out.
A good pricing process starts with production cost, then tests whether the final net revenue produces enough profit per garment.
Inputs needed to price clothing
- Production cost per garment
- Pricing method: markup or margin
- Target markup or target margin
- Planned discount
- Sales commission
- Payment and platform fees
- Freight-out per garment
- Order quantity
Step 1: start from production cost
Production cost is the base of the pricing calculation. It should include fabric, labor, trims, packaging, and factory overhead.
For a detailed production cost model, see the garment production cost method.
Step 2: choose markup or margin
The Pricing / Profit Engine supports two pricing methods.
Markup is based on cost. Margin is based on selling price. They are related, but they do not produce the same price for the same percentage.
Step 3: calculate net revenue
Net revenue is the revenue left after commercial deductions.
This is important because profit should be measured against the amount actually kept, not only against the nominal selling price.
Step 4: calculate profit per garment
Freight-out is deducted after net revenue because it reduces the profit kept per garment.
Example: pricing clothing for profit
Suppose a clothing brand is pricing a garment with the following inputs:
- Production cost: $12.00 per garment
- Pricing method: markup
- Target markup: 80%
- Planned discount: 10%
- Sales commission: 6%
- Payment fees: 3%
- Freight-out: $1.25 per garment
- Order quantity: 800 units
In this example, the garment sells for $21.60, but the real profit is about $4.47 per garment after deductions and freight-out.
Why realized margin matters
A price can look profitable before deductions but become weak after discounts, commission, payment fees, and freight-out.
That is why the calculator separates target price margin from realized net margin. Target price margin is based on the nominal price. Realized net margin is based on the profit actually left after deductions.
For the detailed pricing logic, see the pricing strategy method.
What the calculator returns
- Selling price per garment
- Production cost per garment
- Net revenue per garment
- Profit per garment
- Total profit
- Target price margin
- Realized net margin
- Profit as percentage of cost
Common pricing mistakes
- Pricing from cost without checking net revenue
- Confusing markup with margin
- Ignoring planned discounts
- Forgetting sales commission or platform fees
- Leaving freight-out outside the profit calculation
- Looking only at total revenue instead of profit per garment
Calculate clothing price and profit
Use the Pricing / Profit Engine to calculate selling price, net revenue, realized margin, and profit with your own inputs.