Costing a Fashion Collection: From Materials to Margin

By Delight Technical College | School of Tailoring, Fashion & Design | 2026

Behind every successful fashion collection lies a detailed costing exercise (the systematic calculation of exactly what each garment costs to produce) and what price will generate sustainable profit. Many talented designers underprice their work because they have never rigorously costed a collection, relying instead on rough estimates or, worse, simply matching competitor prices without understanding their own actual costs. Delight Technical College’s entrepreneurship curriculum builds this rigorous costing discipline.

📋 The Components of Garment Costing

Direct Material Costs:

• Fabric- calculated per garment based on the actual yardage/metreage required, including an allowance for cutting waste
• Trims and notions- buttons, zips, thread, interfacing, labels, and any other materials incorporated into the garment
• Packaging- if included in the unit cost, the bags, boxes, or wrapping used for delivery

Direct Labour Costs:

• Cutting time- calculated at an appropriate hourly rate
• Sewing/construction time- the largest labour component for most garments
• Finishing time- pressing, quality checking, and final preparation
• Any specialist decoration time- embroidery, beadwork, or other embellishment

Overhead Allocation:

Fixed costs that are not specific to any single garment (rent, equipment depreciation, utilities, insurance) must be allocated proportionally across production volume to arrive at a true per-garment cost.

🧮 Building a Simple Costing Model

Cost Component	Example Calculation
Fabric (2m at KES 600/m)	KES 1,200
Trims and notions	KES 250
Labour (4 hours at KES 300/hr)	KES 1,200
Overhead allocation	KES 350
Total Production Cost	KES 3,000

💰 From Cost to Price

Applying a Margin:

Once total production cost is established, a margin must be added to generate genuine profit, not just cost recovery. Margin percentages vary by market segment, but understanding your specific margin (rather than guessing at a ‘reasonable’ price) is essential for sustainable business.

Wholesale vs Retail Pricing:

If selling through wholesale channels (boutiques, retailers), pricing must account for the retailer’s own margin requirement typically meaning your wholesale price needs to be roughly half of what the eventual retail price will be, since the retailer also needs to apply their own markup.

Market Validation:

Calculated pricing must be checked against market reality (research what comparable garments sell for, and assess whether your calculated price is achievable in your target market) or whether cost reduction strategies are needed to remain competitive.

⚠️ Common Costing Mistakes

• Forgetting to value your own labour time at a genuine professional rate, effectively working for free or below minimum viable wage
• Underestimating fabric waste in the cutting process
• Failing to account for overhead costs, leading to prices that cover direct costs but never generate genuine business profit
• Not revisiting costing as material prices change- fabric and trim costs fluctuate, and pricing must be updated accordingly

🎓 Costing Skills at Delight

Entrepreneurial Skills (Level 5) introduces costing fundamentals, while Industrial Organisation Management (Level 6) extends this into production-scale costing relevant to larger collections and wholesale business models.

“A beautifully designed collection that is priced without rigorous costing is a hobby pretending to be a business. At Delight, we make sure every fashion entrepreneur knows their real numbers before they set a single price.”

📍 Delight Technical College | Muindi Mbingu Street, Opposite Jevanjee Gardens, Nairobi | +254 722 533 771 | www.delight.ac.ke