Professional Merchandising File

1. What is GMTS consumption and
Costing
How many fabric and Accessories or others materials
have to needed for making a garments that is
consumption.
How much money to be expensed for making a
garments that is costing.

2. What is Merchandise and
Merchandising
Merchandise- means goods bought and sold; and
trading of goods.
Merchandising- is an activity of selling and
promoting the goods.

3. What is merchandising?
Merchandising is the methods, practices, and
operations used to promote and sustain certain
categories of commercial activity. In the broadest
sense, merchandising is any practice which
contributes to the sale of products to a retail
consumer. At a retail in-store level, merchandising
refers to the variety of products available for sale
and the display of those products in such a way
that it stimulates interest and entices customers to
make a purchase.

4. What is the major work for
merchandiser
What is merchandising?
A man who is collect order from customer,
sourcing raw materials ,production on time, with
quality and maintain lead time.

5. Objects of Merchandising
Merchandising denotes all the planned activities to
execute and dispatch the merchandise on time, taking into
consideration of the 4 Rs to replenish the customer.
Right Quantity: To dispatch right quantity of product
what buyer ordered.
Right Quality: It should be with right quality as accepted
both parties.
Right Cost: Everybody wants more from what they are
paid.
Right Time: No one wants to wait idle even in a
Restaurant. Keeping delivery schedule is mandato

6. Qualities of Merchandiser
Communication Skill: The communication is very much important to
promote the business activity. The merchandiser should remember that
communication must be lurid and should having face to face conversation with
the buyer.
Planning Capability: Merchandiser should be capable of planning, based on
the planning the order is to be followed. If the planning is not done properly it
will directly affect the delivery time of the order.
Decision making: For a Merchandiser, decision making power is most
important. He should think about the decision to be taken and to act in a right
way.
Loyalty: Loyalty is an essential character of human beings. Especially for the
business people like merchandiser it is a must.
Knowledge about the field: Merchandiser should have adequate knowledge
about the garments, Computer knowledge, and technical knowledge to
communicate with different people in the business is a must.
Co-ordinate & Co-operate: Merchandiser is the person who is actually co-
ordinate with the number of departments. To Co-ordinate with different
people in the industry he should be co- operative.
Monitoring ability: Merchandiser should monitor to expedite the orders.
Other qualities: Education, Experience, Situational Management, Ability to
Evaluate, Dedication, Knowledge of expediting procedures.

7. Function of Merchandisers
Developing new samples, execute sample orders
Costing
Programming
Raw materials / Accessories arrangement
Production scheduling (or) route card drafting
Approval of various Process, Pattern and size set
Pre production follow up
Meet Inspection Agencies
Production controlling
Identifying shortages and make arrangement for the
shortages
Following quality assurance procedures, quality control
procedures

8. Monitoring the in-house, sub-contractors and junior
activities
Buyer communication
Communication with sub-contractors, processing units &
other 3rd parties
Proper reporting
Highlighting to the management
Record maintenance
Developing samples
Placement of orders to suppliers
Taking measures for consistent production
Taking preventive action to maintain the targeted
performance in all areas of activities
Attending meeting with superiors and furnishing the
required details about merchandising

9. Department structure and Functioning Industries label

10. Machine Wise Sewing Thread Consumption PER Inch
From this post you will get information regarding the sewing thread consumption depending
on type of Machine :
Machine Name Classification Require thread/inch
Plain Machine, 1 Needle, 2.5"
Plain Machine 2 Needle 5"
Over lock 3 Thread 13.25"
Over lock 4 Thread 16.75"
Over lock 5 Thread 18.75"
Flat lock 3 Thread 16.75"
Flat lock 5 Thread 22.25"
Bar tack stitching 7" Generally P/Operation
Button hole stitching 7" Generally Per Hole
Button Attaching (2 hole) 3" Per button
Feed of the ARM 7" For one needle
kanchi Stitching 7" For one needle
Back Tape Stitching 7" For one needle
After this you must include another 25% sewing thread before place the work order.

11. Carton cost calculation rule
= [{(Length + width + allowance) X (Width + Height + 4)}
X 2] / 10000 X Per square liner rate
= [{(60 + 40 + 6) X (40 + 30 + 4)} X 2] / 10000 X $0.80
= [{(106) X (74)} X 2] / 10000 X $0.80
= {(7844 X 2)} / 10000 X $0.80
= 15688 / 10000 X $0.80
= 1.5688 X $0.80
= $1.25504 / pc (Per carton rate)

12. Fabric Consumption for knit
Body Length = in CM
Sleeve Length = in CM
Chest/Bottom (most widest part) = in CM
GSM = gm/m2
Rules:
{(B/length + S/length + Sewing Allowance) X (1/2 Chest + Sewing Allowance)}X
2 X GSM X 12 / 10000000 + Wastage
= {(73 + 19.5 + 10) X (52 + 4)} X 2 X 160 X 12 / 10000000 + 10%
= (102.5 X 56) X 2 X 160 X 12 / 10000000 + 10%
= 5740 X 2 X 160 X 12 /10000000 +10%
= 22041600 / 10000000 + 10%
= 2.20416 + 10 %
= 2.424576
= 2.43 kg per dozen. (Consumption)

13. Fabric Consumption for knit
inch measurements
{(B/length + S/length + Sewing Allowance) X (1/2
Chest + Sewing Allowance)}X 2 X GSM X 12 / 1550000
+ Wastage

14. Woven dress consumption
Center front length = 32"+1" (Sewing allowance) = 33"
Width (Chest) = 24" + 1" (Sewing allowance) +
3" Pleat.W (1.5X2) = 28"
= Length X Width / Fabric width X Fabric Unit
= 33" X 28" / 44" X 36"
= 924" / 1584"
= 0.5833333
= 0.59 Yards. (for front part)

15. Some important terms in costing
Yarn cost
Process cost
Process loss
CMT (Cutting, Making & Trimming)
Negotiation (getting the best out of a deal)
Commission percentage (%) for Middle man
Shortage
Buyer specification (It is buyers responsibility to specify the quality
required)
Quantity
Currency
Mode of Shipment (sea, air)
FOB (Free On Board)
CIF (Cost, Insurance and Freight)
OH (Over head)
Quota(Not applicable nowadays)
Profit (level of %)

16. Before start costing
1) Fabrication: You must take clear idea regarding the fabrication before
taking the order from the buyer / buying house. After then, you must ensure
that, you have strong source of the followings fabric.
2) Size spec: Make sure that, you have got the correct/latest size spec with
the measurement of all the sizes, which will be ordered. Many times we see
that, PO sheet has come with new bigger size which was not during the
costing.
3) Fabric color: Try to know that, how many colors the style has & also try
to know that, color wise order qty ratio.
4) Qty: Take information regarding approximate order qty.
5) Shipment date: Asked buyer for the shipment date & check with your
production department that, they have enough space for shipped out the
followings qty within the require ship date Or tell your possible date.
6) Test requirement: Let you know that, the order has any test or not.
7) L/c payments term: Take a previous l/c copy from them & discuss with
your commercial people regarding all the terms along with payment terms
8) Inspection: Pls get a confirmation from the buyer that, who will
inspected the goods. If third party then who will pay their charges.
9) GSP: Pls confirm that, buyer has need the GSP or not.
10) Price mainly depends on shipping line FOB, C&F, CIF.

17. Others item
1) Print: If the garments have print then make sure that, you have a clear art work of
it. Check that there clearly mentioned the print quality, dimension & placement. Send
the art work to your printers for a better price idea. Also let you know from your printers
regarding the difficulties of the followings print. Many times we found that, buyer has
asked for so many type/kind prints in same body which is so difficult for production.
Such as, if buyer asked for Flock + discharge & foil print in at the same artwork then it is
not possible for production.
2) Embroidery: Discuss with your embroidery supplier regarding the embroidery &
take price quotation.
3) Wash: Take the wash price quotation from washing factory.
4) Test: Confirm the charges of test from the testing company.
Accessories & trims
Pls try to Calculate the price of accessories individually it will reduce your percentage
of mistake. Pls find below the list of some accessories item
Sewing thread: Confirm that, which thread you need 100% cotton, spun polyester or
filaments. Then ensure the count 50/2 or 40/2 or any other denier. Its may vary on
fabrications. Regarding the pigment dye garments we normally used cotton grey color
cotton thread. Calculate the sewing thread consumption part by part & add require
wastage percentage.
Labels: Take the quotation from your supplier for the entire woven & satin/paper label.

18. 3) Tape: Calculate the consumption of tape if it has, such as Velvet, herringbone or canvas etc.
4) Elastic: Make sure which denier & width it need. Then take the quotation from supplier.
5) Zipper: If the garments have zippers then confirm that, from where you will purchase that.
Many time the logo zipper need to import the mold from abroad. Make sure the zipper quality, such
metal, nylon or vislon zipper. Check the zipper measurement from your production department and
get prices from your zipper supplier.
6) Button: Take the button price from your supplier if the garments have it.
7) Inter lignin: Calculate the inter lignin price if the garments need.
8) Patch or badge: Calculate the patch or badge or others metal item if the garments have.
9) Finishing item: Tissue paper, silica gel, hang tag, barcode sticker, back board, h/tag string,
scotch tape, security tag calculate the prices of these item.
10) Hanger: Take the quotation of hanger.
11) Poly: Make the measurement of poly. Confirm the quality & with adhesive or not.
12) Carton: Find out the carton measurement & take the prices from carton supplier along with top,
bottom & divider.
13) Gum tape: Confirm the gum tape quality that, whether it is normal transparent or with any logo.
Then take the price quotation.
14) PP belt: Take the price quotation of pp belt if buyer asked it.
15) Carton sticker: Take quotation for sticker.
Commercial cost
Normally we add 3% of total purchase (Fabric cost+ other item cost + Accessories cost) as commercial
cost if the L/c payments terms is as sight.
If the l/c is 60 days deferred then you can add 7.5% additional cost of total price and it will be 15% for
90 day deferred.
CM (Cost of making)
Calculate the CM after discussion with your production department. It’s vary depends on require
machine qty & output qty.
Profit
Normally we add 20% of CM cost with the price as profit.

19. Cost Calculation System
During the fixation of price following notes are to be
followed carefully:
Cost of fabric /Doz
Cost of accessories /Doz.
Garments C. M (Cost of manufacturing)/Doz.
Garments
Cost of transportation from factory to sea port or
airport.
Clearing & forwarding cost
Overhead Cost.
Commission/Profit.

20. Body fabric cost calculation:
1st step
Yarn price / kg = $4.00
Knitting cost /kg = $0.20
Dyeing cost / kg = $1.21
_____________________
Finished fabric cost = $5.41
2nd Step
Collar & cuff cost calculation:
Yarn cost/Doz = 0.78 X $4.00 = $3.12
Knitting cost/Doz = $0.05 X 12 = $0.60
Dyeing cost = 0.78 X $1.21 = $0.94
___________________________________
Collar & Cuff cost / Doz = $4.66

21. 3rd Step
Total production cost:
Body fabric cost ( 4.41 kg X $5.41) = $23.86 / Doz
Collar & Cuff cost = $4.66 / Doz
CM = $6.00 / Doz
Accessories Cost = $3.00 / Doz
__________________________________________
Total production cost: = $37.52 / doz
Final Step
Fob pricing of per piece polo shirt:
Total production cost : = $37.52 / doz
Commercial cost will be (3%) = $0.95 / doz (Except CM)
Profit will (20% of CM) = $1.20 / doz
_________________________________________
Total FOB price (doz) = $39.67 / doz
Fob price per piece will be = $3.3058 / pc
Final quoted price for buyer = $3.35 / pc (FOB)

22. Fabric Consumption / Dzn :
Measurment GSM
Consump/
pc
P/Doze
n
10%Wastag
e
Layer/dzn
Rib/p
cs
Rib/Dz
TTL
Fab-
Kg
Chest (CM) 41
180 0.1782 2.1384 2.3522 0.0000
0.020
0
0.240 2.592
Length (CM) 51
Sleev Length (CM) 49
Additional Fabric
Total 2.592

23. Fabric Price Calculation/kg :
Total-Kg
Dying Charge -
Average
Yarn: 2.950 Yarn count :34/s Colour Rate %
Lycra Yarn 0.000 2.950
Peach/C
oral
2.300
100
%
L/C &
Administration Cost
(1.5%)
0.044 2.994
Knitting Charge 0.350 3.344 Total 2.300
Knitting Loss (1%) 0.033 3.378 Average 2.300
Deying Charge 2.300 5.678
Deying Process Lost
( 20% )
1.136 6.813
Fabric
Price:
6.813

24. Garments Calculation:
Price/Dzn
1 Fabric Value $ 17.66
2 Accessories $ 4.50
3 Print $ 1.50
4.EMB $ -
5. Wash
6. All over print
7 Brush
8. CM $ 4.00
9. Others $ 0.50
Total Cost $ 28.16
L/C + Com Charge 3% $ 0.84
$ 29.01
Total Cost/pc $ 2.42
Price/pc (FOB) With profit 5% $ 2.54

25. C M calculation
= {(Monthly total expenditure of the following factory / 26) / (Qty of running
Machine of your factory of the following month) X (Number of machine to
complete the layout)} / [{(Production capacity per hr from the existing layout,
excluding alter & reject) X 8}] X 12 / (Dollar conversion rate)
= [{(50,00,000 / 26) / ( 100 ) X (25)} / {(200) X 8}] X 12 / 74
= [{192307.7 / (100) X (25) } / 1600] X 12 / 74
= (48,076.9 / 1600) X 12 / 74
= 30.048 X 12 / 74
= 360.58 / 74
= $4.873 / dozen (this is the making cost (12 pcs) of the following items)

26. Fabric Cost 11.50
Accessories 4.50
Cost of Production 9.10
Transport Cost from factory to sea port or airport (0.5% Of Cost
of Production)
0.05
Clearing & forwarding Cost (2% Of Cost of Production) 0.18
Overhead Cost (0.5% Of Cost of Production) 0.05
Total Cost 26.38
Commission (10% of Total Cost) 0.94
Net FOB Price 27.50

27. Name and address of Factory
COSTING SHEET
DATE 26-02-2012
BUYER HEMA
B.AGENT B.K. SOURCING
ARTWORK NO. 33.06.04
STYLE NO. 222-B005-10~40
ITEM NB / BABY AB SWEAT DRESS
FABRICATION 100% COTTON MINI TERRY INSIDE BRUSH Y/D STRIPE 210 GSM
ORDER QTY/PCS 25860
UNIT PRICE/PCS $2.17
TOTAL PRICE $56,116.20
L/C NO.
L/C VALUE 56116.20
FACTORY VALUE $53,310.39
ITEM QUANTITY UNIT PRICE/KGS/DOZ TOTAL PRICE
YARN(26/1)COTTON 3010 $ 3.60 $ 10,836.00
YARN(26/1)(G.MARL) 2295 $ 4.10 $ 9,409.50
LYCRA 15 $ 10.00 $ 150.00
KNITTING ENG. STRIPE 3980 $ 2.00 $ 7,960.00
KNITTING(2X2 LYCRA RIB) 755 $ 0.25 $ 188.75
KNITTING TERRY 585 $ 0.25 $ 146.25
DYEING(Y/D) 1990 $ 2.20 $ 4,378.00
DYEING(WASH) 4285 $ 0.60 $ 2,571.00
DYEING 1035 $ 1.50 $ 1,552.50
BRUSHING 3980 $ 0.15 $ 597.00
FINISING
ACCESSORIES 25860 $ 1.00 $ 2,155.00
ZIPPER $ -
TEST 25860 $ 0.01 $ 258.60
HANGER 25860 $ 0.80 $ 1,724.00
COMISSION $ 2,805.81
COMMERCIAL 25860 $ 0.01 $ 258.60
OTHERS 25860 $ 0.01 $ 258.60
CM/DOZ 25860 $ 6.00 $ 12,930.00
G. TOTAL $ 58,179.61

28. Particulars Amount in US $
Fabric (30 Yds X$0.95) Cost /Doz. 28.50
Accessories Cost./ Dzn 06.00
CM (Cost of Manufacturing)/Dzn. 10.00
Sub Total 44.50
Transport Cost from factory to sea port or airport (0.5% Of Cost of
Production)
0.23
Clearing & forwarding Cost (2% Of Cost of Production) 0.90
Overhead Cost (0.5% Of Cost of Production) 0.23
Total Cost 45.86
Commission (10% Of Total Cost ) 4.60
Net FOB Price 50.46
Freight (4% of Net FOB Price) 2.02
Net C & F Price 52.48
Insurance Cost (1.5% of Net C&F Price) 0.79
Net C I F Price 53.27
Price Quotation of a Garment in FOB/ C&F/ CIF Value

29. 20′ Container
Measurement:
Length: 288″ x Width: 84″ x Height: 94″ = 1800288 cubic inches
1800288 divided by 1728 cubic inches= 1041.83 cubic feet. 1041.83
divided by 35.32 =29.50 CBM
A 20′ container has an air capacity of 29.50 CBM, but when exporters
ship goods packed in cartons or wooden crates, it can only hold about
27 CBM as there will be gaps or spaces wasted . If the rate of a 20′
container is $ 3, 500.00 exporters average rate per CBM is about $ 130.00
40′ container
Measurement:
Length: 447” x Width: 84” x Height: 94” =3742704 cubic inches.
3742704 divided by 1728 cubic inches= 2165.92 cubic feet. 2165. 92
divided by 35.32 = 61.32 CBM.
Therefore, a 40′ container has an air capacity of 61.32 CBM. Likewise,
when the exporter ship goods by packed cartons or wooden crates, it
will hold only about 54 CBM. If the rate of the 40′ container is $5000.00
the average rate per CBM is about $ 92.00.

30. 40′ Hi container
Measurement
Length: 447″ x Width: 84″ x Height: 106″ = 474 x 84 x 106″=
4220496 cubic inches.
4220496 divided 1728 cubic inches =2442.41 cubic feet.
2442.41 divided by 35.32 = 69.15 CBM
A 40′ Hi Cube container is about 12% higher than a 40′
regular container, and the cost of a 40′ Hi Cube is about 10
to 12% higher, so the rate per CBM is about the same. There
is very little, or on advantage in using a 40′ Hi Cube as the
rate per CBM is concerned. However, there is great
advantage when the exporters have the amount of cargo
which exceeds the capacity of a 40′ container only by 5 to 8
CBM.

31. Example: one dz of Men’s stand up collar shirt is about 0.034 CBM.
(1) If exporter ships this shirt as loose cargo,
0.034 x 160.00 =$5.44/ dz sea freight
(2) If exporter ships this shirt in a 20′ container (full) 0.034 x 130.00 =$4.42/ dz sea
freight.
(3) If exporter ships this shirt in a 40′ container, or a 40′ f ii Cubic container (full)
0.034 x 92.00=3.13 per dz sea freight
As most shippers are shipping goods by the container, we may form an opinion that as
long as we pay for the whole container we may fill up the container regardless of the
weight of the merchandise. However, this is hot true; the usual weight limits of the
containers are as follows:
20′ container…………..weigh limit: 16300 kg
40′ container…………. weigh limit: 19500 kg
Actually the weights mentioned above are weight limits as guidelines. The real limits are
as follow:
20′ container:………….18148 kg including the weight of the container.
40′ or45′ container:….25400 kg including the weight of the container.
The following are the weights (tare weights) of the containers: 20′ Steel :……………… 1960
to 2350 kg
40′ Steel :………………. 3390 to 4190 kg
40′ Aluminum : ………….2450 to 3050 kg
45′ Aluminum / Steel : …..3925 to 4500 kg

32. AIR FREIGHT
Unlike sea freight, the airlines have decided to charge for the
heavy merchandise (high density goods) by weight and light
weight merchandise (low density goods) by volume. However, as
airplanes can take less weight, than ocean liners, the way they set
the standard, in the garment industry, when you ship goods by
air, you have a 70% chance to be charged by weight, about 30%
chance by volume.
If the merchandise is of high density (heavy) such as jeans, flat
packed shirt, jackets without polyester padding, T-shit without
hanger, there is a good chance it will be charged by weight. In
that case, it is not possible to save air freight by packing the
goods tighter in cartons to reduce the measurements.
However, if the merchandise is of low density (light weight) such
as stands up collar shirts, shirts individually boxed , jackets with
polyester padding, or down fill, T-shirts or other shirts with
hangers heavy gauge sweaters , there is a good chance it will be
charged by volume. In that case, exporter should make an effort
to make the cartons as small as possible.