Problem
Brand buyers often ask: “Why does this pair of jeans cost 80 RMB to make but sell for 500 RMB?” or “Why is Factory A’s quote 120 RMB while Factory B’s is 180 RMB?” Without understanding the cost structure, you cannot evaluate quotes, negotiate effectively, or set profitable retail prices.
Core Conclusion
A standard 5-pocket denim jean has 6 major cost components: Fabric (35-40%), Trims (8-10%), Sewing Labor (20-25%), Washing (10-15%), Packaging (3-5%), and Overhead (8-10%). Factory profit is typically 20-30% on top of total cost.
1. Complete Cost Breakdown (300-piece Order)
| Component | Percentage | Cost (RMB) | Description |
|---|---|---|---|
| Fabric | 35-40% | 35-45 | 12oz denim, 5% waste |
| Trims | 8-10% | 8-12 | Zipper, buttons, thread |
| Sewing Labor | 20-25% | 20-30 | 5-pocket construction |
| Washing | 10-15% | 12-18 | Regular/enzyme/stone wash |
| Packaging | 3-5% | 3-6 | Hangtag, polybag, carton |
| Overhead/QC | 8-10% | 8-12 | Merchandising, QC, admin |
| Total Cost | 100% | 86-123 | Ex-factory cost |
| Factory Profit | 20-30% | 20-35 | Reasonable margin |
| Final Quote | – | 106-158 | Tax included |
2. Fabric Cost (Largest: 35-40%)
Formula: Fabric Cost = (Fabric Price per Meter ? Usage per Piece) + Waste
Example (12oz): 32 RMB/m ? 1.2m ? 1.05 = 40.32 RMB per piece
Weight Impact on Cost
| Weight | Price (RMB/m) | Cost per Piece (RMB) |
|---|---|---|
| 10oz | 22 | 27.7 |
| 12oz | 28 | 35.3 |
| 13oz | 35 | 44.1 |
| 14oz | 45 | 56.7 |
Key Insight: Each 1oz increase adds approximately 8-10 RMB per piece.
3. Trims Cost (8-10%)
- Zipper: YKK #5 = 4.5 RMB | Domestic = 1.5 RMB
- Button: Custom metal = 2.5 RMB | Standard = 0.5 RMB
- Thread: 0.8 RMB
- Hangtag + Polybag: Custom = 3.0 RMB | Generic = 0.5 RMB
- Total: 5-15 RMB per piece
4. Sewing Labor Cost (20-25%)
5-Pocket Jean: Approximately 20 minutes per piece at 60 RMB/hour = 20 RMB per piece
Order Quantity Impact
- 30-50 pieces: 30-35 RMB/piece (low efficiency)
- 100-300 pieces: 20-25 RMB/piece (standard)
- 500+ pieces: 15-18 RMB/piece (optimized)
5. Washing Cost (10-15%)
- Regular Wash: 8-10 RMB (3-5 days)
- Enzyme Wash: 12-15 RMB (5-7 days)
- Stone Wash: 15-18 RMB (5-7 days)
- Hand Sand + Whiskers: 25-35 RMB (7-10 days)
6. Cost by Order Quantity
| Component | 50 Pieces | 300 Pieces | 1000 Pieces |
|---|---|---|---|
| Fabric | 45 | 40 | 38 |
| Trims | 15 | 10 | 8 |
| Sewing | 35 | 25 | 18 |
| Washing | 18 | 15 | 12 |
| Total Cost | 136 | 105 | 88 |
| Final Quote | 170 | 131 | 110 |
Key Insight: Small batch (50 pcs) costs 55% more per piece than large batch (1000 pcs).
7. Common Pricing Mistakes
Mistake 1: Only comparing final quotes without cost breakdown
Mistake 2: Ignoring hidden costs (patterns, samples, inspection)
Mistake 3: Unrealistic target prices (quality denim at 120 RMB requires 500+ pcs)
8. Recommendations
For Cost Estimation:
- Request detailed cost breakdown from factory
- Compare each component separately
- Factor in hidden costs (samples, patterns, inspection)
- Use 25-30% factory profit as benchmark
For Cost Reduction:
- Increase order quantity (300+ pieces)
- Simplify design (fewer pockets, no hand sand)
- Use domestic trims instead of imported
- Standard packaging instead of custom
- Do NOT sacrifice fabric quality (causes returns)
- Do NOT skip QC (causes quality issues)
Ask the Expert
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We provide professional answers based on 20 years of OEM experience.
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