Domestic market for the ready made garments is growing in a fast pace. No need to mention that many export garment manufacturers have started making garments for domestic market only and left producing export orders. Lot of such companies started their own brands for the domestic customers.
One most common product in our clothing is shirts. Five years ago most of us used to wear only tailor made shirt but now most prefer to buy ready made shirts. So demand of the ready made shirt is increasing day by day. And the good thing for you is that it creates an opportunity for those who want to start small business in garment manufacturing.
Also See: Shirt Manufacturing Process
In this post I have shared a case study of a shirt manufacturing factory. For the initial guide you may get lot of information about how to start a shirt manufacturing factory but a this study will help you a lot in understanding how the existing factories are doing this business.
The following article is a case of a Delhi based small shirt manufacturer. The factory produces shirt for domestic market. Most of the time company works on the orders but when they don’t have much order they make basic shirts, store garments and later sales those garments. They generally get orders from retail shops from Delhi and NCR (national capital region). They have make- through production system that means an individual operator sews the complete garment. Only for collar making, button holing and button stitching there is separate operators.
So total manufacturing cost of the order will be INR 97500.00 (500.00*195.00)
- Local tax,
- VAT,
- Service tax and
- Profit margin
- Transportation and road tax
Factory had no technical person such as engineers, merchandisers. Owner himself runs the factory with a small team. Tailors are paid weekly according to quantity they produce (piece rate system production). The important parameters that have been explained in the following article will be helpful to those who are looking for setting up a small garment unit for domestic market.
Fabric requirement for making a shirt:
As said factory did not have engineers or merchants, they do not go for complicated fabric consumption formula. They calculate fabric requirement per garment on the basis of their experience. Factory purchases fabric from local market according the customer specification. They never procure fabric from mills or power looms. They have pre-set fabric consumption quantity for different width of fabrics and shirts types as shown in following table.
You may find incorrect values in consumption and costing but this article is written with actual data.
Shirt type
|
Fabric consumption when fabric width is 60 inch
|
Fabric consumption when fabric width is 44 inch
|
Formal Full Sleeve
|
1.6 meters
|
2.10 meters
|
Formal Half Sleeve
|
1.4 meters
|
1.90 meters
|
Short shirt Full sleeve
|
1.45 meters
|
1.90 meters
|
Short Shirt Half Sleeve
|
1.3 meters
|
1.75 meters
|
Costing of the Garments (Shirts):
Factory does costing of the shirt order in a simple costing sheet. One costing sheet has been shown for Half Sleeve Shirt without pocket. Order quantity approx 500 pieces.
Particulars
|
Amount
(INR) | |
A
|
Raw Material
| |
1
|
Fabric requirement per piece 1.3 meter.
Fabric cost @ 100 INR per meter of width 60”
|
130.00
|
2
|
Sewing Thread
|
3.00
|
3
|
Fusing material and paper foam
|
5.00
|
4
|
Buttons
|
2.00
|
5
|
Packing material (paper box for each pieces)
|
7.00
|
6
|
Labels (Brand label +size label)
|
1.50
|
7
|
Hang tags
|
3.00
|
B
|
Garment CMT per pieces
| |
1
|
Cutting
|
2.00
|
2
|
Sewing
|
18.00
|
3
|
Finishing with chemicals
|
5.00
|
C
|
Overheads (included Rent, staff salary, electricity
and phone bills, transport expenses and consumables) |
18.50
|
Total Cost of the garment (A+B+C)
|
195.00
|
So total manufacturing cost of the order will be INR 97500.00 (500.00*195.00)
Pricing of Shirts:
Pricing means at what rate factory sells garments (shirts) to their buyer (retailer and whole sellers). To calculate price of the shirt following things are added to manufacturing cost- Local tax,
- VAT,
- Service tax and
- Profit margin
- Transportation and road tax
Size break up:
The size ratio is depends on the order. In general factory use following size ratio for shirts.
Sizes
|
S
|
M
|
L
|
XL
|
XXL
|
Ratio
|
1
|
1
|
2
|
2
|
1
|
Pieces to make
|
70
|
70
|
145
|
145
|
70
|