Why does one T-shirt sell for $8 and another, that looks almost the same on a hanger, sell for $80? The answer is rarely just a logo. Behind every garment is a cost sheet — a line-by-line accounting of what it took to make that piece and get it onto a store shelf. Once you understand how apparel costing works, clothing prices stop looking random, whether you are a shopper judging value or a new brand trying to price its first collection.
1. It starts with the cost sheet
A cost sheet is the garment's receipt before the garment exists. Before a single yard is cut, someone lists every ingredient: fabric, thread, buttons, zippers, labels, hangtags, packaging, sewing labor, washing or dyeing, freight, and duty. Each line gets a quantity and a price. Miss a line — and beginners most often forget labels, polybags, or the second round of shipping — and the profit you planned quietly disappears before the clothes even arrive.
2. Fabric is usually the biggest line
On most garments, fabric accounts for half or more of the total manufacturing cost. The price depends on the fiber, the weight, the width, and how much of it each garment consumes — including the waste left on the cutting table. A heavyweight cotton jersey costs more per yard than a thin one, and a patterned fabric that must be matched at the seams wastes more than a solid. If you want to understand why two shirts feel so different in your hand, start with our fabric guides, which explain how common textiles are made and what they are used for.
3. Trims and labor: the CMT piece
Trims are everything that is not the main fabric: buttons, zippers, snaps, elastic, drawcords, interfacing, printed labels, and hangtags. Individually they cost pennies; together they can add a dollar or more per garment. Labor is usually quoted as CMT — cut, make, and trim — the charge for cutting the fabric, sewing the garment, adding the trims, pressing it, and packing it. CMT rises with complexity: a five-pocket jean with rivets and contrast stitching takes far more machine time than a pull-on elastic-waist short, and skilled sewing, fairly paid, costs more than the fastest possible assembly.
4. Freight and duty create the landed cost
A factory price is not the price a brand actually pays. Freight is the quiet line that turns a cheap factory price into a real landed cost. Add ocean or air shipping, insurance, customs duty — which varies widely by fiber and country of origin — plus trucking to a warehouse, and a garment that cost $5.00 at the factory door may land at $6.25. Every honest price calculation starts from that landed figure, not the factory quote. Brands that streamline this part of the chain watch it closely; our overview of AI tools for production and supply chain shows some of the ways companies now forecast and track those costs.
5. A quick worked example
Take a simple men's crew-neck T-shirt made in a run of a few thousand pieces. Fabric might come to $2.40, trims and labels to $0.35, CMT to $1.85, a garment wash and packing to $0.60, and freight and duty to $0.90. Landed cost: $6.10. Nothing exotic — and already well above the full retail price of the cheapest tees on the market, which is exactly why those ultra-cheap shirts use thinner fabric, simpler construction, and far larger production runs to get their numbers down.
6. Markup is not margin
From landed cost, the math splits two ways. A brand selling to stores applies a wholesale markup — often roughly double the landed cost, so our $6.10 shirt wholesales around $12 to $13. The retailer then applies its own markup, putting the ticket price near $24 to $26. Markup (the amount added, measured against cost) is not the same as margin (the profit share of the final price), and confusing the two is a classic beginner error. Our retail math equations for the apparel industry walk through markup, markdown, and gross margin with worked numbers, and our guide to apparel price point categories explains where the result lands — budget, moderate, bridge, contemporary, or luxury. If you are sourcing at the wholesale level yourself, our wholesale clothing directory is a useful place to see how that middle layer of the industry is organized.
7. So why the $80 shirt?
Usually, several small upgrades stack up: heavier, better fabric; more sewing operations; reinforced stitching; a wash or finish the cheap version skips; smaller production runs that spread setup costs over fewer pieces; and higher freight if it was flown in rather than shipped. Sometimes you are also paying for design, branding, and retail overhead — that part is real, but it is rarely the whole story. Read a price the way a cost sheet reads: fabric first, construction second, and brand last. You will spot genuine value — and genuine padding — much faster.