Illustrative situation
A brand has a factory price of a few dollars for a T-shirt and wants to price it for retail. A friend says to multiply by four. The buyer wonders whether a simple multiple is safe, or whether it hides costs that will eat the margin.
Main answer
Work from the landed cost per unit, not the factory price: add freight, duties, insurance and handling to reach what the garment costs when it is in your warehouse, then add the costs of selling it, such as returns, payment fees, packaging and marketing. Set the retail price from the margin you need and check it against what comparable products sell for.
Why a fixed multiple can mislead
A rule such as doubling for wholesale and doubling again for retail is a convention, not a law, and it ignores that costs vary by product. A light T-shirt and a heavy hoodie cost very different amounts to ship, and a small order carries a higher share of fixed costs. A multiple may leave too little margin on a heavy item and too much on a light one, so it is better as a sanity check than as the method.
Build the landed cost
Start with the unit price on the agreed trade term. Add international freight, insurance, customs duty and taxes where they apply, broker and port fees, and delivery to your warehouse. Divide the total by the number of units that actually arrive saleable. If you expect some loss or seconds, spread that cost across the sellable units instead of the ordered units, which gives a truer figure.
Add the costs of selling
Retail pricing has to cover returns, payment processing fees, platform or retailer fees, packaging, shipping to customers, discounts, and marketing. If you sell wholesale, the retailer takes its own margin, so your wholesale price must leave room for it. List each cost per unit as a percentage or amount, and be realistic about discount periods.
A small worked structure
Write the calculation as rows, not as a single multiple: unit price, freight per unit, duty and taxes per unit, handling and delivery, which together give the landed cost; then returns allowance, payment and platform fees, packaging and marketing per unit; then target margin. The retail price is whatever covers all rows and still sits within what shoppers expect to pay for a comparable product. If the sum does not fit, the rows tell you which one to attack first.
Related reading
See the mens underwear manufacturer page for the products behind this topic, and read landed cost next. Both are general guides, not a quotation.
Set the price and test it
Decide the gross margin you need, calculate the price that delivers it, and then compare it with competing products. If the market will not pay that price, you have three choices: cut cost through specification or quantity, accept lower margin, or change the product. Review the numbers after the first sales, when real return and discount rates are known.
Fact, recommendation, uncertainty
- Established fact
- A garment’s landed cost includes freight, duties and fees on top of the unit price, and selling costs sit on top of that.
- Recommendation
- Calculate landed cost per sellable unit, add selling costs, set the price from the margin you need, and test it against the market.
- Uncertainty
- Duties, freight and platform fees change over time, so any worked example would age quickly and we give no figures.
Sources and further reading
No single official source defines this, so this answer is a recommendation based on how production and buying are commonly organised. Confirm every figure and term in your own quotation.
More perspectives from the team
Three further views on the same question, each by function. They add conditions and limits to the main answer; they are editorial notes, not customer reviews.
Sino Finetex Editorial Team Sourcing
Ask the factory for prices on the trade term that lets you calculate landed cost most easily, and get forwarder quotes for the same shipment. Limit: freight and duty rates can change between quote and arrival, so keep a margin of safety. Ask the factory to confirm the packed weight and carton size of one unit, because freight cost per piece follows from them.
Sino Finetex Editorial Team Product selection
Use margin analysis to choose which products to range: items with high landed cost relative to price may not be worth carrying. Limit: a loss-leader basic can still be worth stocking if it brings customers in. Compare margin by product before deciding the range, since a heavy hoodie and a light T-shirt rarely earn the same percentage.
Sino Finetex Editorial Team Quality & care
Include the expected rate of seconds and returns in the cost, since quality problems turn directly into margin loss. Limit: do not set a return allowance so high that it hides a real defect problem. Track actual return reasons after launch and feed them back into the next quotation and specification.
Related products
- Men’s Underwear Manufacturer
Sino Finetex product page
- Custom Briefs Manufacturer
Sino Finetex product page
- Products
Sino Finetex product page
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- TalkHow should I split a first order across several styles without raising the risk?
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- Men’s Underwear Wholesale Supplier: Volume Pricing, Reorders and Stock Planning
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