One of the questions I’m asked almost daily is “How much is it going to cost to make my <insert product name>?” My answer is always the same: there is no quick and easy answer! Estimating costs requires time and research and even within a specific product category, there is no one-size-fits all approach.
Why is the subject of cost so individual? Because the decisions you make when designing, sourcing, and producing your product affect your cost in unique ways. For example, opting for a zipper closure on a garment instead of snaps may raise the price of materials. Producing in North Carolina instead of in Mexico City may increase assembly costs. Making a children’s toy that requires extensive testing may be more expensive to develop than a similarly constructed pet toy that has no associated testing requirements. And the list goes on.
While quick answers may be hard to come by, with a little research and a basic understanding of the steps involved in making something, you can paint a reasonably realistic picture of how much money you’ll need to produce your goods.
Below is a sample budget for a Made in the USA activewear top. You can use this budget as a checklist for securing your own estimates with vendors (domestic or overseas), or simply for ballpark figures as you wade into US-based production for the first time. Please note however that your own budget may vary widely based on the complexity of what you’re making. Further, if your product requires molds or dies (for shaping or cutting certain materials) or other tooling, your budget punch list will look different.
Development costs are one-time fees for work related to creating or refining your product design. People with creative backgrounds may be able to avoid certain development costs by doing some of the work themselves. Others will be totally reliant on the help of patternmakers, technical designers and other creative professionals in order to prepare their design for production.
Development of Activewear Top
- Design Boards: $500 – Technical line drawings showing the construction and style of the garment.
- Fabric Sourcing: $350 – Finding a source for production fabric. Some people prefer to skip this step with a development partner and do their own sourcing research.
- Trim Sourcing: $125 – Finding sources for things like buttons, cords, etc.Some people prefer to skip this step with a development partner and do their own sourcing research.
- Label Design: $300 – Graphic layout of care and brand label(s)
- Hang Tag Design: $300 – Graphic Layout of hang tag affixed to garment.
- Samples: $850 – Three rounds of prototypes to develop design, plus cost of sample materials.
- Patternmaking: $550 – Sewing patterns for all phases of sampling. Includes revisions to patterns based on in-person fittings.
- Grading and Sizing: $725 – Make patterns for all necessary sizes. Sew test samples for size range to confirm fit.
- Tech Pack: $300 – Master document outlining measurements, materials, construction more.
- Meeting Time: $250 – Meetings with development team to review and discuss the design.
- Shipping: $100 – Shipping samples and materials between development team and client.
TOTAL DEVELOPMENT COSTS: $4,350
Production costs are the recurring invoices you will pay each time you produce a run of your product. They include all materials and assembly steps, such as cutting and sewing, and are almost always inversely correlated to volume. For example, the more fabric you order, the lower the cost per yard.
Production Costs for 100 pcs of Activewear Top:
- Fabric: $700 – Fabric order for production.
- Trims: $230 – Trim order for production.
- Labels: $50 – Label order for production.
- Hang Tags: $30 – Hang tag order for production.
- Cut/Sew: $1,400 – Cutting, sewing and trimming the garment.
- Packing: $50 – Affixing hang tags and packing finished garment in polybags.
- Freight: $30 -Shipping 100 pcs finished product to final destination.
PRODUCTION COSTS: $2,490
Approx 10% of total budget, to cover unexpected costs
Here are a few additional costs that may be applicable to your project.
Testing: Are you making an item that requires testing with a certified agency? Children’s products in particular must meet federal requirements. Contact the Consumer Product Safety Commission with questions.
Quality Control: Will you pay someone to be on-site to monitor quality? Or will you yourself do this? If so you’ll need to account for hourly fees plus travel costs.
Additional Shipping: When you are researching the cost of fabric or materials, does your estimated price include freight? Make sure anything that needs to move from one point to another – including samples, materials and finished goods – is included in your budget. I recommend adding in at least several hundred dollars for miscellaneous freight fees.
‘Over-Budget’ Costs: What happens if your development work takes more time than expected? For example, you secured an estimate for three rounds of prototyping, but you actually need five in order to reach a sample you are satisfied with. Including a 10-20% buffer in your budget for unexpected costs is a wise move.
Need help breaking down a budget for your project? Learn about Support options here.