HOW TO COST A COLLECTION BEFORE YOU CUT IT.

Costing is a design decision

Costing is usually treated as something that happens to a collection once the collection exists: the samples are finished, the invoices are added up, a multiple is applied, and the resulting price is presented to the market as though it were inevitable. It is not inevitable. It is the arithmetical consequence of decisions taken months earlier, most of them creative.

A fabric at a higher price per metre, a fuller skirt, a pattern that has to be matched, a lining that has to be cut on the bias — each of those is a design decision with a number attached, and each is far easier to take differently in February than to defend in September. Costing done early does not restrict the work. It shows you where the freedom actually is.

Start at the garment, never at the metre

The price per metre is the least useful number in a fabric conversation, because it is not the number you pay. What you pay is that price multiplied by everything the garment consumes — and consumption is decided by the pattern, by the width of the cloth, and by how much of the roll is lost between the pieces.

Three things move that figure before anything else does. Width: a design that takes 2.4 m at 140 cm can take well over 3 m at 110 cm. Direction: a nap, a pile, a one-way print, or a repeat that has to be matched all force the pieces to lie the same way, and the marker gets longer. Cutting loss: the metres between the pieces, usually somewhere between ten and fifteen per cent on a conventional lay, and higher on anything cut on the bias.

Only once those are known does a costing sheet mean anything. The shape of one looks like this.

Apply an illustrative wholesale multiple of 2.4 and that garment leaves at EUR 435. Apply a retail multiple of 2.5 on top and it reaches the shelf near EUR 1,090 before VAT. The multiples themselves vary by market and by channel, and they are not the interesting part.

The interesting part is what happens when one number moves. Take the same garment in a cloth at EUR 52 rather than EUR 38: the landed cost rises by EUR 37.64, which is unremarkable — and the shelf price rises by roughly EUR 226, which is not. A fabric decision worth fourteen euros a metre has just moved the garment into a different part of the market. That is the whole argument for costing before cutting, in one line.

The costs that do not arrive per unit

Development is the line most often left out, and it is the one that quietly decides whether a first collection washes its face. Pattern cutting, toiles, the metres consumed by prototypes, grading, fittings, and the samples that never make the range are all real money spent before a single sellable unit exists.

They have to be divided across the run — and the run has to be the number you will honestly produce, not the number you hope to. Amortise EUR 840 of development across 60 units and it is EUR 14 a garment. Amortise it across the 22 units you actually make and it is EUR 38, which has just eaten the margin you were counting on. Optimism about volume is the most expensive assumption in fashion.

Price from the market backwards

Cost plus a multiple produces a number. It does not produce a position. The sequence that works runs the other way: establish who the customer is, what they already buy, what they pay for it, and where your garment sits on that rail — then derive the landed cost the garment is allowed to reach, and design and source against that ceiling.

This is why costing belongs to business strategy rather than to bookkeeping. A ceiling of EUR 180 and a ceiling of EUR 320 lead to different fabrics, different constructions, different minimums, and different suppliers. Deciding that at the start is coherent. Discovering it at the end is a markdown.

Minimums and lead times are costs

Two commercial facts sit on top of every costing sheet and are routinely mistaken for logistics.

• Minimums. Initial orders for prototype development and production reorders carry different minimums, and both vary by supplier and fabric type. Minimums generally apply per colour, so a five-colour story is five commitments. Where the minimum exceeds what the run needs, the surplus is not a saving — it is inventory, and it has to be costed as such.
• Lead times. Depending on the material, delivery can extend to sixteen weeks. Sixteen weeks is not a date on a calendar; it is four months of working capital committed before a single unit can be sold. Ready-goods stock, dispatched immediately, is a cash-flow instrument as much as a convenience — which is also why its availability has to be confirmed at the moment of enquiry.

Both are reasons to see fabric a year ahead rather than a season ahead. Lead time you know about is a plan. Lead time you discover is a delay.

Cash flow is what actually closes brands

A collection can be profitable on paper and still fail, because profit and cash arrive at different moments. Fabric is paid for on order. Make is paid on completion. Stockists pay thirty to sixty days after delivery, and retail arrives one unit at a time across a season that may run six months.

Model the timing, not only the totals. Two questions are usually enough to expose the problem: what is the largest amount of money that will be outside the business at any single moment, and in which week does that happen? If the answer is larger than the business can carry, the collection needs to be smaller — before it is designed, rather than after it has been cut.

The order the decisions belong in

1. Define the customer and the price position the collection is aiming at.
2. Work back to a target landed cost per unit, and treat it as a ceiling.
3. Select fabric against that ceiling, with consumption and width in the conversation from the first appointment.
4. Confirm minimums, availability, and lead time in writing before the design is finalised.
5. Prototype, then measure real consumption off the finished pattern rather than the estimate.
6. Re-cost with the real numbers, including development amortised over an honest run.
7. Fix the run size against the cash available, not against the ambition.
8. Build the critical path backwards from the delivery date, with the longest lead time setting the start.

Nothing in that sequence is exotic, and none of it needs a finance background. What it needs is the arithmetic done while the decisions are still reversible — which, for most of a collection’s life, they are.