COSTING SHEET

The costing sheet is an essential part of the tech document pack that is sent to the supplier along with the specification sheet. The costing sheet will specify which fabrics should be used to create the garment as well as all of the correct trims and fixings. This determines how much the product will be able to sell for and how much margin the retailer will make and what their targets will be.

Negotiation is an important step for the buyer to include while thinking about the costing of a garment. Supplier relationships are an important part of being a buyer, and this includes listening and respecting supplier needs, meeting them in person and continuing to be professional and supportive throughout all jobs. Knowing the cost of a garment and is really important in a negotiation to know where costs can be cut and which part of the process is necessary. The first stage of negotiation is research and planning, then making an offer to the supplier; this rarely gets accepted and needs to be gone over multiple times. Within the offer stage there will be discussing and bargaining, followed by an outcome that both the buyer and supplier are happy with. The main areas to negotiate are: price, quality, quantity, delivery time, delivery terms, returns and number of sizes / colours. There is less flexibility in price negotiation with new fabrics or technology and processes, as there are not many alternatives to these processes and no cheaper ways to do this.

Bershka uses the ’99 effect’ pricing strategy throughout all of their garments. This is an example of psychological pricing, which means that it causes the customer to think that the garment is cheaper, even though it is only by a penny. It creates an illusion that many customers will fall for, and it has been proven that customers are more likely to buy something priced at 99p rather than £1. “Researchers believe this is because consumers focus on the big denomination rather than the small denomination and partly because there is an emotional incentive – people feel like they are getting more value for their money. If your product or service is likely to be compared with a rivals then cutting a penny off the price to make it ‘.99’ could make people more likely to buy it.” (Dunsby 2017)