Cost Estimation pre-costing management Quotation management Risk Management

Quotation & Pre-Costing Management: A Key Factor for Garment Business Success

Jun 08, 2024

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Quotation & pre-costing management play an important role in the success of any garment business as well as in earning profitable revenue. Thus, by identifying appropriate costs and rebating correct quotes, garment manufacturers can organize processes and many other activities to avoid waste and achieve higher profits.


Before the actual process begins, a well-defined process known as Quotations and Pre-Costing Management determines and analyzes various costs associated with garment manufacturing in relation to the production process. There is also a need to evaluate the costs involved in the acquisition of products or services, such as material costs, employee wages, as well as overhead costs, in order to give a proper cost or quote. Appropriate Cost and Quotation Management in this region will help garment manufacturers sustain the health of their profit margins, create precise pricing mechanisms, control their budgets properly, and design their production streams.




Major advantages of adopting the policy for the garment industry


  • Accurate Cost Estimation: Accurate pre-costing can help the garment manufacturers to estimate the cost in an accurate manner that is conducive in avoiding under-costing or over-costing of the products. 

This entails calculating the amount of money that is used to acquire the material (C_materials), the amount of money used to pay the workers (C_labor), and other expenses incurred by the company in the production process (C_overheads).The formula for total cost (C_total) is:The formula for total cost (C_total) is:


C (total​) = C(materials)​+C(labor​)+C(overheads)


  • Competitive Quotation Management: The total cost is added to a desired production profit margin (M) while generating competitive quotes. The quotation price (Q) can be calculated as: The quotation price (Q) can be calculated as:




If the desired profit margin is 20% (0. 20), then the quotation price would be


Q=100×(1+0. 20)=120


  • Enhanced Budget Management: Quotation and pre-costing management enhance the budgeting process by clearly indicating the prices that clients are willing to pay for certain products and services or the costs incurred in a project before the actual initiation of the project.
  • Streamlined Production Planning: Through cost calculations, garment manufacturers can prepare schedules that can effectively facilitate production.  
  • Increased Client Satisfaction: With establishing the credibility of the business, there is always the importance of ensuring that quotes given are accurate as well as competitive to enable the creation of a strong bond with the clients.
  • Risk Management: In this context, the concept of pre-costing enables the business to recognize future cost problems at an early stage of production.

Its constituents embrace aspects including Enquiry Management, Style Development, Quotation for Order, Projection and Budget/Costing; with Cost and Quotation Management being vital. Overall, the mastery of these sub-modules enables different aspects of garment businesses to run smoother, be more cost-effective, and deliver greater satisfaction to clients. Let’s explore these aspects in detail, along with the key features of a robust quotation and pre-costing system.


Sub-Modules of Quotation & Pre-costing Management: 


  • Inquiry Management
    • Streamline Buyer Inquiries: Effectively monitor key buyer information and use this data to respond with the appropriate quotes to suit a buyer’s specific requirements.
  • Style Development
    • Innovate with Precision: Design garments that will meet all the buyers’ expectations while at the same time maintaining the best quality at reasonable prices.
  • Quotation for Order
    • Deliver Competitive Quotes: Develop accurate and more detailed cost estimates, which allow competitors to compete on both product price and profitability to gain more orders.
  • Projection
    • Forecast with Confidence: To ensure that buyers are met on time, manage their order expectations and reservations to ensure that production is always in harmony with market trends and demands. undefined

For instance, if a manufacturer receives 500 units of order monthly and expects a 10% increase next month, the projected demand would be: 


Projected Demand=500×(1+0.10)=550


  • Budget/Costing
    • Control Your Finances: Maintain detailed budget spreadsheets coupled with check and balance systems, to make sure each cost is recognized and spending plans are accurate.


Key Features


  1. Handle All Buyer Quotations with Approval Authority
    • Maintain Consistency and Accuracy: Work closely with the various buyers to streamline certain buyer quotations to ensure that all quotes that are provided match the company’s standards and profitability.
  2. Buyer Projection/Reservation Management
    • Optimize Production Schedules: Strategically prioritize and coordinate buyer forecasts and orders to match production and supply with market needs to avoid overstock or stockout situations.
  3. Budget Sheet Preparation with Multilayer Approval System
    • Ensure Financial Accuracy: Prepare and design complicated budget sheets that have passed several approval stages and thus have fewer mistakes and better control over financial processes.
  4. Buyer inquiry Analysis
    • Gain Market Insights: Analyze buyer inquiries to understand trends and preferences, enabling you to adapt your offerings to market demands effectively.


Quotation & Pre-Costing Management systems are some of the most vital systems that garment manufacturers should consider to excel in the market. In this segment, how firms perform will determine operational effectiveness, accuracy in financial measures, and customer satisfaction. Co-opt these features to take your garment business to the next level and emerge as a winner in the industry. 



Are you interested in taking your garment business to new heights with unmatched Quotation & Pre-Costing Management? Find out how our array of services make your business run more efficiently, become more profitable, and increase client satisfaction. Please don’t pass on this opportunity to change the way your business runs. To receive a knowledge-sharing consultation, please contact us and begin the process of mastering your cost management strategy!

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