Pricing Terminologies used in Garment Export Business

Free on Board (FOB): 

In garment exporting, pricing of the garments mostly quoted on FOB. FOB is defined as a term of sale under which the price invoiced or quoted by an exporter manufacturer or a buying agency includes all charges up to placing the goods on board a ship at the port of departure specified by the buyer. It is also called as collect freight, freight collect, or freight forward. FOB is also abbreviated as freight on board.

Cost, Insurance, and Freight (CIF): 

In many supplying countries pricing is prepared based on CIF. CIF is a shorthand term for signifying that the price invoiced or quoted by an exporter includes insurance and all other charges up to the named port of destination.

Cut, make and Trim (CMT): 

In the apparel industry the buyer needs to assure the quality of raw materials. Textile fabrics of the quality or nature demanded by the buyers may not be available in the sourcing country and raw materials may be required to import. In many instances, the buyer takes on the task of purchasing and shipping the raw materials for the apparel production facility. Buyer only pays a fee to the factory for sewing, trimming, and manufacturing the final goods which is named as CMT. The finished goods are then shipped to the buyer. 

Secondly when a larger manufacturer uses production capacity of the subcontractors and job workers, subcontractors are paid for CMT only.


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