Lab dip is a specimen of dyed fabric or yarns prepared for color approval. Prior to bulk fabric dyeing lab dip approval is taken from buyer. Apparel brands evaluate fabric color visually using a light box and/or digitally using the spectrophotometer. Apparel supplier gets lab dips developed from dyeing mills and they send lab dip to the buyer for color approval.
Lab dip submission procedure may vary from one brand to another. Normally, prior to lab dip submission, supplier match the color with the given color standard (may be pantone color code or fabric sample) in light box under defined light source (e.g. D65). (Note: Follow the buyer instruction for lab dip submission procedures.) Supplier receives multiple color options from mill and from those color options, 3 options (those match best to the standard) are sent to buyer. Normally lab dip swatch is made of 6 inch X 6 inch fabric cuttings.
Fabric color approval procedure is explained in this post. See the sample of lab dip submission form.
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Also See: What is Bit loom / Desk loom?