Understanding Manufacturing Costs is Important This includes the cost of materials (polyester, cotton, etc.), labor, and energy used in the production process.
Manufacturing Overhead
Direct Labor
Direct Materials
Pricing: Setting competitive prices that cover costs and generate profits.
Inventory Management: Controlling inventory levels to minimise holding costs and avoid stockout.
Cost Reduction: Identifying opportunities to reduce costs through process improvements, efficient resource utilisation, and supplier negotiations.
Decision Making: Making informed decisions about product mix, production volumes, and outsourcing.
Financial Reporting: Accurately reporting manufacturing costs for financial statements and tax purposes.
By carefully analysing and controlling manufacturing costs, businesses can improve their profitability and competitiveness in the market.

These are additional costs incurred when goods are imported, such as customs duties, tariffs, and shipping fees.Landed costs refer to the total cost of a product, including all expenses incurred from the point of origin to its final destination.

Understanding landed costs is crucial for businesses that import goods for several reasons:
Accurate Pricing: Accurately calculating landed costs helps businesses set competitive prices for their products.
Inventory Management: Knowing the true cost of inventory can help optimize stock levels and reduce carrying costs.
Cash Flow Planning: By anticipating and budgeting for landed costs, businesses can better manage their cash flow.
Risk Management: Identifying potential risks, such as fluctuations in exchange rates or changes in import duties, allows businesses to take proactive measures.

By carefully considering all these factors, businesses can make informed decisions about their sourcing and pricing strategies, ultimately improving their profitability.

Protecting the goods during transportation and storage. According to the World Shipping Council (WSC), on average, about 1,566 containers are lost at sea each year. However, it’s important to note that this figure can fluctuate significantly from year to year, depending on factors like weather conditions and shipping incidents

Retailers need to cover their operating costs and make a profit. Retailer margins represent the difference between the cost price of a product and its selling price. This margin is crucial for retailers to cover various operating costs and generate a profit.

Key Operating Costs Covered by Retail Margins /
Rent: Cost of leasing or owning retail space.
Utilities: Electricity, water, heating, and cooling expenses.
Staff Wages: Salaries and wages for employees, including sales staff, management, and support personnel.
Insurance: Coverage for property, inventory, and liability.
Security: Costs related to security systems, alarms, and security personnel.
Inventory Costs:
Purchasing Costs: The initial cost of acquiring products from suppliers.
Storage Costs: Expenses associated with warehousing and storage facilities.
Shrinkage: Losses due to theft, damage, or spoilage.
Marketing and Advertising:
Promotional Costs: Expenses for advertising, marketing campaigns, and sales promotions.
Public Relations: Costs for public relations activities and media outreach.

Various taxes, such as VAT and sales tax, can significantly impact the final price.

Costs associated with advertising, promotions, and getting the product to the consumer

Clubs often charge significant licensing fees for the use of their brand and logos.