Explaining a price increase with the costing sheet as evidence means showing exactly which cost component changed, by how much, and letting the buyer trace the new asking price back to that one change, rather than simply stating a new number and asking the buyer to accept it. This lesson mainly teaches the people flow of an order: how a factory, an agent and a buyer communicate a cost change so it is believed, not just heard. Without this skill, a price increase sounds like an opinion, and a buyer has every reason to push back on an opinion; a price increase backed by a traceable costing sheet is a fact the buyer can check for itself. This page shows you the general rule for presenting a price increase, the shapes this takes in real life, and one worked case, Meridian Sourcing helping Delta Garments explain a fabric price rise to Northline Apparel.
You need: an assembled final costing sheet (lesson 4.1) and, ideally, an identified flex point that has already been exhausted (lesson 4.3). You do not need to be the one negotiating the final number; this lesson teaches how to present the evidence, not how to close the deal.
By the end of this lesson you can:
Not covered here: how to assemble the complete, negotiation-ready costing sheet that brings every skill in this course together (lesson 4.5).
| Term | Meaning |
|---|---|
| Cost component | One part of a garment's total price: fabric, trims, making, overhead, or profit. |
| FOB (free on board) | The factory delivers the goods on board the ship at its own port. Freight from there is the buyer's cost. |
| Share of price | One cost component's dollar value divided by the total price, usually shown as a percentage. |
| Formula | An instruction in a spreadsheet cell that calculates a value from other cells, instead of a value typed in by hand. |
| Cost before profit | Everything a company pays to make or buy a product, before its own profit is added. |
| Negotiating position | The target figure, walk-away figure and concession options a person prepares before a negotiation, rather than deciding them during the call. |
| Hybrid production model | A company that runs Make to Order and Make to Stock lines side by side, usually split by customer, product line or channel. |
| Pre-negotiated capacity | Factory production capacity a buyer reserves ahead of a season, before a specific order is confirmed. |
Presenting a price increase means isolating the single cost component that changed, showing its old value and its new value side by side, and letting the new asking price fall out as a direct, traceable result. A buyer who is simply told "the price is now USD 3.30" has no way to check whether the increase is fair. A buyer who is shown "fabric rose from USD 1.15 to USD 1.25, so the asking price rises from USD 3.20 to USD 3.30, with every other component unchanged" can verify the claim against the costing sheet itself. The second version does not guarantee agreement, but it removes the question of whether the number can be trusted, leaving only the question of whether the underlying cost change is itself accepted.
| What can differ | The shapes you will meet | Why it matters to you |
|---|---|---|
| Who delivers the explanation | Delta Garments may explain a price increase directly to Northline Apparel, or Meridian Sourcing, the agent representing buyers in Egypt, may carry the explanation between the two sides. | An agent's own credibility rests on presenting evidence accurately; a vague or unsupported price increase passed through an agent damages trust on both sides of the relationship. |
| Export or domestic explanation | Delta Garments explains an FOB price rise to an export buyer using the same components (fabric, trims, making, overhead, profit) that built the original FOB price. Cedar & Co. explaining a domestic price rise to its own shops uses the same components, but built to an ex-factory price plus its own delivery cost instead. | The evidence format does not change with the market; only the price label at the end of the costing sheet does. |
| A single changed component or several at once | A single fabric price rise is the simplest case to explain, since only one row of the costing sheet moves. Several components changing at once, for example fabric and overhead together, still uses the same method, just with more than one row shown as changed. | However many components change, the method stays the same: show each one's old and new value, and let the total follow from them, never announce a new total alone. |
| Make to Order, Make to Stock, or hybrid explanation | A Make to Order factory such as Delta Garments explains a price change for a specific confirmed order. A factory running a hybrid production model may need to explain the same fabric price rise separately to a Make to Order export buyer and a Make to Stock domestic customer, since each holds a different costing sheet built at a different time. | The evidence method is identical, but a hybrid factory may need to repeat the explanation more than once, for more than one costing sheet, from the same underlying cost change. |
Delta Garments' fabric cost for Order A rises from USD 1.15 to an illustrative USD 1.25 per piece, a teaching example of a cotton price increase, not a change to Order A's own fixed figures used elsewhere in this course. Meridian Sourcing, the agent representing buyers such as Northline Apparel in Egypt, carries the explanation from Delta Garments to Northline. Rather than simply stating a new asking price of USD 3.30, Meridian Sourcing presents the full costing sheet with only the fabric row changed, so Northline Apparel can see for itself that trims, making, overhead and profit are all unchanged from the original quote.
| Cost component | Original (USD per piece) | New (USD per piece) | Changed? |
|---|---|---|---|
| Fabric | 1.15 | 1.25 | Yes, illustrative cotton price rise |
| Trims | 0.20 | 0.20 | No |
| Making | 1.10 | 1.10 | No |
| Overhead | 0.49 | 0.49 | No |
| Profit | 0.26 | 0.26 | No |
| Total (asking price) | 3.20 | 3.30 | Rises only by the fabric change |
A common mistake is telling a buyer "the price is now USD 3.30" without showing the costing sheet behind it. Even when the increase is entirely justified, this leaves the buyer with no way to check the claim, and a buyer that cannot check a number has every reason to assume it includes more than the real cost change, whether or not that is true.
When a price goes up, showing exactly which part of the cost changed is more convincing than just stating a new number. If only the fabric price rose, show the old fabric cost and the new fabric cost side by side, and let the new total come from adding that one change, with every other part of the price unchanged. A buyer who can check the claim against the sheet is more likely to accept it than a buyer who is only told a new number and asked to trust it.
Karim, the production manager at Delta Garments, tells Meridian Sourcing to simply inform Northline Apparel that Order A's price is now USD 3.30 per piece, without sending the costing sheet behind the change.
Here is the message Karim asked Meridian Sourcing to send:
Is this message likely to be accepted without pushback? Decide before opening the answer.
Unlikely, and Meridian Sourcing should say so before sending it. Two facts decide this.
First, the message states a conclusion without evidence. It names cotton prices as the cause but shows no figures connecting that cause to the specific USD 0.10 increase, leaving Northline Apparel unable to check whether USD 0.10 is the right amount or an inflated one.
Second, an agent's own credibility is at stake in what it passes along. If Meridian Sourcing forwards an unsupported price claim and Northline Apparel later discovers the real fabric change was smaller, the agent's own reputation for accurate reporting is damaged, not just Delta Garments' request.
The safer version of this message shows the costing sheet itself: fabric 1.15 to 1.25, every other component unchanged, total 3.20 to 3.30 — letting Northline Apparel verify the claim rather than simply trust it.
If Meridian Sourcing sends the unsupported version and Northline Apparel pushes back asking for proof, the exchange now takes an additional round of correspondence before the real number is even discussed, delaying a decision Delta Garments needs before its next production run.
Sending the costing sheet as evidence the first time, rather than after a buyer pushes back, is what keeps this delay from happening at all.
Using the Final costing sheet, copy the original row values into one column and the new values into a second column, changing only the component that actually moved. Leave every unchanged component identical in both columns, and let the total row's formula calculate both totals, so the buyer can see the new total is a direct result of the one visible change.
[Download the Final costing sheet](../../templates/T12-C04-final-costing-sheet.xlsx)
1. Why is a price increase easier to accept when the buyer can see which single component changed?
2. Fabric rises from USD 1.15 to USD 1.25 with every other component unchanged. What is the new asking price, starting from an original 3.20?
3. Order B, the jeans, has a fixed asking price of USD 9.80. If washing cost rises by USD 0.15 with every other component unchanged, what is the new asking price?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Cost component | عنصر التكلفة | Élément de coût | Maliyet bileşeni | One part of a garment's total price: fabric, trims, making, overhead, or profit. |
| FOB (free on board) | تسليم على ظهر السفينة في ميناء المصنع | FOB (franco à bord) | FOB (gemide teslim) | The factory delivers the goods on board the ship at its own port. Freight from there is the buyer's cost. |
| Share of price | نسبة السعر | Part du prix | Fiyat payı | One cost component's dollar value divided by the total price, usually shown as a percentage. |
| Formula | صيغة حسابية | Formule | Formül | An instruction in a spreadsheet cell that calculates a value from other cells, instead of a value typed in by hand. |
| Cost before profit | التكلفة قبل الربح | Coût avant profit | Kârdan önceki maliyet | Everything a company pays to make or buy a product, before its own profit is added. |
| Negotiating position | موقف تفاوضي | Position de négociation | Müzakere pozisyonu | The target figure, walk-away figure and concession options a person prepares before a negotiation, rather than deciding them during the call. |
| Hybrid production model | نموذج إنتاج مختلط | Modèle de production hybride | Hibrit üretim modeli | A company that runs Make to Order and Make to Stock lines side by side, usually split by customer, product line or channel. |
| Pre-negotiated capacity | طاقة إنتاجية محجوزة مسبقًا | Capacité pré-négociée | Önceden ayrılmış kapasite | Factory production capacity a buyer reserves ahead of a season, before a specific order is confirmed. |
You can now explain a price increase with the costing sheet itself as evidence. The final lesson of this course brings every skill from this course together into one complete, negotiation-ready costing sheet for a real order. Back to the course map