Bag Programme Cost Planning: How to Build a Knit Bag Spend Model Before You Brief
A bag programme cost plan fails in one of two ways: the unit price is right and the total is wrong, or the total is right for the wrong quantity. Both are arithmetic problems and both are solved by the same equation. Total programme cost equals unit cost times quantity, plus programming, sampling, freight and duty, compliance screening and a return allowance — and only the first of those six scales with volume. On a knit bag programme quoted at USD 4.80 FOB Xiamen with an MOQ of 100 pcs per style and colourway, the one-off block typically runs USD 620 to USD 1,050, and that block is the reason a 100-piece run and a 1,200-piece run can never be compared on the unit price alone.
The Spend Model in One Equation
Total programme cost equals unit cost times quantity plus five blocks that do not scale with quantity: programming, sampling, freight and duty, compliance screening, and a return allowance. That is the model, and writing it down before a brief is sent is what separates a cost plan from a price list.
The reason the equation matters is that those five blocks move in different directions as volume rises. Programming and compliance screening are fixed in absolute terms, so they shrink as a percentage of each unit. Freight and duty rise with quantity but not in a straight line, because a knit is charged on cube rather than on weight. The return allowance is a rate, so it scales exactly, and it is the only line in the model that behaves the way most buyers assume all of them do. A programme costed without separating the five will under-call the small run and over-call the large one.
Unit Cost: The Six Lines Behind One Number
On a standard E12 knitted tote at 320 g/m² quoted at USD 4.80 FOB Xiamen, the unit splits roughly 38% yarn, 24% knitting, 9% dyeing and finishing, 14% assembly, 8% hardware and 4% packaging, with about 3% waste — so the largest line is yarn and the most design-negotiable line is assembly.
Two consequences follow for a cost plan. A GSM change moves the yarn line and therefore the unit, and it has to be checked against the thresholds the programme has committed to: about 20,000 Martindale rubs to ISO 12947-2 and roughly 600 N of strip tensile strength to ISO 13934-1. A component-count change moves assembly and hardware at the same time, and it is the only lever that reduces two lines while remaining invisible on the finished bag. Neither is available after bulk begins, which is why both belong in the plan rather than in the negotiation.
| Cost element | Scales with quantity? | Planning value | Main lever |
|---|---|---|---|
| Yarn | Yes, linear | About USD 1.82 per piece | GSM and fibre choice |
| Knitting minutes | Yes, linear | About USD 1.15 per piece | Gauge, structure and cycle time |
| Dyeing and finishing | Yes, linear | About USD 0.43 per piece | Stock shade against custom shade |
| Assembly | Yes, linear | About USD 0.67 per piece | Number of operations |
| Hardware and trim | Yes, with minimums | About USD 0.38 per piece | Component count and finish |
| Packaging | Yes, linear | About USD 0.19 per piece | Flat pack against stuffed pack |
| Programming file | No, one-off | USD 180 per stitch file | Reuse across colourways |
| Sampling | No, one-off | USD 45 per sample piece | Credited against first bulk |
| Compliance screen | No, per material | About USD 350 per material | Material count and market |
One-Off Costs: Programming, Sampling and Colour Standards
The one-off block on a knit programme is programming plus sampling plus colour standards, and on a two-colourway launch it typically lands between USD 620 and USD 1,050 before any hardware minimum is counted.
Programming is the stitch file, and it is the item most often misread. A knitted shape is written once on the machine controller and then runs unchanged, so the cost is a fixed fee rather than a per-minute charge. The planning consequence is asymmetric and worth knowing before the range is drawn: a colourway change costs nothing in programming, while a shape change costs the full fee again. Sampling is quoted per piece at USD 45 and is credited against the first bulk order, so a programme that orders three samples recovers USD 135 of the one-off block at confirmation. Colour standards are the third element: a stock shade costs nothing beyond the yarn, while a custom shade books a dyelot minimum of about 300 kg and adds roughly 10 working days to the booking.
- Programming fee
- USD 180 per stitch file; unchanged by colourway, repeated on every new shape
- Sampling fee
- USD 45 per sample piece, credited against the first bulk order
- Sampling window
- 7 working days from confirmed specification
- Bulk window
- 30 days from sample approval
- Custom shade minimum
- About 300 kg dyelot, adding roughly 10 working days
- Stock shade
- No surcharge and no dyelot commitment
- Compliance screen
- About USD 350 per material, independent of order quantity
Amortising the Fixed Block Across Forecast Quantity
Amortisation is the arithmetic that makes a small programme look expensive and a large one look inexpensive, and it is simply the one-off block divided by the quantity in the forecast.
With a one-off block of USD 620, the same bag carries USD 6.20 of fixed cost at 100 pieces and USD 0.52 at 1,200 pieces. That is roughly 129% of a USD 4.80 unit at the low volume and about 11% at the high one, and it is the single largest reason those two programmes should never be compared on the unit price. The planning move that follows is to decide which one-off items are programme-specific and which are reusable across seasons: a stitch file written for one shape can usually run again next season without a rewrite, and a compliance screen stays current while the material and the destination market are unchanged.
- Divide the one-off block by forecast quantity, not by the minimum, before comparing two quotations.
- Reuse one stitch file across colourways, because programming is charged per shape rather than per colour.
- Keep the compliance screen current, because it is issued per material and per market and expires with either.
- Credit the sampling fee against bulk on confirmation, so the line leaves the total rather than lingering in it.
- Plan a second season before fixing the first quantity, since amortisation is the only line that improves without negotiation.
Freight, Cube and the Volumetric Penalty
Freight on a knitted bag is charged on cube rather than on weight, so the two variables inside the line are packing method and mode — and on most programmes they are worth more than the entire unit negotiation.
A knitted loop structure recovers from compression, which makes flat packing viable in a way it is not for a structured sewn bag, and on a bulky product that decision is paid on every carton of every shipment. Sea freight at about 21 days costs roughly USD 0.31 per piece on this product class; air freight at about 5 days costs roughly five times that. The differential per piece can exceed the FOB unit itself on a compressed schedule, which is the reason freight mode is a calendar decision wearing a cost decision's clothes. The rule for a cost plan is to price both modes at brief stage and treat the difference as the price of the schedule risk the programme is carrying.
Duty, Classification and Compliance Screening
Duty is a rate applied to customs value and compliance screening is a fee applied per material, and confusing the two is the most common error in a knit programme cost plan.
Duty follows the HS classification of the finished bag in the destination market, and knitted bags do not classify identically across markets; a rate carried over from a woven or coated bag category is a guess, and the importer should confirm it before the plan is signed. A planning allowance of about 12% of customs value is reasonable and must be replaced with the confirmed figure before commitment. Screening behaves completely differently: charged per material at about USD 350, it is a rounding error on 1,200 pieces and a visible percentage of the unit on 100. A programme that shortens its material list therefore saves three times — on the purchased item, on the assembly operation and on the screen.
Confirm classification first
The duty rate follows the HS code in the destination market, so a rate borrowed from another bag category is an assumption, not a figure.
Count materials, not pieces
Restriction screening is charged per material, so the material list — not the order size — drives the compliance line.
Screen before sampling
A screen run early prevents a material substitution after 7 working days of sampling have already been spent on it.
Keep certificates current
REACH, Prop 65, CPSIA and OEKO-TEX STANDARD 100 documentation is requested at customs and again at retailer onboarding.
Return, Defect and Allowance Lines
A cost plan that stops at landed cost is incomplete, because the defect rate and the return allowance are the two lines that decide whether the programme made money after the season rather than at the point of despatch.
The defect side is bounded by inspection rather than by hope. Release runs against AQL 2.5 to ISO 2859-1, which sets the sample size and the accept and reject numbers for a given lot, so the exposure is a known distribution rather than an unknown one. The commercial side is not bounded by any standard and has to be estimated: a return allowance of about 2.4% of units shipped is a reasonable planning figure for a bag in general retail, and it belongs in the plan as a cost line rather than arriving as a surprise. The two interact, because a fault that passes AQL 2.5 at despatch can still generate a return three months later, which is why the allowance and the inspection level are one decision.
Sensitivity: Three Volumes Against One Specification
Running the model at three volumes is what turns a cost plan into a decision, because it shows which block dominates at each quantity and therefore which lever is worth pulling.
At 100 pieces the fixed block dominates and the lever is reuse: share one stitch file, keep to stock shades, screen fewer materials. At 400 pieces the freight and duty block dominates and the lever is cube: flat packing and sea mode. At 1,200 pieces the unit dominates and the lever is specification: GSM, component count and cycle time. A programme that pulls the 1,200-piece lever at 100 pieces will spend the season discovering that the saving landed on the wrong line.
| Volume | Fixed loading per unit | Dominant cost block | Lever to pull | Landed band above FOB |
|---|---|---|---|---|
| 100 pcs | About USD 6.20 | Programming, sampling, screening | Reuse one file, stock shade, fewer materials | About 25% to 40% |
| 400 pcs | About USD 1.55 | Freight and duty | Flat packing and sea mode | About 21% to 30% |
| 1,200 pcs | About USD 0.52 | Unit cost lines | GSM, component count, cycle time | About 18% to 28% |
A Worked Example With Named Variables
The worked example below uses named variables rather than claimed results, so any buyer can substitute their own figures and reach their own answer.
- Quantity Q = 600 pcs across two colourways, so 300 per colourway against the 100 pcs per style and colourway minimum.
- Unit U = USD 4.80 FOB Xiamen at 320 g/m², gauge E12, with a size 5 coil zip and one pair of ring tabs.
- Programming P = USD 180, one stitch file shared across both colourways.
- Sampling S = USD 45 times 3 = USD 135, credited against bulk, so a net of zero at confirmation.
- Compliance C = USD 350 times 2 materials = USD 700.
- Freight F = USD 0.31 times 600 = USD 186 by sea at about 21 days.
- Duty D = 12% of the USD 2,880 customs value = about USD 346.
- Total before allowance = 2,880 plus 180 plus 700 plus 186 plus 346, which is approximately USD 4,292.
- Landed per piece = 4,292 divided by 600, which is about USD 7.15.
Two readings matter. The landed figure sits about 49% above the FOB unit at 600 pieces, which is outside the band most buyers assume and is driven almost entirely by freight, duty and screening. And if the quantity were halved to 300, only USD 1,440 of the unit block would fall away: the total would be about USD 2,852, or roughly USD 9.51 landed per piece. A 50% cut in volume produces a 33% rise in unit cost, and that asymmetry is the whole argument for settling the quantity before settling the specification.
Where Season Two Recovers the Money
Most of the fixed block is recoverable in season two, so a cost plan that treats it as sunk will over-price the second programme and under-price the first.
The stitch file is the largest recoverable item: written once at USD 180 and reusable while the shape is unchanged, it is the reason a repeat without a shape change is materially less expensive to start. The compliance screen is second, valid while the material and destination market are unchanged, so a repeat into the same market carries no screening line at all. The sampling fee is third, through the credit against bulk. What is not recoverable is the dyelot commitment on a custom shade and any hardware booked against a component-specific minimum, which is why both should be specified with a repeat in mind rather than with a single drop.
Put your own programme through the model
Send the style, the quantity per colourway, the GSM you have in mind and the destination market. The knit programme team will return a classified cost plan — unit lines, one-off block, freight by mode, duty allowance and the lever that applies at your volume — with sampling at 7 working days and bulk at 30 days. Start on the contact page.
Frequently Asked Questions
What is a bag programme cost plan?
A bag programme cost plan is the total spend model behind a knit bag order, not the unit price. It adds unit cost times quantity to programming, sampling, freight, duty, compliance screening and a return allowance, and it identifies which of those blocks dominates at the planned volume.
Why does a small knit programme cost more per piece?
Because programming, sampling and compliance screening are fixed in absolute terms. At 100 pieces a USD 620 one-off block loads about USD 6.20 onto every unit; at 1,200 pieces the same block loads about USD 0.52, which is why the two cannot be compared on price.
How much is the programming fee on a knit bag?
USD 180 per stitch file, charged once per shape rather than per colourway. A colourway added to an existing file costs nothing in programming, while a new shape carries the full fee again, which makes reuse the first lever in a cost plan. The file also survives into a second season, because it runs unchanged while the silhouette is unchanged.
What does sampling cost and is it refundable?
USD 45 per sample piece, taking 7 working days from a confirmed specification, and it is credited against the first bulk order. A programme ordering three samples therefore recovers USD 135 of the one-off block at confirmation rather than losing it. Sampling is best ordered as a set rather than one at a time, because each additional round restarts the 7 working days rather than extending them.
How much should be allowed above the FOB unit price?
About 18% to 28% at 1,200 pieces, about 21% to 30% at 400 pieces and about 25% to 40% at 100 pieces. The band widens as volume falls because the fixed block spreads across fewer units, not because the bag costs more to make.
Why is freight so high on a knitted bag?
Because a knit is light but bulky and freight is charged on volumetric weight rather than on actual weight. Sea freight at about 21 days costs roughly USD 0.31 per piece, while air at about 5 days costs about five times that figure. Freight mode is the widest single variable inside those bands: sea at about 21 days and air at about 5 days differ by roughly USD 1.24 per piece.
How is duty estimated for a knitted bag?
Duty follows the HS classification of the finished bag in the destination market, and knitted bags do not classify identically across markets. A planning allowance of about 12% of customs value is reasonable, but the importer should confirm the rate before the plan is committed.
What does compliance screening cost?
About USD 350 per material, charged the same whether it covers 100 pieces or 1,200. Shortening the material list is therefore one of the few moves that reduces three lines at once: the purchased item, the assembly operation and the screen. The confirmed figure should then replace the allowance in the model, because duty is applied to value and therefore scales with the whole order.
What return allowance should be carried?
About 2.4% of units shipped is a reasonable planning figure for a bag in general retail. It should sit outside the landed figure as a commercial provision, because a fault that passes inspection at despatch can still generate a return months later. It also stays valid across a repeat while the material and the destination market are unchanged, so it is recoverable rather than spent.
How does AQL 2.5 affect the cost plan?
AQL 2.5 to ISO 2859-1 sets the sample size and the accept and reject numbers for a lot, so it converts defect exposure from an unknown into a known distribution. It bounds the defect side of the allowance but not the commercial return side, which still has to be estimated.
Does a custom colourway change the cost plan?
A custom shade books a dyelot minimum of about 300 kg and adds roughly 10 working days, while a stock shade carries no surcharge and no commitment. A new colourway on an existing shape costs nothing in programming, which is why colour is the most economical form of range extension.
Which lever applies at each order volume?
At 100 pieces the lever is reuse of the stitch file and stock shades. At 400 pieces it is cube, through flat packing and sea mode. At 1,200 pieces it is specification, through GSM, component count and cycle time. The dyelot commitment is also the one part of the one-off block that cannot be recovered in a later season.
Can the one-off block be recovered next season?
Partly. The stitch file is reusable while the shape is unchanged, and the compliance screen stays valid while the material and destination market are unchanged. The dyelot commitment and component-specific hardware minimums are not recoverable. Pulling the wrong lever is the most common planning error: a specification change at 100 pieces saves less than a reused file does, and neither moves the freight line.
How much does GSM move the unit cost?
A move from 320 to 280 g/m² removes about 12% of the yarn line, which is roughly 4% of the unit. It must be checked against the abrasion and tensile thresholds the programme has committed to before it is signed off. A programme planned around one silhouette therefore recovers the largest share of the block, which is why the range plan and the cost plan should be written together.
People Also Ask
What is a realistic cost plan for a knit bag programme?
Unit cost times quantity, plus about USD 620 to USD 1,050 of one-off programming, sampling and screening, plus freight at roughly USD 0.31 per piece by sea and a duty allowance of about 12% of customs value.
Why is my 100-piece quote so much higher per piece?
The fixed block. Programming, sampling and screening do not shrink with quantity, so at 100 pieces they load about USD 6.20 per unit against about USD 0.52 at 1,200 pieces on the same bag.
How do I reduce total programme cost, not just unit cost?
Reuse one stitch file across colourways, take stock shades, shorten the material list, flat pack to cut cube and ship by sea. Each move targets a different block, so the right one depends on your volume.
Should the return allowance be inside the landed cost?
No. Carry it as a separate commercial provision of about 2.4% of units shipped, because it is a rate applied after despatch while landed cost is everything required to get the goods to the destination.
What is the biggest hidden cost in a knit bag programme?
Freight cube. A knitted bag is charged on volumetric weight, so packing method and mode routinely move the total more than any unit-price negotiation does. Price both modes at brief stage and treat the difference as the cost of the schedule risk the programme is carrying.
Sources and further reading
Every figure on this page is either our own programme data or attributed below. Open the originals before you write them into a specification.
- ISO 2859-1 — Sampling procedures for inspection by attributes, Part 1: AQL-indexed sampling schemesISO Defines the AQL 2.5 release that bounds the defect side of the allowance line in the model.
- ISO 12947-2 — Textiles, determination of abrasion resistance, Part 2: determination of specimen breakdownISO The 20,000-rub threshold that any GSM reduction in the cost plan has to be checked against.
- ISO 13934-1 — Textiles, tensile properties of fabrics, Part 1: maximum force using the strip methodISO Referenced for the 600 N figure that constrains how far specification can be reduced.
- Incoterms rulesInternational Chamber of Commerce Defines FOB, CIF and DDP, which determine which freight and duty lines sit inside or outside the unit price.
- REACH legislationEuropean Chemicals Agency The restriction framework behind the per-material screening cost counted outside the unit price.
- OEKO-TEX STANDARD 100OEKO-TEX One of the per-material certificates counted in the compliance line of a programme cost plan.
Plan the Quantity, Then the Specification
A knit bag programme cost plan is a classification exercise before it is a negotiation exercise. Sort every line by whether it moves with quantity, and the levers sort themselves: reuse dominates at low volume, cube dominates in the middle, and specification dominates at the top. Getting that order right is worth more than any single price conversation.
For the volume inputs that drive the model, see knitted bag demand forecasting. For how the fixed block behaves once a programme repeats, see knitted bag margin structure, and for the stock decisions that follow, see knitted bag inventory planning.