A £25 FOB jumper does not become a £95 RRP product automatically — there are costs between the factory and the consumer, and margins to protect at each stage. Here is how the pricing stack works for UK knitwear brands.
Margin planning is the first commercial discipline a knitwear brand must get right — and it is the one most often done wrong at the start. Brands either price from the market down ("what can I charge for this?") without knowing their cost structure, or price from the cost up without understanding what margin they need to sustain the business. The right approach is to understand both — what your true landed cost is, what the market will bear, and what multipliers you need at each stage of the distribution chain. This guide covers the full UK knitwear pricing stack for both DTC and wholesale.
| Stage | What it is | Typical multiplier from previous stage | Who sets it |
|---|---|---|---|
| FOB price | Ex-factory garment cost | — | Factory |
| Landed cost | FOB + freight + duty + brokerage | ×1.10–1.20 on FOB | Your freight/customs costs |
| Total cost | Landed + ops (photography, samples, storage, finance) | ×1.05–1.15 on landed | Your overhead allocation |
| Wholesale price | Your sell price to buyers/retailers | ×2.0–2.5 on total cost | You |
| RRP / retail price | Consumer price at retail | ×2.0–2.5 on wholesale (or ×4–6 on total cost for DTC) | Retailer (wholesale) or you (DTC) |
FOB: £22.00
Landed cost: £22.00 × 1.14 = £25.08 (freight/duty/brokerage)
Total cost: £25.08 × 1.08 = £27.09 (samples, photography, storage allocation)
DTC selling price: £27.09 × 4.5 = £121.90 → RRP £120
Gross margin: (£120 − £27.09) / £120 = 77%
This looks healthy, but from the 77% gross margin you must fund marketing, returns, payment processing (2–3%), platform fees, and overhead. Net margin for DTC knitwear brands is typically 15–25%.
FOB: £22.00
Landed cost: £25.08
Total cost: £27.09
Wholesale price: £27.09 × 2.2 = £59.60 → wholesale £60
Retailer RRP: £60 × 2.3 = £138 → RRP £135–£140
Your gross margin: (£60 − £27.09) / £60 = 55%
From 55% gross margin you fund sales agent commission (10–15%), trade show costs, samples, credit terms and overhead. Net margin for wholesale knitwear brands is typically 10–20%.
FOB: £48.00
Landed cost: £48.00 × 1.13 = £54.24
Total cost: £54.24 × 1.10 = £59.66
DTC selling price: £59.66 × 4.0 = £238.64 → RRP £240
Gross margin: (£240 − £59.66) / £240 = 75%
Premium product allows a slightly lower multiplier because the absolute margin per unit (£180) is higher. Marketing spend can be higher in absolute terms while maintaining viable net margin.
FOB: £22.00
Total cost including markdown risk: £22.00 × 1.35 = £29.70 (higher allowance for first-order risk, including potential markdown on slow movers)
Target DTC RRP: £29.70 × 4.5 = £133.65 → RRP £130–£140
First-order brands should build in a higher contingency in their cost calculation — there will be more unsold stock, more returns, and higher per-unit overhead than a brand with established demand. A higher multiplier protects you if the season underperforms.
| Model | Minimum gross margin | Why |
|---|---|---|
| DTC (own website/Shopify) | 70%+ | Marketing (20–40% of revenue), returns (10–20%), ops, platform fees all come from gross margin |
| DTC (via ASOS/Next/Zalando marketplace) | 65%+ | Platform commission 15–25%; returns policy often more generous (more returns) |
| Wholesale (independent boutiques) | 50%+ | Lower ops, but credit terms (60–90 days) = working capital cost; sales agent commission |
| Wholesale (department stores) | 55%+ | Compliance cost (SMETA, RSL, PLI) is real; longer payment terms; lower volume leverage |
The most common error: calculating the multiplier from FOB rather than total landed cost. If your FOB is £22 and you apply a 4× multiplier from FOB, you get an RRP of £88. But your actual total cost is closer to £27, meaning your real gross margin at £88 RRP is (£88 − £27) / £88 = 69% — which sounds viable, but leaves almost nothing after marketing and returns. Always use total landed cost as your multiplier base.
First orders almost always involve 2–4 rounds of sampling, each costing £80–£300 per sample garment. On a 250-unit first order, £600 in sampling costs adds £2.40 to your per-unit cost. That is worth accounting for. On an ongoing basis, amortise development sample costs across your season's units — treat it as a fixed overhead that scales down as volumes grow.
UK e-commerce fashion return rates run at 25–40% for knitwear — consumers buy multiple sizes, try at home, return what doesn't fit. Each returned unit has a cost: return postage (often paid by the brand), refolding and rebagging labour at the 3PL, and the risk that some returns come back in unsellable condition. Provision 15–20% of units as effectively sold at zero margin when building your financial model for a new DTC knitwear range.
If you order 500 units and sell 350 at full price, the remaining 150 may need to be sold at 30–50% markdown to clear. This markdown loss is real and must be factored into your total cost calculation — not as a separate problem to solve if it happens, but as a built-in provision. Budget for 20% of units sold below cost as a first-season baseline. If your sell-through is better, the provision becomes margin upside. If it is worse, you are not surprised.
We work backwards from your target UK retail price to give you a FOB range that works. Tell us what you need to sell a jumper for, what your model is (DTC or wholesale), and what your volume looks like — and we'll tell you whether that is achievable at the quality level you need, and what compromises (if any) would be required.
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