Terms and Definitions of Apparel Merchandising

Apparel Merchandising Terms and Definitions

There is so many commercial and costing terminology used in the apparel merchandising process. Those terms and definitions are important to handle export garments manufacturing from getting orders to taking payments. These are all terminology related to factory merchandising, retail merchandising, commercial, and shipping departments. It is necessary to know all these things because all are directly involved with the garments export and import business.

Terms and Definitions of Apparel Merchandising

Apparel Merchandising Terms and Definitions


This refers to the manufacturing cost and this term means “Cost of Manufacturing” or “Cut and Make”. The buyer supplies or nominates a supplier for all the materials to the manufacturer. CM is the most popular transaction mode in the garments manufacturing business.


The term means “Cost of manufacturing with trims” or “Cut, Make and trim”. This term means a buyer will provide manufacturing and trims costs. Fabrics and other materials will give buyer in this case.

EXW – EX Works/ Ex-factory (named place of delivery)

The EXW and Ex-fty are the same shipping term, which means when the garments maker delivers goods from their premises, i.e., factory, warehouse, etc. He has the minimum responsibility and does not have to provide minimum documentation unless upon specific request. The buyer bears all costs and risks involved upon delivery of the goods until the desired destination.

CIF – Cost Insurance and Freight

In this case, the Garments maker ship the goods for export and pays the costs of moving the goods to the port of destination. The Garments maker, however, purchases the cargo insurance.

FOB – Free On Board

The Garments maker delivers the goods on board the ship and clears the goods for export. From that point, the Buyer bears all costs and risks of loss or damage. The seller’s responsibility is to deliver goods to the port.

CFR – Cost and Freight

The Garments maker clears the goods for export and pays the costs of moving the goods to the destination. In this case, the garments seller bears product and freight costs till the buyer’s destination. The Buyer bears all risks of loss or damage.

Commercial Invoice (CI)

 A commercial invoice (CI) is a business commercial document that includes the sale of goods or services between two parties, unit price, total price, and by which the seller informs the buyer of the amount to be paid for the goods. A CI will have the price of a whole lot, the code numbers of different sizes, and the price against every SKU.

Certificate of Origin

The certificate of origin must be issued by the original manufacturer (or the exporting firm), and must include the name of the vessel (airline) and the date of sailing, name(s), nationality, the full street address of the manufacturer(s) and others information of all items to be shipped. 

Bill of Lading

A bill of lading (sometimes abbreviated as B/L or BOL) is one of the most important documents in the shipping process. A completed BL legally shows that the carrier has received the freight as described and is obligated to deliver that freight in good condition to the consignee.

Steamship Certificate

This certificate should be issued by the steamship (or airlines) company and contains information about the name, nationality, owner of the vessel (or plane), names of ports (airports) including port (airport) of loading and port (airport) of discharge.

Insurance Certificate

This certificate must contain the actual amount of insurance, description, and value of insured goods, name of the vessel, port of loading and port of discharge, and name and address of the beneficiary. 

Packing List

This is a document that indicates the contents of each individual/package in the container. The packing list includes the cubic measurement (CBM) of the cartons/Package, the weight, the number of cartons/Packages, and the breakdown of the goods by size /color/quantity. This document is prepared by the seller and the buyer can specify which information should be included.

Terms and Definitions of Apparel Merchandising

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