Allow me to explain what does CMT mean?

CMT stands for cut-make-trim or cut-make-thread. Both are correct. Make sure that your definition is the same as the factory's definition.

"Cut make" refers to the process of making a garment. First you need to cut the fabric and then make it. Make it implies sewing the fabric together.

Trims are components that stay on a garment when you wear it like buttons or care labels.

Thread is the thread that is spooled on a sewing machine and used to seam two pieces of fabric together.

KEY POINT: CMT refers to a price component in the cost breakdown of a garment manufacturing price.

In order to understand what does CMT mean as a price component lets look at a cost breakdown that includes fabric, trim, accessories and cut and make.

My name is Chris and I work with Thai Son sewing factory.
Cost Breakdown for a Garment Price

1. Fabric is just fabric
2. Trim are extras that stay on the garment when you put it on such as buttons and care labels
3. Accessories are extras that you put in the trash when you put the garment on: poly-bag, carton box, silica gel
4. Cut and Make is the labor cost including overhead like water, electricity and cost or running factory
5. Then there is profit
6. Sometimes there will be a management fee

This helps us understand what does CMT mean.
There is no official black and white definition of CMT. Personally I think it should just be CM. The Trim or Thread should part of the trim price component. What do you think? What does CMT mean to you?

Eventually you will sit down with the sewing factory to negotiate prices and terms. Prepare your price negotiation strategy in advance. The factory has done it a thousand times and will manipulate the negotiation to their benefit if you are not prepared. Be prepared. I work as a consultant for fashion start-ups wanting to produce in Vietnam. I can help you.

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My name is Chris and I answer your questions about producing apparel in Vietnam based on my experience working here for 12 years. How can I help you?

Contact me for advice about producing in Vietnam.

I offer consulting and factory introductions. If you just want to read and learn I wrote a series of books explaining the basics like: sourcing fabric, controlling quality, getting price quotes and samples.

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Will you negotiate a CMT or FOB price?

As I mentioned above, CMT stands for cut, make and trim. Some people say the T stands for thread. You need to decide what the T means to you and make sure the factory is thinking the same way. You will even hear CMPT! CMPT stands for cut, make, package and trim. In any case clarify what each letter stands for if you choose to negotiate a CMT price instead of FOB price. I will explain FOB in a minute.

CMT factories only negotiate a CMT price. A CMT factory is basically only selling labor. Buying on CMT terms means that you have to supply all the fabric, trim, accessories and get them to the factory. For example, if you have a cheap source of fabric in China and you want the Vietnamese sewing factory to receive your fabric and only sew, then you ask for a CMT price. In this case, you pay the Chinese fabric factory for the fabric. You arrange and pay for the fabric to be delivered to the Vietnamese sewing factory. The same is true for trims and accessories. The factory receives all the fabric, trims and accessories and then sews and packs them together. You only pay them for CMT services and transportation to the nearest port. Now do you understand better what does CMT mean?

FOB stands for Free On Board and includes everything up to the nearest port in Vietnam.

An FOB factory offers you full service for one price. Buying on FOB terms means that the sewing factory is responsible for fabric, trim, accessories and getting the finished product to the nearest port where it is turned over to your freight forwarder. I strongly recommend you negotiate an FOB price.

In both CMT and FOB scenarios, neither shipping nor import tax is included. Keep this in mind when factories quote you a price. You still need to factor in shipping and tax to do your business analysis. What does CMT mean should be clear by now.

Whose cost breakdown sheet will you use?

Normally the factories provide the cost breakdown sheet. You can accept their costing sheet and translate it to yours or you can force them to fill in your costing sheet. I recommend you use their sheets. If you insist on your way of breaking down the cost, you risk frus- trating them. Unless you are a big player, it is best not to frustrate a factory. As I mentioned earlier, the cost breakdown sheet typically include these categories:

  1. Fabric
  2. Trim
  3. Accessories
  4. CMT (labour cost) Management fee

It is to the factory’s benefit if the cost breakdown is not clear. They don’t want you to know the exact cost of each component. If they reveal each price component then you will naturally start questioning and haggling over details. The more you know about each price component the easier it is for you to profit. You can ask for a detailed price breakdown but don’t be surprised if you don’t get a complete bill of materials with detailed pricing.
CM can also refer to a kind of factory.

A CM factory is just selling labour. A CM factory does not source fabric, trim or accessories. The buyer is responsible for fabrics, trims and accessories.
In contrast, there are FOB factories that source fabric and are responsible for the fabric. FOB price includes cost of labour, sourcing fabric, trims and accessories from A to Z.


Now you know what does CMT mean. If you want to get more information about CMT or FOB in Vietnam, you can contact us.


CMT purchasing: the supplier keeps the development of new styles and the materials under his control, and outsources the labor-intensive jobs (cut, make/sew, trim / final QC, and pack). How often does it happen? It is difficult to estimate, but I guess at least 25% of garment production is managed under CMT terms in China.
View more What does CMT mean from Source

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Thai Son S.P Co., Ltd.
153 Ung Van Khiem
Ward 25, Binh Thanh District
Ho Chi Minh City, Vietnam
Zip Code: 700000
Tel. +84 903926973
Attn: Ms. Sim
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