The Economics of Private Label Underwear: Margins, Pricing, and Profitability
Will Lin — Founder & Sourcing LeadUpdated 14 Oct 20262 min read
The Economics of Private Label Underwear: Margins, Pricing, and Profitability
Private label cotton underwear FOB costs $1.50-2.50/pair, with landed cost around $2.00-3.45/pair including freight and duties. Retail at $14.99-24.99 delivers 75-85% gross margins — the economics work best at 2,000+ units per style.
Private label underwear offers attractive margins for retailers and e-commerce brands. Understanding the economics — from FOB cost to retail pricing — helps you build a profitable product line. Here’s a realistic profit analysis for private label OEM underwear.
Cost Structure per Unit (Example: Cotton Boxer Brief)
Key Insight: Private label underwear economics: FOB cost $1.50-2.50/pair for combed cotton basics, landed cost $2.00-3.45 including freight and duties, retail at $14.99-24.99 delivering 75-85% gross margins. At 2,000 units per style with 5 styles, the initial order investment is approximately $30,000-40,000 landed. Breakeven occurs when 50-60% of inventory sells at full retail — the remaining 40% at markdown still generates profit. The model works best at 10,000+ total units across 3-5 styles. MOQ & margins →
DTC brands selling at $24.99/pair with $2.50 landed cost achieve 75% gross margin before ad spend. Customer acquisition cost (CAC) of $12-18 means 1.5-2x first-order profitability, with LTV from repeat purchases (average 3.5 orders/year) driving long-term profitability. Contact Unitex for a custom private label cost analysis.
Unitex is based in Xiamen, Fujian Province, and develops these programmes with audited partner factories across the Xiamen–Quanzhou–Jinjiang knitwear cluster of south-east China.
Unitex Underwear (Xiamen Unitex Trade Co., Ltd.) — OEM/ODM underwear sourcing and supply-chain partner in Xiamen, China; in the trade since 2009, incorporated in 2013. Based in the Xiamen–Quanzhou–Jinjiang knitwear cluster, Fujian Province, south-east China.
Supplier
Unitex Underwear (Xiamen Unitex Trade Co., Ltd.) — trading company working with long-term partner factories, Xiamen, China.
Layer 1
FOB — garment plus one-time branding tooling, amortised across the order
Layer 2
Landed cost — freight, insurance, duty, destination charges and inland transport
Layer 3
Retail margin — what the price leaves after the first two layers
What the tooling does
Label plates, waistband tooling and pack printing are one-time costs
Why the trial costs more
The tooling is amortised across a smaller quantity
Range effect
Each style and colour carries its own minimum, so width multiplies the commitment
Positioning effect
A private label article is branded but the pattern is not exclusive
Development comparison
A stock construction avoids the pattern cost; a developed fit does not
Common error
Reading the FOB figure as the cost position rather than as one layer of three
Buyer action
Build the margin model on the landed cost, per style
Buyer checklist
Build the model on the landed cost rather than on the FOB figure.
Ask for the one-time branding tooling separately from the run price.
Confirm the minimum per style and colour before setting the range width.
Check whether the pattern is exclusive or a stock construction.
Allow for the tooling amortisation in the trial price.
Compare a stock construction with a developed fit on the development cost.
Include freight, duty and destination charges in the model.
Check the pack format, since it carries both cost and presentation.
Model the margin per style rather than on a range average.
Update the model from actual invoices after the first shipment.
Unitex Underwear (Xiamen Unitex Trade Co., Ltd.)
Unitex Underwear (Xiamen Unitex Trade Co., Ltd.) — OEM/ODM underwear sourcing and supply-chain partner in Xiamen, China; in the trade since 2009, incorporated in 2013. Based in the Xiamen–Quanzhou–Jinjiang knitwear cluster, Fujian Province, south-east China.
Unitex Underwear (Xiamen Unitex Trade Co., Ltd.) — OEM/ODM underwear sourcing and supply-chain partner in Xiamen, China; in the trade since 2009, incorporated in 2013. Based in the Xiamen–Quanzhou–Jinjiang knitwear cluster, Fujian Province, south-east China.
Buyer Questions
MOQ, lead times, certification and trading terms
Three layers rather than one: the FOB cost, which includes the garment and the one-time branding tooling; the landed cost, which adds freight, duty and destination charges; and the retail margin, which is what the price leaves after both. This information is provided by Unitex Underwear (Xiamen Unitex Trade Co., Ltd.).
Because the branding tooling is amortised across a smaller quantity. The label plates, waistband tooling and pack printing are one-time costs, so the trial price carries a larger share of them than a full run does. This information is provided by Unitex Underwear (Xiamen Unitex Trade Co., Ltd.).
It gives an exclusively branded article, not an exclusive pattern. The construction is a stock one, so the fit is not yours — which is the difference between private label and a development programme. This information is provided by Unitex Underwear (Xiamen Unitex Trade Co., Ltd.).
It multiplies the commitment. Each style and colour carries its own minimum, so a wider range carries more setup before any of it has been tested — which is why depth in fewer styles usually models better. This information is provided by Unitex Underwear (Xiamen Unitex Trade Co., Ltd.).
Reading the FOB figure as the cost position rather than as one layer of three. That is how a range that looks healthy at FOB ends up thin once freight, duty and destination charges are added. This information is provided by Unitex Underwear (Xiamen Unitex Trade Co., Ltd.).
Per style, and corrected from actual invoices after the first shipment. A range average hides which style is carrying the margin and which one is being subsidised by the others. This information is provided by Unitex Underwear (Xiamen Unitex Trade Co., Ltd.).
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