This section introduces you to the Bill of Materials (BOM) as it relates to the retail, footwear, and apparel industry.

A BOM lists all the components needed to build a product, including the corresponding prices and quantities.

Decisions regarding the pricing of a product are influenced by the calculation of these component prices and quantities. Pricing decisions also depend on other factors, such as manufacturing costs, shipping and handling fees, duties and quotas, and target markups.

Because several different methods are used to source and cost products, component price totals might or might not feed directly into the cost sheet of a product.