When you are sizing down a costume for a child, have them try on the costume for fitting inside out and with the shoes (if any) they will be wearing with the costume. After they have the costume on (still inside out) mark where the seams for the intake will be. For some of the seams I have actually used hook and loop tape in the garment in order to reuse the costume for an older child by using it in place of a sewn seam.
