What is your average profit margin per shirt? [t-shirt printers]
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What is your average profit margin per shirt? [t-shirt printers]
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Re: What is your average profit margin per shirt?
Some basic Biz 101 here.
Charge the highest price you can possibly get. The price you can get reflects the value of your product to your customer.
Making money is not immoral. You are not ripping off your customer, you are expecting to be paid for the value of the product you deliver.
Taking higher margin jobs will allow you to do less work for the same or better profit.
You can start high and lower your price but it is much harder to raise it once you start negotiations.
A dollar is a dollar on the bottom line.
In our neck of the woods, garment decorators are so thick you can throw a rock in any direction and hit 5 of them. Even with that, there is so much work out there that you can pretty much pick your price that you want to sell at and you will get customers.
I have a different approach than most. We price each job based on the value of the job to the customer. Some jobs are done very close to cost. Some jobs are done at a 1000% margin over cost. (This typically happens when the customer supplies garments. Our material costs for embroidery are pretty low so charging $25 to sew a design that takes 50c of material cost is a pretty good margin)
Overall, this business commands a net of 35%. Anything less than that and you should re-examine you pricing or find something else to do, more than that and I would say you are doing great.
So, here is an example:
100 shirts at $1.50 raw cost including shipping to you = 150.00 so you charge $300. You have a job to print one color on one location. The cost is $1 for the materials so add $2/pc for another $200. You are now at $5 per unit to sell for 100 shirts, that is one hellofa deal. What do you do if the guy wants 1000 shirts? You haven't much room to move down. I would sell that job for $6-$7/pc with personal delivery (I take the product to the customer for presentation if he is local).
One thing we also do is add 5-10% for waste depending on the size of the job. For 100 units I would normally buy 2 of each size shirt extra just in case I screwed a few up. We charge for that also. So our 100 shirt order might be 110 at $1.50 so our cost is now $165 so we charge $330 for the shirts.
So $770 for a material cost of $275 gives a net of $495. Now you have your variable costs such as utilities, trash, rent, misc supplies, waste, etc. that you need to spread across all jobs so your net is a little less.
So, with this pricing we are at a raw cost of $2.75/pc and selling for $7.70 each for a net of about 2.8 times raw cost.
The lesson is that if you just double your cost and charge that you are leaving money on the table, not getting what you should get, and not giving yourself room to get the order bigger by lowering your price if the customer ups the quantity.
I would also add that you should charge your retail customers more that your wholesale customers.
Finally, there is a lot of talk about how much you want to make per hour. This really shouldn't concern you until you are at 100% capacity. At that time, you should look at the higher $/hr jobs, but until then look at the last bullet point above. Unless you are going to go out and do sales with that time you should consider taking all jobs that make money, even if it is only a single dollar.
Last edited by binki; February 29th, 2008 at 06:12 AM.
There is also GROSS profit and NET profit. GROSS PROFIT is basically what it costs to produce the shirt minus what you get paid for it. NET profit is after all other expenses to produce the shirt are factored in, overhead, cost of labor, etc. At Retail, your basic price per shirt should be the same regardless of venue sold at.
We sell our retail shirts in various venues with costs of those venues varying widely, as well as, on our website. My GROSS profit on each shirt is the same, however, my NET profit varys depending on each venue.
Wholesale and custom orders will vary depending on complexity of design, number and style of garments, but still have some structure so customers who share information see continuity in how you charge.
Charge the highest price you can possibly get. The price you can get reflects the value of your product to your customer.
Making money is not immoral. You are not ripping off your customer, you are expecting to be paid for the value of the product you deliver.
Taking higher margin jobs will allow you to do less work for the same or better profit.
You can start high and lower your price but it is much harder to raise it once you start negotiations.
A dollar is a dollar on the bottom line.
The lesson is that if you just double your cost and charge that you are leaving money on the table, not getting what you should get, and not giving yourself room to get the order bigger by lowering your price if the customer ups the quantity.
I would also add that you should charge your retail customers more that your wholesale customers.
I agree with every portion of the above left in quotes.
I add wholesale pricing is double your material costs.
Retail pricing is double the wholesale price. Then try to get what your market will bear, up from there. You need to turn profits to grow. Decide where you want to be in five years, and work on a plan to get there.
Last edited by Girlzndollz; March 4th, 2008 at 08:10 PM.
Something to factor in if you plan to create stock designs is your design time. AND as one poster mentioned above, absolutely factor in your design time for custom work. To be fair to yourself, set a $ / hour your are worth for your design time, sitting in Photoshop, Corel or what have you. Do not sell yourself short. I factor in $45 per hour for graphics work but I am not sure what the standard design rate is. Perhaps a designer more in the know will have a better figure. I am more familiar with web design and development world where I charge $75 per hour and that is a pretty cheap rate since I do database development. Electricity, ink, and other miscellaneous materials should also be included. Great input though I love the insight more experienced producers have!
Also don't forget to factor in rather it is a one sided or two sided print. I sometimes get caught giving a price for a one sided print job and and then find out they wanted a 2 sided print and can't go up. It usually go like this.....
Customer "How much for a shirt"
Me "$XX.xx"
Customer "Great, this is what I want on front and this is what I want on back"
Me..... Grumbling tomyself.
Get the picture? It is easier to do than you think at least for me. Especially when in a hurry or a lot of things are happening at once. Hope this helps.
Also don't forget to factor in rather it is a one sided or two sided print. I sometimes get caught giving a price for a one sided print job and and then find out they wanted a 2 sided print and can't go up. It usually go like this.....
Customer "How much for a shirt"
Me "$XX.xx"
Customer "Great, this is what I want on front and this is what I want on back"
Me..... Grumbling tomyself.
Get the picture? It is easier to do than you think at least for me. Especially when in a hurry or a lot of things are happening at once. Hope this helps.
Very true, I make sure to tell them up front this price XX.XX is for the front only, if your wanting front and back this will be the price XX.XX. Usually I do not get alot of grumbling but it saves headaches in the long run.
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Re: What is your average profit margin per shirt?
Quote:
Originally Posted by moonlightdrive
Hahahaha that killed me
I did a yellow pages search for screen printers/embroiderers within a 1 mile radius of several addresses around here and never found less than 25. Some business parks have 3 or 4 in the same park. Add sign/banner shops to that and you can't hardly make a move without bumping into one of them.
I did a yellow pages search for screen printers/embroiderers within a 1 mile radius of several addresses around here and never found less than 25. Some business parks have 3 or 4 in the same park. Add sign/banner shops to that and you can't hardly make a move without bumping into one of them.
Wow, that's pretty bad. I did a search after I read this and got 9 screen printers and 4 embroiderers. Most of what they showed me was internet businesses from indiana and milwakee. lol Of course, my 50,000 pop is far smaller than yours.
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Hard labor kills, make t-shirts instead.
This is a great thread.
I notice this geared for a shop doing the printing. What about someone who is farming the work out? Broker, embroider, sign shop ect.
Why do you figure mark up from your abolsolute best cost for a shirt. Example case price for a Gilden 200 is 1.50 but the pc price is 2.00. Since not everyone can buy case price shouldn't they M/U from the pc price? The print cost may cost a printer $1.00 for a printer but the cost for a broker will be higher. Any sudgestions for someone not doing the printing?
I am
Ask your supplier for case price, sometimes that's all it takes. I just got case price on 8 beefy-t's for my latest test. Can't do it online, have to call in the order and ask for case price with alphashirts.com.
I don't outsource, sorry, but I imagine a similar business model will be at hand, just don't undersell yourself.
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Re: What is your average profit margin per shirt? 
Re: What is your average profit margin per shirt? 
