T-Shirt Forums banner

1 - 7 of 7 Posts

·
Registered
Joined
·
14 Posts
Discussion Starter #1
Hello,

New guy here starting my own apparel company... Will enter into the market with mens and womens t-shirts on sustainable fibers...

My question is, what is the "ideal" profit margin for selling a t-shirt? Basically I'm trying to decide where I should price my t-shirts, and still remain in a competetive market, yet still turn a profit..

In other words, after the price of the blanks, the printing, tagging, and shipping, what $$$ amount should I look to turn on each shirt???

Yes the volume of t-shirts ordered will be in the 100+ range, to keep costs lower on that front. I'm shopping screen printers now looking for the best price, and then will do tests for the best "work."

Any business venture is intended to profit, but where should the margin per tee fall to make it in this business?

Thanks in advance all!!!

JP
 

·
Registered
Joined
·
6,680 Posts
Re: Profit Margin???

"Ideal" is somewhat subjective. Some business have low overhead and require modest margins to be sustainable. While others have more overhead expenses and therefore require higher margins.

A typical pricing structure would be doubling the production costs to get the wholesale price; and then doubling the wholesale price to get the retail price. So for example, if the production costs are $5, the wholesale price would be $10 and the retail price would be $20.

If your business model doesn't include selling to retailers (meaning, you are selling direct to consumer), then you may have more room to work with. If your costs are $5, you can reasonably price your shirts at $20 retail which is an excellent profit margin. You may decide to price your shirts at $15 to make them more attractive to consumers, and still have a nice margin.

You may also want to isolate who your competitors are and see what their prices are.
 

·
Registered
Joined
·
14 Posts
Discussion Starter #3
Re: Profit Margin???

Thanks a lot for your input...

It appears that you work with bamboo as well...

My intentions are to place myself in a market that sells t-shirts around the $25-$30 range...

Roughly looking at the production costs right now, the bamboo blanks themselves are not the cheapest, same can be said for hemp. If my shirts run me anywhere from $10-15$ for "FULL" production, is a $10 profit margin acceptable per t?

I also fully intend to market my brand to retailers, as well as sell direct to the consumer... I assume retailers will look for the shirts at the best possible price. Can anyone offer insight to this? If I intend to sell my shirts direct to consumer for $25, where will my price need to be direct to retail stores? Or is that a moot point? In my mind, it would seem like the retailers are looking for somewhat of a "wholesale" price on the shirts, and then they turn around and sell them at my target price, and make their own profit...

I guess I'm looking for advice on both. Where should the profit margin lie when dealing with retailers? The hope is that my brand is accepted by retailers, allowing me to produce larger quantities of shirts, keeping my costs down!!!

Thanks again!

JP
 

·
Registered
Joined
·
6,680 Posts
Re: Profit Margin???

Based on current costs of bamboo, I'd say $25-30 is an appropriate range. Some markets can go higher, but I think that's mostly based on the reputation of the retailer.

$10-15 production costs may be a little high, but that will get better with higher volume. $10 profit margins are ok, but it really depends on your overhead. What monthly costs do you have? What marketing costs do you have planned? What volume can you reasonably expect to sell per month? Once you know that, you will have an idea if $10 per shirt is enough profit.

If you're selling direct to consumer at $25, retailers will expect your wholesale price to be $12.50. That obviously won't work for you. Based on your production cost range, you really need to wholesale between $20-30, which will force the retailer to push the retail price to $40-60 at least. It's hard to imagine any retailer taking that deal when you are selling them at $25. You can take a lower profit margin when dealing with retailers, but you need to find the price you are comfortable with. Either way, your own retail price needs to be consistent with your suggested retail price for retailers.
 

·
Registered
Joined
·
14 Posts
Discussion Starter #5
Re: Profit Margin???

Very, VERY useful info!! Thanks so much!!! The issue will be the popularity. We all "hope" and "dream" that our brand will be accepted by the masses. I'm going to do my best to be accepted by the masses with sustainable fibers... I see trouble ahead when approaching retailers. Getting consumers to switch from regular cotton to bamboo or hemp, or even organic cotton shouldn't be difficult, as long as they are not doubling the emptiness of their wallet when they see a shirt that is comparable to something they like...

I don't intend to spend oodles of dollars on the marketing until there is a grand acceptance and true profits from the brand. Most marketing will be done by friends, family, and any professionals I know personally that are willing to sport this brand...

Thanks again!
 

·
Registered
Joined
·
6,680 Posts
Re: Profit Margin???

The issue will be the popularity. We all "hope" and "dream" that our brand will be accepted by the masses. I'm going to do my best to be accepted by the masses with sustainable fibers... I see trouble ahead when approaching retailers. Getting consumers to switch from regular cotton to bamboo or hemp, or even organic cotton shouldn't be difficult, as long as they are not doubling the emptiness of their wallet when they see a shirt that is comparable to something they like...
With my bamboo brands, I'm finding that different regions and markets are more apt to accept organic and natural products. The area I live in is not exactly a "green" area. But there are a lot of local companies launching initiatives to help make people aware. And I am actually finding that local consumers are more educated about bamboo than I originally anticipated. Whole Foods just opened a location nearby, so that's definitely a big help. It is crowded all the time, so people are responding well to organic and natural foods, along with the extra price tag involved. It may take some more time, but the same will happen with clothing. And people that are socially responsible will start buying more bamboo clothing, even with a higher retail price. I think consumers will start to show a demand for bamboo, and it turn, retailers will want to start carrying it.
 

·
Registered
Joined
·
14 Posts
Discussion Starter #7
Re: Profit Margin???

With my bamboo brands, I'm finding that different regions and markets are more apt to accept organic and natural products. The area I live in is not exactly a "green" area. But there are a lot of local companies launching initiatives to help make people aware. And I am actually finding that local consumers are more educated about bamboo than I originally anticipated. Whole Foods just opened a location nearby, so that's definitely a big help. It is crowded all the time, so people are responding well to organic and natural foods, along with the extra price tag involved. It may take some more time, but the same will happen with clothing. And people that are socially responsible will start buying more bamboo clothing, even with a higher retail price. I think consumers will start to show a demand for bamboo, and it turn, retailers will want to start carrying it.

That's exactly where my head is at. Not only am I myself becoming more accepting and willing to go the extra pennies for organic, but I'm starting to notice that others are becoming more and more conscious of it as well. And it's only getting better day by day... I hope to report back in about 6 months with a success story :)
 
1 - 7 of 7 Posts
Top