Contract Printing?

Yes. There are price breaks for quantity. You have to calculate the following to insure you don't loose you butt. 1. How many shirts can you print in a day? 2. How many can you produce in a week? This answer has to include the setup and breakdowns. 3. What does it cost you to be in business during that time? If your not at least doubling your cost your going to loose money. I hear myths all the time of people printing for .25 and .35 a shirt for full color imprints. Do the math. Most human beings on a great day of printing cannot maintain a speed of more than 400 pieces an hour unless they have a support team loading ink and checking quality for the printers and even then you might get 450 an hour. (Yes I know people who can run 600 an hour for short busts too but not 8 hours a day 5 days a week) So if you print 400 an hour 7 hours a day thats pretty good. Thats 30 minutes for setup once a day and 30 minutes breakdown once a day you could bill out 2800 impressions a day. If you charge .25 cents a print you only made $700 if you charge 1.00 you made $2800. the bottom line is you need to base your prices on your cost plus desired markup divided by the number of working hours less average downtime. Thats why prices vary so much.

If it cost you 1500 a day in order for you to stay open that means your lowest price on any print could not drop below .54 cents regardless of the number of colors. And to be safe it should be a touch higher to allow for human error. So yes a better price is might be in order for bigger customers just make sure you don't work for a loss.

David nailed it. If you're going to solely contract print, you have to have a firm grasp of all aspects and costing of a screen printing business. It is not for the faint of heart. You have to have an efficient crew, machinery that is well maintaned and a crew that is very good at what they do.

That said, I love contract printing and can't imagine going back to dealing with walk-in customers. Years ago I took on some contract clients to supplement the retail stuff, and even though the margins are much lower, for me and my shop we were more profitable as a contract printer. Simply because we didn't need to pay rent for a showroom, didn't need a sales staff, or a premium locale to put our business in, no phone book ads, etc. You can contract print from just about anywhere, although I suggest being within an hour of at least on major distributor. These days I am solely a contract printer and built a shop on my property..so there is no commute to work unless you count walking up the driveway. I dont need to pay for internet service at home and work, same with phone service, so costs have been cut by more than half. I upgraded all my equipment when we went to contract printing because you have to be fast to make a profit. But if you just like to print, and you don't like the headache of having soccer moms telling you what to do then go for it.

There is some really good advice from everybody. Here's one more thing. I do both contract and retail printing. If you choose to do contract printing, get multiple customers. If you are relying on one big customer your asking for trouble. He will own you. As far as price, if one burger joint is selling burgers for $1.00 and another is selling the same basic burger for half that price, one of the burger joints is going out of business. Either you have to be profitable at the lower price or wait for the competition to fail. I can print for 35 cents a shirt if the volume is high enough. That would half to be well into the thousands for each order. If the customer is suppling a lot of work but the orders average about 500 per order, good luck. We have a spread sheet that we price from. The lowest price is 45 cents a print on orders larger than 10,000. My biggest contract customer averages around 700 shirts per order. My average price to him is around 70 cents per print. Don't let the customer control you! If you get to deep with a contract customer, he will have all the control.

Good luck

Mike is absolutely right. We also offer both custom and contract, having offered custom only first. It is also very important to transition into the contract world slowly and carefully because it is a completely different ball game. One of my big things these days is that we really have to market to the appropriate market (by volume) for our price structure and the volume we can handle. We're a one auto one manual shop, so there is no way we can compete on price, or handle 50000 piece orders at our size (without interrupting or displacing our many smaller contract or custom customers), those jobs are for the shops with 5 autos, lots of employees, etc. Those shops can afford and be profitable printing for "50 cents per location" (something I hear a lot), we can't. And yeah, as Mike said, you must diversify your customer base in both contract and custom, but since contract is way more competitive on price, it's better (for us at least at our size) to have 50 1000 piece orders than it would be for us to have 1 50000 piece order.

Good thread, I like this one.