[Cotton Theory]

Hey folks--

How does one go about calculating the wholesale price to offer a potential retailer/vendor?

What's the industry standard mark-up on a tee shirt for me as a company vs. the wholesale price I would market to a retailer?


If my total t-shirt cost is $7.00/piece (t-shirt/screenprint/label/hangtag), what would you all recommend in terms of a retail price? Wholesale price?


Also, what are typical or standard wholesale terms that I should offer to a retailer?

 

[Ken Styles]

hhmm Thats a good question!

I think I would first double my total cost for a shirt.

So lets start @ $14 each would be the cost for the first 25 pieces.
Then take off $1 for every 25 ordered.
50 shirts = $13 each
75 shirts = $12 each
100 Shirts =$11 each...etc
Then when it gets down to $8 don't go any lower.

So if someone orders 200-300 shirts..you'll still make $1 per shirt?

I don't know....??

Someone might have a better formula

 

[lawaughn]

Most people say the wholesale price is 50% of the retail price.

 

[Vtec44]

Most people say the wholesale price is 50% of the retail price.

This is a good formula, although I do make exceptions.

 

[monkeylantern]

Unless you're selling to Walmart, in which case it's 10% of retail, your first born, and your innocence.

Some major department store tend to want 40% of retail, and some high end boutiques are happy with closer to 80% of your RRP, because they'll sell them for $60.

But 50% as a benchmark isn't far off.

 

[Solmu]

So lets start @ $14 each would be the cost for the first 25 pieces.
Then take off $1 for every 25 ordered.
50 shirts = $13 each
75 shirts = $12 each
100 Shirts =$11 each...etc
Then when it gets down to $8 don't go any lower.

So if someone orders 200-300 shirts..you'll still make $1 per shirt?

$14 = $7 profit x 25 pieces = $175 profit
$13 = $6 profit x 50 pieces = $300 profit
$12 = $5 profit x 75 pieces = $375 profit
$11 = $4 profit x 100 pieces = $400 profit
$10 = $3 profit x 125 pieces = $375 profit
$9 = $2 profit x 150 pieces = $300 profit
$8 = $1 profit x 175 pieces = $175 profit


...this is why it's always important to run the numbers. From $14 to $13 it seems great, at $13 to $12 it's starting to look pretty dubious, and from $12 to $11 onward things start getting increasingly painful to watch, as obviously you shouldn't be doing over twice the work for less than half the profit.

A sliding scale is a good idea, but you have to be very careful how you set them up.

 

[Vtec44]

A dollar off every 25 pieces is a little to extreme?


Here's the calculation if you just go by 50 cents off every 25 pieces

$14 = $7 profit x 25 pieces = $175 profit
$13.5 = $6.5 profit x 50 pieces = $325 profit
$13 = $6 profit x 75 pieces = $450 profit
$12.5 = $5.5 profit x 100 pieces = $550 profit
$12 = $5 profit x 125 pieces = $625 profit
$11.5 = $4.5 profit x 150 pieces = $675 profit
$11 = $4 profit x 175 pieces = $700 profit


If you're going by a scale, you can set a specific number to qualify as "wholesale" then additional discount if it goes pass a certain additional pieces. For example, 50+ pieces will qualify for wholesale price at $13, then 25 or 50 cents off every 100 additional pieces or something.

 

[Cotton Theory]

Thanks everyone for the good advice. I definitely didn't want to price my tees too low or too high.

 

[shancho]

Our calculation is a bit diference. The minimum quantity will be 300 pcs per colour. If there are more colours or pcs or sizes the price will be the same. If the quantity is 25 then our price will be 25% more than the value

 

[DirtyJerseys]

I like some of the formulas, but I have a question. When one is saying "25 pieces", is that 25 of the same color and same size, like 25 XL Green, or would it be ok to mix and match the color and sizes in the "25 pieces"?

Thanks.

 

[guest5779]

pieces = shirts.

It doesn't matter if they are all one color or not, it's a flexible formula. Though, it might need to be tailored do to your costs. You would generally have a higher markup on a multi-color shirt to keep the same profit margin as a 1 color shirt.

ie: 1 color = $5.00 to produce, sell for $15.00, multiplier = 3
4 color = $10.00 to produce, sell for $30.00, multiplier = 3

Though this is really dependent on a variety of variables. Such as your theme, target market (demographics, psychographics, etc.). GL.

 

[Twinge]

I like some of the formulas, but I have a question. When one is saying "25 pieces", is that 25 of the same color and same size, like 25 XL Green, or would it be ok to mix and match the color and sizes in the "25 pieces"?

This will actually vary. Usually at the 'level' that is being discussed here color of shirt won't be an issue at all. Sometimes size will be (and thus, it'd be 25 XL shirts, not 25 shirts), though it often isn't either.

When talking about having shirts actually made from scratch, this is usually more of an issue; e.g. a company may require 1000 per color per size to accept your business.

 

[MZDEELO]

from what ive learned, after you already know how much it costs you to create the shirt (printing,production,dyeing, finishing, etc) you then have to think how much you want your tshirts to retail for. retailers go by a 2.5 markup meaning if your wholesale cost is $20, the retailers would then double it and a half to a retail price of $50.

so then, you should do the same for your own costs. if it costs you $8 to make the shirt, then use the same formula as the retailers and double it to $16 + half of the shirts cost (which in this case would be $4) to a total of $20. the $4 can be the maximun amount you discount per shirt to people who buy large quantities.

 

[fooledbyfresner]

I think I have a good perspective to offer you from the real world. I own a screen printing shop and a few doors doen from it I own a seperate Skate boutique. I buy my fashion t-shirts from the likes of Volcom, D.C. Element ect. for about 9.95 and they retail for around 19.95 The retail satandard is to double the wholesale cost or "keystone" the price. Think of the narrow end of a keystone being the wholesale and the top end being twice as wide as the suggested retail. I usually charge other indie skate companies to produce their t-shirts for about 5.50 ea they sale it to shops for 9.95 and the shops sell it to the consumer for 19.95. Bargain shirts as cheap as 15.00 (retail) and high end waterbased ink art prints for 23.00 (retail).

This only applies to screen printing. Direct to garment printing is too expensive to have multiple middle men. You have to sell directly to the consumer ( and hopefully a dumb one) to lake any money.

 

[tim3560]

Actually, I've seen a couple of contract companies that have very good pricing in the higher margins. This is something I've pondered over for the last few months as I'm building my brand. I was in the mindset that screen printing is always better, but now that some companies are really getting comfortable and skillful with the dtg's there are good and bad for each process. Screen printing is cheaper and to a lot of people, a better print, but I can get full color prints from dtg and similar pricing to sp in higher quantities. And now, a lot of dtg printers will allow you to mix a bunch of different designs in the same order. That's the part that's so appealling to me. If I run out of smalls in a specific design, I have to order at least 12 more with sp, but with dtg, I can order just a few of this, one of that, 2 of this size, etc and get long lasting prints with a soft hand and long life span.

 

[wovenwings]

thanks for the posts, this is all good information!

 

[gadget]

the clothing business generally works on what is called "keystone" they double. If they pay 9.00 for a shirt they generally will sell it for 18.00. Of course if the shirt is unique in some way or an exclusive design....The retailer can get what they think the traffic will pay. However you as a manufacturer need to know your competition. good luck

 

[nlink1712]

Generally, I add 50% of the cost to get the wholesale. And retailers usually double the price.

So if my shirts cost me $6 to make, add $3 (50%) to get $9 wholesale. Retail would be $18.

Ideally, I'd like to get to the point where cost drops so that I double the cost, and retailers double the wholesale.

Shirts $4.50, wholesale $9.00, Retail $18.

 

[gadget]

Many times when i want to price a t-shirt or other product i look at what the retail is/should be and then i cut it in half. That tells me what i need to sell it for. Then i decide if i have enough profit to make me happy....Otherwise if i cannot figure out how to reduce my costs i will not make the product. good luck

 

[PPC]

I was wondering what you guys would do if they were talking about buying 1000- 10,000 at a time. If the shirts were costing me $5.50 to make. Would I have to dramatically drop the price like your guys formula?