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Margins too low? Need advice!

4138 Views 17 Replies 3 Participants Last post by  NoXid
Hi all,

I hired a printer to screen-print 75 t-shirts.
Total 5 colors, 3 locations.

After calculating and factoring in everything, the breakdown cost of each t-shirt is:

T-shirt printing + shipping : $10.75
Free shipping absorbed : $2.90
Free returns absorbed : $2.90
Fulfilment center cost for handling returns : $2
Storage fulfillment monthly fee for 75 t-shirts: (60/75) : $0.80
Fulfillment fee per t-shirt: $2.80

Total cost per t-shirt : $21.35
T-shirt sale price: $28

Profit margin : $6.65

Is this normal? It seems so low, no wonder most t-shirt shops close down within 6 months. Any tips or advice?

The free-shipping-free-returns thing, I believe it will greatly boost sales, on the other hand.
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Is the fulfillment part Amazon? If so, then I get it, as you are paying for access to Amazon's customers. If not Amazon, what are you getting that you couldn't do yourself?

5 colors, 3 locations ... The end customer sees a shirt with a design or saying on it that they like. They don't know or care that it cost more for each color and placement. Many, many good selling shirts are one color, one location. Almost all of my screen printed shirts are one color, and all are one location. I'm sure the shirt is a lovely creation to behold ... as a creator, but you could probably do a much less costly version and not affect sales at all. KISS applies to Ts as it does to most everything else.

F free returns! Why pay to encourage behavior that will actually lose you money? If your profit is ~$6 and a printed T costs you ~$10, then you lose ~$4 on a return/exchange, and you paid $2.90 upfront for the privilege! You may be selling on Amazon, but you are not Amazon. Returns will be because the person ordering misjudged the sizing, or didn't bother to even check (in the case of a gift for someone). With free returns, some people will order a couple different sizes and simply return the ones that didn't fit. Cool, huh?

I clear ~$17 a shirt, and do not offer free returns (of course, if I screwed something up, then I send them a replacement at no cost to them, and they get to keep the bad one, too. And I still would make money on the deal!).

A few years ago I looked into using Fulfillment By Amazon. I actually have an Amazon account, but never applied for permission to sell apparel. Their fees and rules and ... just too much BS for me to tolerate for too little pay. My hat is off to you for managing to get through the process :)

That said, I am selling on Merch By Amazon, but that is an entirely different thing, where Amazon is more or less being a POD. I do nothing but upload designs and collect money ... and selling a shirt at $19.99, would clear about a dollar less than you are at $28, and involves no upfront investment (other than the year+ I was waiting to get accepted).


All that blather aside, you are you, and need to do what makes sense for you. My suggestions to you are:
  • Reduce the complexity/cost of the screen printing.
  • No free returns (especially if dealing with women's styles!!!!!!!!)
  • Open an Etsy shop (fees are much lower than Amazon, but you'll need to fulfill your own orders).


It's all a learning experience, and every mistake is another lesson. Just don't pay too much for any one lesson, or you won't be able to put what you learned from it into practice.
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Hi NoXid, thanks for all your replies to my prev posts as well. They are very insightful.

Is the fulfillment part Amazon? If so, then I get it, as you are paying for access to Amazon's customers. If not Amazon, what are you getting that you couldn't do yourself?
No, the fulfillment house is another company, not Amazon.
I send all the t-shirts there for storing and they ship out and handle everything for me.
Reason being, my target market/audience is all in the US and I'm not in the US, that's why.

5 colors, 3 locations ... The end customer sees a shirt with a design or saying on it that they like. They don't know or care that it cost more for each color and placement. Many, many good selling shirts are one color, one location. Almost all of my screen printed shirts are one color, and all are one location. I'm sure the shirt is a lovely creation to behold ... as a creator, but you could probably do a much less costly version and not affect sales at all. KISS applies to Ts as it does to most everything else.
I'm going for a strong branding approach here, that's why on the sleeve, there's a certain design as well that will be kind of like a "signature" style for all my t-shirts, and another location is the inner-neck label. I'll see if I can reduce a couple of colors for the front but I doubt that's going to cut the cost down too much. Or is it?

5 colors vs 1 color = maybe only 15% difference in cost? I need to check with my printer.


F free returns! Why pay to encourage behavior that will actually lose you money? If your profit is ~$6 and a printed T costs you ~$10, then you lose ~$4 on a return/exchange, and you paid $2.90 upfront for the privilege! You may be selling on Amazon, but you are not Amazon. Returns will be because the person ordering misjudged the sizing, or didn't bother to even check (in the case of a gift for someone). With free returns, some people will order a couple different sizes and simply return the ones that didn't fit. Cool, huh?
Actually, I was looking at a couple of t-shirt sites and ecommerce companies like Zappos (365-day free returns). I was trying to emulate that, because maybe it will encourage way more people to buy. E.g: more returns, but also more people buying due to that

But after reading these, I think of doing the opposite. Thanks.
Yes, I'm selling women's tshirts for women.


I clear ~$17 a shirt, and do not offer free returns (of course, if I screwed something up, then I send them a replacement at no cost to them, and they get to keep the bad one, too. And I still would make money on the deal!).
What about those customers email you saying the size is too small despite you stating clearly the size measurements? Do you entertain those?


A few years ago I looked into using Fulfillment By Amazon. I actually have an Amazon account, but never applied for permission to sell apparel. Their fees and rules and ... just too much BS for me to tolerate for too little pay. My hat is off to you for managing to get through the process :)
Nope, not selling via Amazon. My strategy is to go for a branded look to specifically target the target audience (very niche market), so if I sell on Amazon, it will be like customers are buying from Amazon (the brand) and not from me. They'll remember Amazon instead of me.
Plus, I understand we have no control over the customers, meaning, we can't contact them or anything, they're all Amazon customers.


All that blather aside, you are you, and need to do what makes sense for you. My suggestions to you are:
  • Reduce the complexity/cost of the screen printing.
  • No free returns (especially if dealing with women's styles!!!!!!!!)
  • Open an Etsy shop (fees are much lower than Amazon, but you'll need to fulfill your own orders).
Noted. Thanks, especially 2nd point.
I've tried Etsy (for other items) but it seems to take a lot of search engine optimization (very costly) on their platform IMO.
At least with my website, I can bank on Instagram since I've been building up an audience there.


One other thing: my size breakdown for women's t-shirts (e.g: Anvil 880) is:

M: 18
L : 22
XL : 22
2XL : 13

Is this good based on your experience? Less 2XL maybe?
Reason being most people in the US seems quite large size (no offense lol)
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Hi NoXid, thanks for all your replies to my prev posts as well. They are very insightful.

No, the fulfillment house is another company, not Amazon.
I send all the t-shirts there for storing and they ship out and handle everything for me.
Reason being, my target market/audience is all in the US and I'm not in the US, that's why.
Oh, yes, I sort of remember a previous post about selling in the USA from outside of it.


I'm going for a strong branding approach here, that's why on the sleeve, there's a certain design as well that will be kind of like a "signature" style for all my t-shirts, and another location is the inner-neck label. I'll see if I can reduce a couple of colors for the front but I doubt that's going to cut the cost down too much. Or is it?

5 colors vs 1 color = maybe only 15% difference in cost? I need to check with my printer.
I do my own screen printing. Trust me, each color and location adds a lot of work. Other than the blank shirt, what you are paying for is a screen for each color in each location. A small print, like a neck label, is really no less work and bother to print than a full chest design (unless they are doing the neck with one of those rubber cup stamping machines).


Actually, I was looking at a couple of t-shirt sites and ecommerce companies like Zappos (365-day free returns). I was trying to emulate that, because maybe it will encourage way more people to buy. E.g: more returns, but also more people buying due to that

But after reading these, I think of doing the opposite. Thanks.
Yes, I'm selling women's tshirts for women.
As I said, you are not Amazon ... but Zappos is. Amazon bought them :p

In the USA, at least, one complication with women's shirts is that size names mean absolutely N O T H I N G. A men's large in any brand will have the same chest measurement, though the sleeves, waist, neck etc may be cut differently between brands and styles. But a women's large could differ by 10 inches from brand to brand or style to style. And women get upset at you because your size Large fit them like a child's shirt! In my listings, I build the chest measure into the size selector, and include the women's dress size number (shown as #16, or whatever) ... though even that standard is wildly abused by brands who sell a "feel good" sizing experience where they label an item an #8, but it is actually closer to a #12. Thus even further confusing women about what size they should expect to fit them.


What about those customers email you saying the size is too small despite you stating clearly the size measurements? Do you entertain those?
Sure, they can send the shirt back to me, postage is at their expense, because it was their mistake. After I receive it, I will send them another shirt at my expense.

Nope, not selling via Amazon. My strategy is to go for a branded look to specifically target the target audience (very niche market), so if I sell on Amazon, it will be like customers are buying from Amazon (the brand) and not from me. They'll remember Amazon instead of me.
Plus, I understand we have no control over the customers, meaning, we can't contact them or anything, they're all Amazon customers.
Yes, Amazon is very much about Amazon.


Noted. Thanks, especially 2nd point.
I've tried Etsy (for other items) but it seems to take a lot of search engine optimization (very costly) on their platform IMO.
At least with my website, I can bank on Instagram since I've been building up an audience there.


One other thing: my size breakdown for women's t-shirts (e.g: Anvil 880) is:

M: 18
L : 22
XL : 22
2XL : 13

Is this good based on your experience? Less 2XL maybe?
Reason being most people in the US seems quite large size (no offense lol)

I believe that is the same shirt Merch By Amazon was using, I know it was Anvil. I ordered a few samples of my designs, and the things are ridiculously tiny, and do not measure out to match their supposed specifications. I didn't measure mine until after I washed them ... but, uhm, your customers ARE going to wash their shirts ;)
MBA is currently switching to a different brand of shirt, and everyone selling via MBA is very happy about that :)

As to how many of each size to order, I really can't say. It depends a lot on the demographics of your target market. I offer a slim option and a relaxed option for women's garments, and sell a fair number of Small slims and 1X relaxed ... so obviously plenty of people at the extremes ... but your niche may drastically differ.

Toss it out there and see what happens. It's all research for the next round.

Enjoy
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Thanks! One more thing. Do you know what is that new t-shirt MBA is using, since they're ditching Anvil? If it's so good, maybe I can get it too!
Thanks! One more thing. Do you know what is that new t-shirt MBA is using, since they're ditching Anvil? If it's so good, maybe I can get it too!
I believe the main reason for the change was the complaints about the Anvil being cut small. The new shirt is a Port & Company shirt, I'm not sure which style / part number. Port & Company is an in-house brand of a wholesale blank distributor: SanMar. Hanes makes it for them.

I assume it is this one:
https://www.sanmar.com/p/5626_Coral

Unless you have a SanMar account, you won't be able to see pricing, but you can poke around on their site all you like. Most screen printers will have heard of or used P&C.

I've yet to see one myself. But I've got a new MBA sample on it's way and it will be on the new shirt.

Note, regardless of sizing issues, I'm not a fan of Anvil. So it's not like it would take much to be "better." MBA offers two shirt choices. Anvil was the low end choice, now it will be P&C. Their high end option is Bella+Canvas.

Myself, I offer a lot of style choices, and source those from different brands according to who has what and how well I like it. I use Next Level Apparel for slim styles; Hanes and Bella for relaxed styles; and International Trading Company for hoodies. Overall, I am most impressed with NLA for having a very good price/quality ratio.

Being outside the USA, it is no doubt a bit more bother and expense to obtain samples, but well worth checking out some options before committing to inventory.
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Appreciate the insight, but you say you use Hanes and Bella for relaxed styles? Based on what I researched and seen in the size chart, I thought Bella suffers from the same issue as NLA, in that the womens tshirts are too small?

Also, I look at the size chart for P&C. It seems the womens' sizes are even smaller than Anvil by a large margin.....unless the complaints against Anvil are the men's sizes and not womens....

I've a sample of the Anvil 880 and they're bigger than the NLA one I've.
Here's the size chart for 880:



Probably the largest women's cut you can find anywhere :D
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Appreciate the insight, but you say you use Hanes and Bella for relaxed styles? Based on what I researched and seen in the size chart, I thought Bella suffers from the same issue as NLA, in that the womens tshirts are too small?

Also, I look at the size chart for P&C. It seems the womens' sizes are even smaller than Anvil by a large margin.....unless the complaints against Anvil are the men's sizes and not womens....

I've a sample of the Anvil 880 and they're bigger than the NLA one I've.
Here's the size chart for 880:



Probably the largest women's cut you can find anywhere :D
All I can say is the Anvil I got from MBA and washed is teeny tiny. I've seen a fellow MBA seller post a photo of an Anvil and P&C side by side, and the Anvil was much shorter and narrower. I won't have my P&C sample until Saturday, so can't see for sure. Like I said, I'm not absolutely sure which models of Anvil and P&C are being used by MBA.

As to Bella. Yes, all the fashion fit women's styles from all the fashionable brands are skinny shirts. However, Bella has the #6400, which they call a relaxed cut. They still have a womanly shape, but are sized much larger than the #3900. The chest measure is very similar to a man's shirt of the same named size, but has a womanly waist and sleeves. Selvite types would find them to be way larger than expected.
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All I can say is the Anvil I got from MBA and washed is teeny tiny. I've seen a fellow MBA seller post a photo of an Anvil and P&C side by side, and the Anvil was much shorter and narrower. I won't have my P&C sample until Saturday, so can't see for sure. Like I said, I'm not absolutely sure which models of Anvil and P&C are being used by MBA.

As to Bella. Yes, all the fashion fit women's styles from all the fashionable brands are skinny shirts. However, Bella has the #6400, which they call a relaxed cut. They still have a womanly shape, but are sized much larger than the #3900. The chest measure is very similar to a man's shirt of the same named size, but has a womanly waist and sleeves. Selvite types would find them to be way larger than expected.
Hmmm.....I'll check with you again on the P&C once you get it. Very curious to see how they turn out!

Btw, I got a quote for LAT 3507 (3 colors, 3 locations), and it's $17 - $20 per tshirt! (qty 75)
I read that LAT is really good but sadly, they're too expensive.
FYI The washed women's Medium Anvil I have measures 17.5 inches one inch below the sleeve, which is the standard way to measure. It measures 23.5 in length, from highest point to bottom edge. The size chart that MBA used for the Anvil shirt matches the measures in the one you posted. You might measure the sample you have, then wash it and measure it again.

If the end result is that far off, you can understand why many were unhappy with the shirt on MBA.

Also, I loath the sleeves on Anvil shirts (speaking of men's cut, now). But some people probably prefer that style, so no accounting for tastes or fashion ;-)
Okay, my latest MBA samples arrived a day early.

Measured as it arrived, not yet washed.

Women's Port & Company
Size Large


Actual Measure:
Chest - 20 3/4
Length - 27 1/2

Specification:
Chest - 20 3/4
Length - 27 1/4

I'll measure again after washing.


EDIT: Measure after washing:
Chest - 20 1/2
Length - 27

Much better end result than was had with the Anvil, at least in terms of sizing.
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Okay, my latest MBA samples arrived a day early.

Measured as it arrived, not yet washed.

Women's Port & Company
Size Large


Actual Measure:
Chest - 20 3/4
Length - 27 1/2

Specification:
Chest - 20 3/4
Length - 27 1/4

I'll measure again after washing.


EDIT: Measure after washing:
Chest - 20 1/2
Length - 27

Much better end result than was had with the Anvil, at least in terms of sizing.
Thanks for updating!

1) Are you happy with the fabric quality of the P&C shirts? Are they soft and smooth?

2) Do you know what causes t-shirts to shrink drastically, like in the case of Anvil's? Is it due to crappy cotton quality?
....
What about those customers email you saying the size is too small despite you stating clearly the size measurements? Do you entertain those?...

you must clearly post that return shipping paid by buyer. This will deter some returns.

The rule is " You win some, You loose some "
Thanks for updating!

1) Are you happy with the fabric quality of the P&C shirts? Are they soft and smooth?

2) Do you know what causes t-shirts to shrink drastically, like in the case of Anvil's? Is it due to crappy cotton quality?
They are passable. Not the softest shirts I have ever felt, though they are ringspun. Remember, like Anvil, Port & Company is a relatively low cost option, and that low cost means some tradeoffs.

Anvil says the shirts are preshrunk ... but people have complained about shrinkage for years ... so I don't know. Perhaps their preshrinking process is lame, perhaps it is something about the way the fabric is knit :confused:

Shirts/brands that are soft and don't shrink so much:
- Next Level Apparel; generally the best value, in my opinion.
- Bella+Canvas; more money (this is what MBA uses for their "premium" shirt).
- American Apparel; yet more money (and now owned by Gildan, like Anvil and Alstyle).
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They are passable. Not the softest shirts I have ever felt, though they are ringspun. Remember, like Anvil, Port & Company is a relatively low cost option, and that low cost means some tradeoffs.

Anvil says the shirts are preshrunk ... but people have complained about shrinkage for years ... so I don't know. Perhaps their preshrinking process is lame, perhaps it is something about the way the fabric is knit :confused:

Shirts/brands that are soft and don't shrink so much:
- Next Level Apparel; generally the best value, in my opinion.
- Bella+Canvas; more money (this is what MBA uses for their "premium" shirt).
- American Apparel; yet more money (and now owned by Gildan, like Anvil and Alstyle).
Thanks! Do you have any experience with District Made t-shirts? Seems like they're a good alternative.
Thanks! Do you have any experience with District Made t-shirts? Seems like they're a good alternative.
No, I've never tried them.
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Hi @noXVid, when you refund the customer for a defective product etc...., do you refund the shipping fees as well? What if the customer chose those priority shipping? International shipping?
Hi noXid, when you refund the customer for a defective product etc...., do you refund the shipping fees as well? What if the customer chose those priority shipping? International shipping?
Yes, if it is my fault, I would hold the customer harmless and return all of their money. Generally, though, the customer wants you to fix what went wrong by sending them a replacement. Either option would be painful for an international order.

I suppose that one could state in your terms that international orders were not returnable ... only I think maybe the EU requires that you accept returns, not sure :confused:
Or you could state that the shipping cost is not refundable on international orders. Not sure how that would affect sales.

The best idea is to do all that you can to prevent returns and mistakes. Make it is clear as possible how the various garment options fit and fairly represent the art and garment in your images (don't make your art look bigger on the garment than it really would be, for example).
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