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Plastisol Heat Transfers vs Direct Screen Printing: a case for custom plastisol heat transfers

Editor's note: This article was written from the perspective of someone who started out with direct screen printing and then started a plastisol heat transfer business. Feel free to share your own views in the article comments and/or submit an article of your own for inclusion in our upcoming newsletters :)




Anytime anyone asks me should I screen print myself or should I buy transfers, my quick answer is buy transfers, but there is more to my quick answer.

You need to look at what is important to you. Do you want to be actively involved and engaged with your customers, taking their orders, building a relationship with them or do you want to be a prisoner to your screen printing shop, screen printing orders, losing site of why so many of us join this business in the first place? There are some people that truly love the art of screen printing and for those people I recommend do what you love as long as you can make a business of it and make money. For everyone else that is looking to add screen printing to their business or is currently selling screen printing to their customers, buy transfers.

The Business Perspective

Screen Printing is an expense. An expense is something you have to pay every month even if you sell $0 for that month. As a screen printer, you have to purchase the equipment and supplies. You need an artwork computer, the artwork programs, a way to print film positives, an exposure unit, screens, a manual or automatic screen printing machine, squeegees, flood bars, flash units, a dryer, a wash tub, and all the chemicals, emulsions, and inks in order to print your first job. Your start up costs are at a minimum of $50,000, but in most cases in order to do it right more like $100-150,000.

As the owner of the screen printing business, you will either need employees which will add to your monthly expenses to create the artwork, take the artwork to image the screens, to screen print the jobs, and to reclaim/clean the screens once you are done printing the job to reuse the screens for another job. Some companies, the owner does all of these duties themselves. What happens is the owner loses focus on what is important, they spend all their time screen printing and in the shop working rather than building long lasting relationships with their customers. The Screen Printer is now at a disadvantage competing against the guy that is buying transfers. The guy buying transfers doesn’t have to worry about all of his jobs that are stacked up to screen print. The transfer guys are giving their undivided attention to their customer.

In addition, in order to have a screen printing shop you will need at a minimum 2,000 square feet. Rent is expensive. Save your money. Some will sacrifice space within their home, garage, basement, or barn to save on rent. This is even worse. Why on earth would you want to first take away your living space to make room for equipment and supplies, but most importantly, do you really want to introduce the chemicals and inks into your home where you live? It’s a no for me. Why not use your home to live in and not be inconvenienced by filling your home with equipment and screen printing smells?

Transfers are a variable cost. A variable cost is you only spend money when you sell a job that needs to be fulfilled. This means every time you take a screen printing order, you then place this order with a company that prints transfers. You are only spending money with this transfer company when you have a paying customer paying you money for the order.

As the owner of a company that buys transfers, you are on the front lines, selling yourself, your business, directly to your customers, building long lasting relationships with them that will pay dividends every time your customer needs to place not only a screen printing order, but any orders that your company can fulfill.



The Screen Printing Argument!

If I screen print, I have control over my production. I say this is not always true. In 2012, there are several creditable transfer companies that honor a strict production turnaround time which in most cases are faster than the direct imprinters industry standards. Ok then, well my margins are higher if I screen print myself. Not true! Most owners do not value their time the way they should. I always recommend the owner should always punch in to gain perspective on how many real hours they work within their business. At a minimum, an owner should pay themselves $20 per hour. I guarantee if any owner of a screen printing company punches in, takes the profit for their jobs, divided by their time, they were working for in many cases less than minimum wage. This is the brutal truth.

Sure there are some cases where this may not be true. You cannot always make blanket statements like this. But the odds of this being your reality are much greater than the alternative.

If you screen print, typically your margin is around 50%. If you buy transfers, your margin is around 30%. Is the additional 20% worth the risk? Am I really making a 50% profit? Let’s look further into the numbers.

Up Front Cost (20% Down Payment to the bank) - $10,000

Expenses
$1,000 Rent
$700 Property Taxes & Insurance
$1,800 Screen Printing Monthly Loan Payment
$500 Utilities
$3,500 Owners Salary
$1,000 Owners Payroll Taxes

8,500 In Monthly Expenses

Cost of Goods Sold
$3,000 Shirts
$500 Ink
$300 Emulsion
$400 Chemicals
$300 Mesh

$4,500 Average Monthly COGS on an annual basis

As the owner of a Screen Printing Company, you must sell at a minimum $26,000 per month just to break even. As you sell more, your COGS could rise because you need to hire an employee or you need to purchase more screen printing supplies. Your real margins could vary from month to month. My opinion is simple, “it is not worth the risk, the effort, and all the hard work”.

With transfers, you always make your profit and money. You decide what margins you want to make off each job and you make it each and every time you sell a job. If a customer comes to you and demands a lower price, you have the luxury of accepting a lower margin or you can decide it is not worth your time to take the job. As the owner of a company buying transfers, you have this luxury. You do not owe the crazy monthly expenses and COGS associated with screen printing.

With transfers, you can afford the space within your current facility or within your home. All it requires is a table to hold a heat press (about 10 square feet), some additional table space, a place to store your transfers and shirts, and some printing space. All you need is a 10’ x 10’ room or 100 square feet. When I printed transfers in college, I had the heat press in my bedroom next to my desk. I had sufficient room. I’m not saying you have to do this in your bedroom or in your home, I am just trying to illustrate how little you need to spend on printing transfers.

Up Front Costs

$500-1,800 To Purchase a Heat Press

Expenses - $0

Cost of Goods Sold
$3,000 Shirts
$3,000 Transfers

As the owner of a company that buys transfers, you require $0 in sales each month to break even. You only spend money on shirts and transfers when you sell a job. In this example, if your COGS are $6,000, your profit for the month is $2,600 and you sold $8,600. If we say you sold the shirts for $15 per shirt for purposes of this example, that means you sold 574 shirts. You can print 30 shirts per hour on the extreme low side, which means you spent 19 hours printing shirts plus lets say 6 hours taking the orders and placing the transfer orders totaling 25 hours. If you take 25 hours and divide it by $2,600 in profit, your hourly rate is $104. The average person that works full time works 173 hours per month. You can either spend the other 148 hours doing something else or you can spend that time selling more jobs and building relationships with your customers. You can also do what I did in college. I marked up my shirt cost by $.35 per shirt. I paid a friend of mine $.35 per shirt no matter if there was one imprint or more than one imprint. I added $.35 per shirt to my COGS then I added my markup. In this example, I only worked 6 hours and made $2,600 in one month ($433 per hour).

It is all perspective when owning your own business. You must critically look at your company or the company you want to have and make the decisions necessary to be a smart profitable business owner.

This article is placing the assumption that direct imprinting and transfers on a shirt are equal. I would argue in another article that transfers are more versatile, give you better quality artwork and detail, last longer on the garment than direct imprinting, and transfers are much softer/have less ink on the garment.

You need to critically look at what you want for you and for your company. Do I want to make money or do I want to work myself into the ground screen printing myself? What is my purpose to sell screen printing or to screen print? Critically look at what you want. Create a well thought out plan. Then execute it.

Trust me, I gave up a great future in law committing myself to the transfer industry because I believe wholeheartedly that transfers are good for our industry. Transfers offer a great quality product that is affordable to the end user. Everyone wins when working with transfers.

Francesco Viola is the owner of Versatrans, one of the T-Shirt Forums sponsors who has been offering custom plastisol heat transfer printing services for over 10 years.​
 

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As a person who started a shirt line with screenprinted shirts I can verify that the cost can be pretty high, especially when you have limited funds to start. I am now considering transfers which brought me here . Thanks for the info this helped a lot
 

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Just saw the Expenses in the Article. Don't think you need that much money.

You can find a single office, industrial shop or or garage for under $500.00 a month. I had one guy who wanted to share an office for a auto dealer license. He charged $250 a month. He and another lady only needed a physical address with parking spots.
 
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