[zoiko]

Not sure how to price these shirts, I will try and explain and keep a long story short. I will be sending some shirts to a person whom I have become really good friends with over the last two years from another forum, She has a DVD production company and attends a few car shows in the east coast. Over the years every time she orders shirts for her company from me I send her some of my stickers and she has passed them out and now people are asking her for my sticker design on shirts. So we decided to start selling shirts in her area and well I want to be as fair as possible.

i am aware that if I was selling them to a store who was going to retail them for about $16.00 i would be selling them for about $8.00 right ??? Now for this situation, I was thinking about adding the cost of the shirt ( bella 6000 Girls tee ) Approx: $3.34 and say a printing cost at $3.00 it would have a cost of $6.64... So say she sells them for $16.00 would it be fair to say that I will split the profit with her ???

Profit would be approximately $9.36 so she would make half of that on every shirt she sells. Would that be fair ??? I would pay the shipping to her.

Please let me know what you guys think of this, it is hard for me to price this because of the friendship we have. But also need to keep it business oriented for the long haul.

Thanks

 

[vadan]

It can be very hard when dealing with friends. I think 50/50 on profit is a really good deal. Have you included your labour in the cost? I ask because at and of day u put the graft in she just sells. Id personally go 60/40 but if its not entirely about the profit I'd stick at 50/50 and everyones happy.

 

[zoiko]

It can be very hard when dealing with friends. I think 50/50 on profit is a really good deal. Have you included your labour in the cost? I ask because at and of day u put the graft in she just sells. Id personally go 60/40 but if its not entirely about the profit I'd stick at 50/50 and everyones happy.

Yeah I will be adding $3.00 for labor, I will be printing them myself. So it would leave like $9.00 that we would split 50/50 I would think it is fair because she would make $4.50 per shirt without buying them up front.

Thanks

 

[johnbol1]

Dont worry if your doing that she is getting a real good deal for little work. But this is how you want it to be cos if shes getting a good deal she has more incentive to sell more thus more $$$ for you too and after all this is extra sales that you didnt have before


John

 

[zoiko]

Dont worry if your doing that she is getting a real good deal for little work. But this is how you want it to be cos if shes getting a good deal she has more incentive to sell more thus more $$$ for you too and after all this is extra sales that you didnt have before


John

Thanks John, yeah we had a good talk a few hrs ago. I was mainly concerned about being fair. We came to the conclusion that we will split cost of shirts on my designs and some of hers, and we will split profits 50/50 ( after all expenses ).

I think it will help both of us out, She will handle the sales in her area and I will print them. I will post up some more details as we go and keep you guys posted on what works for us in our situation, incase any of you guys find your selfs trying to do the same thing.

 

[Solmu]

Standard consignment is 60%, which puts your proposal (~71%) on the high side. On the other hand, standard consignment can be a pretty exploitative relationship, and normally the retailer has higher overheads (like rent on the premises).

If you made it $11/$5 instead, that would be more like 69%/31% and make for very simple figures (she gets $5 from each shirt sold).

Personally if I was her I'd probably still turn that down, but that doesn't mean she would.

Especially since you're charging for labour before profit, yet she isn't. That's pretty one sided, you both have labour costs to get the sale.

(oh, and in my examples it's usually the other party that pays the shipping - so you can factor that in in your favour)

 

[zoiko]

Standard consignment is 60%, which puts your proposal (~71%) on the high side. On the other hand, standard consignment can be a pretty exploitative relationship, and normally the retailer has higher overheads (like rent on the premises).

If you made it $11/$5 instead, that would be more like 69%/31% and make for very simple figures (she gets $5 from each shirt sold).

Personally if I was her I'd probably still turn that down, but that doesn't mean she would.

Especially since you're charging for labour before profit, yet she isn't. That's pretty one sided, you both have labour costs to get the sale.

(oh, and in my examples it's usually the other party that pays the shipping - so you can factor that in in your favour)

Thanks for your time responding to this, Yeah there is plenty more to this story. She has been helping out a lot with promoting my screen printing side of the business with jobs that she has sent me. I also sponsor her with her stickers and send a few hundred stickers a year to her. I think we will just partner up in this situation and see where it goes, I feel strongly that she will bring more to the table than I could do because of the fact that she is all over the place and attends many car show's.

She is even working out a deal that may get our shirts in with some other vendors in other areas of the country. We'll see how it works and I will let you guys know. So on consignment the normal is 60% ??? ..... I did not know that, I will also be researching that for more info.

I have more questions on how to go about running a website that will be printing shirts for other brands ( friends ) and also selling them out of our website / online store. I will also be doing the printing and they will take them and sell them on their own but I will also keep some in my online store to sell.... I want to know how the % would also work, I hope I am making sense. I been printing for a while and have all my pricing worked out, But this side of pricing is a little hard for me to figure out. Thanks and sorry for the long post.

 

[Solmu]

Yeah there is plenty more to this story.

There usually is The most important thing is just that both parties are happy, and both parties are making enough money that they can continue doing what they're doing.

I feel strongly that she will bring more to the table than I could do

In the long-term, if it works out, you may want to consider expanding her piece of the pie to reflect that then.

So on consignment the normal is 60% ??? ..... I did not know that, I will also be researching that for more info.

I would describe it as the norm, but not in the same way that 100% markup is the norm for retail. By that I mean, 60/40 is the most common split for consignment, but it's far from the only way of doing things. I've heard of everything from 40/60 through to 70/30. Well... even 100/0 in rare instances, but that's a bit different.

Consignment is always going to be much more about negotiation than retail, so the terms aren't as standardised.

It's just worth remembering that both parties are invested and stand to lose money. One spent the time and money to make the product, and stands to lose if it doesn't sell. One spent the time and money to warehouse and attempt to sell the product, and is liable for theft. Since both parties are a business, both parties have overheads they need to cover.

I have more questions on how to go about running a website that will be printing shirts for other brands ( friends ) and also selling them out of our website / online store. I will also be doing the printing and they will take them and sell them on their own but I will also keep some in my online store to sell.... I want to know how the % would also work

It partly depends how much confidence you have in them to sell their shirts.

If you are confident, you might offer to do the whole thing on consignment. Do a 60/40 split; they supply design, and do most of the sales, you print the product upfront, supply them what they need, and fulfill whatever orders that come through the website.

On the other hand, if you have a more realistic picture of how many they're going to sell than they do, you might be better off just selling them the shirts, and doing the fulfilment separately. Print the shirts at your standard rates, they own them. Separate to that, you can offer to warehouse some and sell them through a website for a fee. You'd make less money on those sales, but if they don't sell, you made money on the printing and you're not really out anything more than some warehouse space.

I been printing for a while and have all my pricing worked out, But this side of pricing is a little hard for me to figure out. Thanks and sorry for the long post.

It is a really hard area to work out the pricing on. Consignment is a combination of offering credit, goods, and services all wrapped up in one. Normally you just charge a set price for a set good or service - it's relatively simple. Consignment throws the contingency of it actually selling into the mix, which always makes things more complicated.

 

[PPop]

Consignment is just a payment type, be it COD, Cash, Credit Card, or Net 30.

Even tho she is a friend and helping you, you should set your wholesale price.

Originally when I started out there was a thing called Key-stoning, where the store would double your wholesale price and add a couple of bucks to "cover the overhead"

Nowadays with the "Wallmart effect", retailers are so squeezed for price that they don't even expect to double the wholesale price, therefore a $10 wholesale price might get $18 retail

BTW, stores are expected to pay freight.

From another perspective, you should usually try to double your costs on everything you do to make sure you capture a profit, though this is not always possible nowadays.