Unless you’re only screen printing for fun, you need to know how much you should sell your shirts to make a profit. The best way to know for sure how much you should sell your shirts to make a profit is to use a profit calculator. Following a calculator is helpful, but how does it translate to the real world? Here’s a crash course in pricing shirts as well as some pricing advice from real-life shops.
OVERHEAD VS. SPECIFIC JOB COST
Before you even think about processing the cost of a specific job, your first step should always be to find out how much money per month you spend on simply having a business. That includes rent, electricity, internet/phone bills, insurance, equipment cost, and the amount of money you want to pay yourself as a business owner.
Find out what the total monthly cost of these expenses is, divide that by the average number of items you print each month, and you have the amount you have to charge per item to cover overhead for that month. This will help you figure out what you need to remain sustainable.
Here’s a formula to help you out:
| $ Rent per month |
| + $ Equipment cost per month |
| + $ Phone/internet per month |
| + $ Insurance per month |
| + $ Admin pay per month |
| + $ Other overhead costs per month |
| = $ Total overhead cost per month |
Now that you’ve calculated your overhead costs every month, it’s time to calculate your overhead cost per shirt. Here’s another formula:
| $ Overhead total cost per month |
| ÷ Average number of shirts per month |
| = $ Overhead cost per shirt per month |
Alright, so you know what the overhead cost of your shop is per month and how that translates to each shirt printed. Now it’s time to calculate the total labor cost per shirt. This formula varies from shop to shop. Add up the number of hours it takes you to print a job. This includes pre-production, printing, cleanup, and anything else you do for a job.
T-shirts courtesy of SanMar.
LABOR COSTS
You’ve calculated the overhead and amount of hours spent on a job. What about your time? It’s valuable, and you want to make sure you’re staying in the green, as well as paying any employees you may have. Here’s a formula to help you out:
| Number of hours per item per job |
| x ($ Hourly cost of labor + $ Taxes) |
| = $ Labor cost per item |
Once you know how much it will cost to print the items, you have to calculate the cost of the materials that go into the printing itself. Here’s how to find it:
| (Number of screens x $ cost of screens) |
| + ($ Item cost x number of items in the job) |
| + ($ Total cost of ink for that job) |
| ÷ Number of items in the job |
| = $ Cost of materials per item |
There’s one more step: calculating the price per item in a job. To do this, add the overhead, labor cost per item, and the cost of materials per item used on that job. You’ll end up with the total cost per item for that job.
| $ Overhead |
| + $ Labor cost per item |
| + $ Cost of materials per item |
| = $ Total cost per item for that job |
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REAL-LIFE EXAMPLES
Let’s put all of these formulas into perspective. Heather Mueller, owner of Loyal to the Press, a print shop in Vancouver, Washington, prices her shirts based on garment quality, color availability, print and placement, and whether or not a shirt needs an underbase or additive.
For a 50-piece, one-color order, their base cost is $6.64 per shirt plus the cost of the garment. Other variables include the garment, if the artwork needs to be re-worked in any way, and setup fees and ink charges.
Maher Hachem, or Munch, the printer behind Love Yourself Clothing, takes a few factors into consideration when pricing shirts. He starts by calculating the cost of overhead and labor and then does some comparison shopping. He checks out similar brands and messages friends to see how much they would be willing to pay for the shirt.
“Taking these surveys works great since you're getting a brand and consumer perspective!” Maher said.
To find the cost of the shirt, he combines the cost of t-shirts, his per-print charge — usually about $5 per print — and increases that number by a few dollars if he’s using a specialty ink. Other factors include burning the screens, adding a fixed percentage on the invoice that can cover any damaged pieces during production, and the cost of making samples for each piece.
For a 50-piece, one-color job, Maher charges the wholesale cost of the blanks, adding 15% on top of the wholesale to cover any damaged goods during production. He charges about $5 per print on each shirt depending on color and then charges $35 per screen being burned (this covers the screen, transparency, & labor of making the screen). Other variables that would affect this could be the turnaround time for the project and any specialty ink used.
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CALCULATING PROFIT
The point of a business is to make a profit, right? Depending on the situation, most businesses want to aim for 20% to 45% profit. In some shops, the set-up simply won’t allow for a 45% margin due to high production time, material costs, or overly competitive local pricing.
Check with local shops in your area to see what they’re doing. If you simply can’t keep up with your competition's pricing, consider specializing in something they don’t offer. Here’s a formula to calculate the profit you’ll make:
| $ Total cost per item per job |
| x % of desired profit as a decimal |
| = $ Profit made per item for that job |
Next, you need to add that amount to the base cost of each item for that job and multiply it by the number of items in the job. That looks like this:
| $ Profit made per item for that job |
| + $ Total cost per item for the job |
| = $ Price to charge customer per item |
Now, multiply the profit per item by the number of items in a job:
| $ Price to charge per customer |
| x Number of items in a job |
| = $ Total price to charge for the job |
This is the price that you need to charge the customer for that particular job and achieve the profit percent that you designated.
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PRICING WORRIES
When running any small business, pricing can be a worry. What if customers don’t agree with the prices? What if the price is too low, and you don’t make any money? While staying competitive is important, it’s also important to know that you are offering a service that takes time, energy, and money to provide. You deserve to be paid fairly for it.
Loyal to the Press advises printers not to worry too much about whether their pricing has hit the sweet spot. Instead, focus on gaining quality clients who appreciate the work you do.
“We find that if a client is ready to move forward with their print then the pricing won't be an issue. With each quote, we do let our potential clients know that we are a custom hand screen printing shop, meaning each piece we print is hand created with care, which takes time,” Heather said. “They're either ready to pull the trigger or they aren't.”
OFFERING DISCOUNTS
Offering discounts can be a great way to get recurring customers or to get large accounts to pull the trigger if you do it right. Don’t go overboard with these, though. The goal is still to be in the green at the end of the job.
Use holidays to offer a discount if it makes sense for your brand and customer base. If most of your customers are based in the U.S., it makes sense to offer a Memorial Day or Independence Day discount. Heather of Loyal to the Press offers a military discount to all veterans as well as a discount to re-occurring clients.
Munch of Love Yourself Clothing offers discounts at the end of a newsletter or for prolonged jobs. He also hosts occasional giveaways.
THE FLASH SALE
Flash sales encourage customers to buy products they might not normally purchase. These sales usually are quick and don’t have a lot of build-up surrounding them. They’re generally geared to people who are paying attention to the shop or brand and hop on it immediately.
Think about Amazon’s Prime Day. How likely are you to at least peruse the flash deals they offer? While it isn’t guaranteed they’ll have what you want on sale, you might buy something you normally wouldn’t just because it’s on sale. Offering these sorts of quick deals to customers who are tuned in to your shop may have the reward you’re looking for.
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PRICING FOR BRANDS
If you run a clothing brand, pricing can look a little different. Because everything in the brand is your creation, it has intrinsic value. You created the logo, the designs, and the feel of the brand from scratch. Because of this, you can charge a little more for your work.
Here’s an example: Converse shoes. There are a ton of knockoffs on the market that mimic the real thing pretty well, but nothing is quite like the real deal. Because of this, Converse shoes are more expensive. You’re paying for the brand and everything it stands for, not just a shoe with a rubber toe.
Love Yourself Clothing is a company focused on promoting mental health awareness through apparel. Munch, the creator of the brand, breaks down pricing completely differently than with client work.
“For Love Yourself, we do everything made to order so we don't sit on any inventory. Once a week I place a wholesale order and begin production once the blank shipment arrives. For clients, we take their shirt quantity, design, and turnaround and give them an invoice based on that. Naturally, this causes a difference in payout since our model is based on drop shipping and the clients are based on having inventory.”
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So you’re printing your own apparel brand. How much should you charge? Shop around to see how much other clothing brands are charging for custom-printed shirts. This can help you gauge what other brands are doing, and how to price your own shirts to be competitive.
Heather of Loyal to the Press used to print for an apparel brand. The prices of the brand shirts ranged based on the difficulty of the print, just like client work does.
“For example, a one-color shirt would be $20 plus shipping whereas a four-color shirt would be $35 plus shipping,” Heather explained.
No matter what you decide to charge, make sure it makes sense for your customer base and your shop. Make it something you’re passionate about and don’t be afraid to charge what it’s worth.
There’s a lot to think about when it comes to pricing. It’s not just about getting the best bang for your buck. Stay competitive, but stay true to the profit margins you want to receive and the value that you place on your craft.
Got pricing questions? Reach out at success@ryonet.com or call us at 1-360-576-7188