Pricing your custom t-shirts is one of the trickiest parts of running an apparel business. Price them too high, and you might alienate your audience; price them too low, and you’ll struggle to make a sustainable profit. Here is a straightforward guide to pricing your merchandise.
Calculate Your Cost of Goods Sold (COGS)
Before you can set a price, you need to know exactly how much each shirt costs you to produce. This includes:
- The Blank Garment: The wholesale cost of the t-shirt.
- Printing Costs: Ink, labor, setup fees, or the cost paid to your POD provider.
- Packaging & Shipping: Polymailers, inserts, labels, and postage (if you offer free shipping).
- Platform Fees: Shopify fees, credit card processing fees, etc.
Determine Your Desired Profit Margin
A standard retail markup is typically 2x (often called keystone pricing), meaning if a shirt costs you $10 to make, you sell it for $20, resulting in a 50% gross profit margin. However, in the custom apparel world, margins often need to be higher to cover marketing and overhead. Aim for a gross margin of at least 40-60%.
Analyze the Market and Your Brand Positioning
Your pricing must align with how you position your brand:
- Value Brands: Selling standard cotton tees with basic prints. Prices usually range from $15 to $22. High volume is required.
- Mid-Tier Brands: Using premium blanks (like ringspun cotton) with good designs. Prices range from $24 to $32.
- Premium/Streetwear Brands: High-end fabrics, custom tags, limited drops, and strong brand identity. Prices can range from $35 to $60+.
Don’t Forget Perceived Value
You can increase the perceived value (and therefore the price) of your t-shirts through professional photography, excellent customer service, high-quality packaging, and a compelling brand story. People don’t just buy a shirt; they buy what the shirt represents.
