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How to Price your Brand’s T-shirts for Retail

Pricing T-shirts for Retail

You’ve finally made some coveted retail buyer connections that are willing to feature your brand’s t-shirts in their retail shop! Congratulations, that’s a big step! But now you have to price the t-shirts to make a profit, and appeal to your buyer’s interest without crossing their purchasing limit threshold. How do you go about figuring this out so you don’t ruin this extraordinary chance? It could make or break you t-shirt brand’s future. There are a variety of ways to approach pricing your custom t-shirt brand’s designs for retail.

Before you can start thinking about how much to sell your t-shirts for, you have to have a strong grasp on how much they cost to produce. If you’re starting with a small batch as a trial run, the cost per shirt is going to be more since you assumedly did not order bulk t-shirt printing from your screen printer. This is going to be a tough start and you may have to be flexible with how much profit you make initially. If your t-shirt design and relationship with the retail shop are a success, you can order in bulk next time to make more of a profit on future sales. However, you should not overprice your tees in an attempt to make more money at the beginning, if you do this, you could be sabotaging your chances for success and you’ll never know if the lack of sales was because of your design or the price.

Make sure you understand how the cost per shirt is calculated with your t-shirt printer. Professional and established t-shirt printers typically have a structured price break depending on the number of shirts ordered. Find out where their significant price breaks occur. If you’re ordering for your first trial run, it would be a shame to have missed out on a good deal simply for lack of understanding. However, until you have become an established customer with a history of significant repeat orders, do not expect wholesale prices from your printer. As custom clothing lines are a very popular endeavor, your printer has likely had many experiences with startup brands that don’t succeed, therefore are unwilling to offer specialty pricing until a pattern of success has emerged.

Your pricing will also depend on the quality of the t-shirt product you choose to have your design printed. High end products will garner a higher sense of value from your customer but you must also evaluate the type of customers the retail store attracts. Things to consider are the location and the general pricing of other merchandise featured, and the immediate local competition.

Location matters a great deal. If the surrounding area is swanky, you may get away with a premium price if it’s a premium product. If it’s more of trendy yet dive bar trashy area, consider tempering your profits with salability. Are the other products in the $30 range? Or is $20? Don’t underestimate the difference $5 can make in the mind of your customer. If there are two choices and one is $5 cheaper, that’s a venti latte at Starbucks and coffee is non-negotiable to some people. Is there a lot of competition in the vertical of apparel immediately surrounding the shop? Take a look at the products and pricing inside these local shops. That should give you a decent indication of expectations buyers have for the area.

Converging all of this information into pricing, you should still consider the value of our product. If you’ve produced a great design printed on a high quality product, and it’s being showcased in a retail shop that can tolerate a higher price, don’t be afraid to sell it at a price its worth.

Clothing retailers need to sell a lot of merchandise to stay afloat and they typically are looking for a gross profit margin of 25-35% as well to do this. How do you calculate your price with that figure in mind? For example if your cost to have each t-shirt printed is $15.00 and you wish to make a personal profit of 40%, 100% + 40% = 140%. Multiply the $15.00 cost by 140% and you come to an asking price of $21.00. In turn, for the retail shop to get their desired profit margin of 35%, they would then calculate $21.00 x 135% coming out to a retail price of $28.35 per shirt. When calculating these margins, keep asking yourself, will the market bear it and adjust accordingly.

So you have come to price that both you and the retailer can potentially agree on, but not so fast. Pricing is an emotional venture. You have to take some tactics of marketing into consideration when pricing each shirt. People react to subtle cues when deciding on a purchase. There’s actually an entire gamut of emotions consumers experience when deciding to make a purchase. They ask themselves, do I need this? What will I lose or gain from my purchase? Does this t-shirt fit my image and will it make me look good? That last qualifier is not really even about physical fit, it’s more of an emotional fit as in will I look stupid to my family and peers for having purchased this t-shirt or will I look like a smart, stylish shopper for having purchased it.

If it’s possible to have 3 price points, people like to have that choice. This could come in the form of your design printed on tote bags, t-shirts, and hoodies for example. Another way to manipulate the emotional aspect of buying is offer a price break with bundled products. If you have 3 different designed tees, offer a discounted price per shirt if all three designs are purchased together. Keep actual price tag cost just below rounded numbers. Even though it’s simpler, the difference between a $20 price tag and a $19 price tag makes the perceived cost much lower in the mind of the consumer.

2017 is predicted to be another great year for the fashion industry according to a McKinsey report that suggests 2.5 to 3.5 percent overall growths. According to the same report the vertical that is predicted to see the absolute highest growth is athletic wear so that’s definitely something to consider when deciding what types of apparel products to print your design on and offer to consumers.

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