T-shirt pricing: How to price your t-shirts for maximum profit

Setting up your own online t-shirt shop can be a fun and lucrative way to turn your creativity into income. But many sellers discover that t-shirt pricing is a far more complex process than they'd imagined.

On the one hand, you'll need to charge prices that cover your upfront costs in order to keep your business afloat. On the other hand, it's important to sell your shirts at a reasonable rate in order to remain competitive.

In this article, we’ll break down how to approach t-shirt pricing in a way that makes the most sense for your business model. From an explanation of the pricing formula to best practices for pricing your products, we'll fill you in on different considerations that go into finding the right t-shirt price for your products.

• The rise of ecommerce has made it easier than ever before to start a t-shirt business without renting a physical storefront.

• If you want to start a t-shirt business online without incurring high overhead production costs, then working with a print on demand partner may be the perfect answer for you.

• T-shirt pricing involves considering how much it costs to produce and ship your custom shirts in order to ensure that you mark up your prices enough to end up with a healthy profit.

• Whether you use a t-shirt pricing calculator or work out your pricing on a piece of paper, there are several factors you'll need to consider to determine the right pricing for your products.

At first glance, the average t-shirt pricing formula is fairly simple. If you have a certain amount of money you want to make from each sale, then simply plug it into the following formula:

Total cost = overhead costs + desired profit margin 

The tricky part of t-shirt pricing is making sure you take all your overhead business costs into account, from how much it takes to create the t-shirt to the price of shipping it to your customer.

Finding a t-shirt pricing calculator that helps you come up with a more realistic overhead can be incredibly helpful when it comes to calculating your earnings vs. production cost. Here's an overview of some of the many costs that may come into play when creating and selling t-shirts.

If you create your own t-shirt designs, do you have to pay subscription costs for software like Adobe Photoshop? Or do you use free software like Photoshop Express to create your designs?

If you're better at coming up with great ideas than actually turning them into designs, then you might even consider hiring a professional freelance designer to help bring them to life. No matter how you create the designs you plan to print on your t-shirts, be sure to calculate any monthly costs into your overhead!

Production costs include the cost of your t-shirts themselves and any materials or supplies you use to print your designs on them. For example, some sellers invest in the materials needed to use heat transfers or screen printing to customize their own t-shirts.

Others utilize a print on demand partner like Gelato, which takes care of the order production and fulfillment process. Each time you sell a product, we'll supply the shirt, print your design on it, and deliver it right to your customer.

Print on demand is a quick way to produce more custom products without actually having to deal with the production process yourself. You'll also enjoy the benefits of never having to purchase any inventory until you've already made a sale.

In order to start a business on the web, you'll need an online storefront where you can sell your products to customers. Make sure you factor in the transaction fees the marketplace takes out of each sale.

If you choose to go with an ecommerce platform like Shopify, then be sure to calculate your monthly subscription fees into your overhead costs. Unfortunately, when it comes to which option is the best, there's no one size fits all answer because every business is different.

If you go with a transaction-fee-based site like Etsy, just be sure to monitor your sales each month to determine the total cost coming out of your profits. As you scale your business, you may get to a point where you discover it's cheaper to go with a flat-fee-based ecommerce solution.

Shipping fees are a necessary nuisance when it comes to running your own online business and can generally be approached in one of two ways. The first is to simply pass along the shipping price to your customers by taking it onto the price of each sale.

The second is to work shipping fees into the t-shirt cost itself and then offer "free shipping." In the era of Amazon Prime, some customers may be averse to covering their own shipping, so working it into the total cost can be a nice way to avoid abandoned carts without affecting your profit margins.

If you choose to use Gelato as your print on demand supplier, it's worth checking out our subscription options once you reach a certain sales quantity. If you choose to upgrade, you can enjoy special discounts on shipping rates.

Be sure to calculate any relevant taxes into your pricing, such as the sales tax on each order and any income tax you may owe on your business. You'll definitely want to take these into consideration when determining the total cost of your products so that they don't eat away at your profit margins.

Finally, the cost of marketing can be an important consideration in t-shirt pricing as it can highly affect your sales quantity. Many sellers use paid ads or influencer marketing to help promote their business, each of which can cost extra cash.

There are several different ways to go about shirt pricing. The right method for you will depend on the details of your brand. You may even choose to utilize different pricing models at different stages of your business development.

Competitive pricing, aka penetration pricing, is the art of offering your t-shirt for a lower cost than your competitors. While this can be a great way to help establish your business, it may initially result in less profit.

If you do choose to go this route, avoid the temptation to offer lower-quality merchandise to make up the profit margin difference. The goal is to attract a solid customer base that can help you scale your business long-term, so make sure you give each buyer plenty of reasons to make more purchases in the future.

Cost-plus pricing is a method that allows you to determine the price of an item by adding a set percentage to your production costs. For example, you might decide to mark up every product in your online store at 30% of the total cost it took to produce.

Dynamic pricing is a bit more complicated but involves adjusting your shirt pricing based on demand. For example, if a seller discovered that one of their shirts was particularly popular, they might slowly increase its price.

Dynamic pricing is one form of value-based pricing, which involves pricing your shirts based on your customer's perceived value of each. While value-based pricing can be a solid approach, it requires more extensive, ongoing research than other methods.

Bundling is a form of pricing that offers buyers a reduced cost when they purchase two or more items together. It's sort of like bulk pricing but on a smaller scale.

Instead of offering customers the chance to enjoy a bulk discount on major orders, you might consider running a buy one, get one 50% off sale. Or you might offer to include a free fourth t-shirt with the purchase of at least three others.

Once you calculate a realistic estimate of how much each t-shirt will take to produce and decide on a pricing model, you'll be well on your way to selecting the right prices for your products. But there are several other things it's important to consider throughout the t-shirt pricing process.

If you choose to use cost-plus pricing, you'll need to decide on your target profit margin. This is the percentage you hope to earn from each sale after factoring in all of your production costs.

For example, say you want to make a 30% profit on a shirt that costs $15 to produce. If you want to work out the cost yourself, you could plug your numbers into the following formula:

Overhead costs ÷ (100 - return rate) x 100 = t-shirt price

Or you can use Gelato’s profit calculator to project your potential earnings with your print on demand business.

The more unique your designs are, and the more they resonate with your target audience, the more you'll be able to charge for them. Buyers tend to be willing to pay more for a truly unique shirt with a design they haven't seen or can't find anywhere else.

While it's still good practice to keep your shirt pricing realistic, creating a popular shirt that's truly original can justify charging a slightly higher rate. It's also a great way to ensure that your business stands out from those of competitors.

Who doesn't love a good sale? Offering discounts and promotions can be a great way to build your client base and boost your sales quantity.

For example, you might consider running a BOGO half-off sale or offering free shipping for a limited time. If you run a newsletter or email list, you can also send out coupon codes that offer a certain percentage off of the total cost of each subscriber's next order.

T-shirt pricing isn't always an exact science and will somewhat come down to the interests and values of your target audience. For example, some buyers may be willing to pay more for performance athletic t-shirts or shirts made from organic materials.

Other audiences might prefer quantity over quality and prefer t-shirts that come with a cheaper price tag. Don't be afraid to experiment with different pricing strategies, discounts, and promos over time so that you can monitor which ones work the best.

Whether you use a t-shirt pricing calculator or simply add your desired profit to the cost of producing each product, finding the ideal price range for your customers is essential for driving sales and earning a sustainable profit. Don't be afraid to experiment to determine what prices work best for your shop.

If you decide to use Gelato as your print on demand supplier, you'll enjoy several unique features designed to help you calculate the right price for your custom shirts.

• Gelato's Price Navigator is designed to help you search for markets that present solid selling opportunities for you. It also includes powerful features that allow you to review local competitors in different areas and better understand their approaches.

• Our Retail Insights feature allows you to explore both the production costs and average prices of various products in different markets.

• The Price Setting tool can help optimize your strategy with a feature-rich pricing calculator that offers insights into how much you'd earn by selling your inventory at different prices. It can also help you set custom prices for specific products or set bulk prices for your entire inventory.

• You can also use the Retail Price Insights feature to check out landed market prices (prices that take discounts into account) and see how your prices stack up.

Print on demand services like Gelato include all the tools you need to take the guesswork out of t-shirt pricing. We also offer sellers a great way to produce high-quality products in any quantity without having to worry about purchasing supplies, materials, or printing equipment.

You supply the designs and bring in the customers, and we'll supply the t-shirt, print it with your custom design, and ship it right to your customer. You'll enjoy being able to focus on creating great products without ever having to purchase your own inventory until it's already sold.

Create your free account today to start selling high-quality custom t-shirts with Gelato's sustainable and reliable print on demand service.