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Blog / Marketing tips / How to Price Custom Shirts

Marketing tips

How to Price Custom Shirts

How to Price Custom Shirts
Una Berzina-Pudule

By Una Berzina-Pudule

9 min read

Pricing your products can seem intimidating. And for a good reason—product pricing is one of the factors that determine how well your online store performs among competitors and how much profit you make.

The fact that you’re here scouting the internet for information on how to price custom shirts is already a good sign. It means you’ve already avoided the worst possible choice in product pricing⁠—simply guessing and hoping it works out.

In this blog post, I’ll walk you through the process of assessing your product expenses, picking out a strategic approach, and, ultimately⁠, setting your product’s final price. 

1. Assess your product cost

Product cost is the total amount you spend to create your product. If you sell print-on-demand or dropshipping products, you’ll start product cost assessment with the price you pay for each item. 

Let’s say you want to sell the Unisex Staple T-Shirt. The price you see in the product’s description is Printful’s base price—it’s how much the product costs without design costs, shipping, taxes, and suggested profit margins.

If you want to calculate the total cost of the product and earn a profit from each sale, you need to consider all expenses.

Learn more:

Designing costs

Your shirt designs are what will ultimately convince your customers to buy, so they’ll cost you time and resources. If you’re outsourcing design services, divide the price you pay to the designer by the number of items you expect to sell. This is especially crucial if you plan on releasing the design in a limited volume or as a limited-time offer since that restricts how much you can profit from that design.

If you create designs yourself, it’s tempting to ignore design costs to keep the retail price low. However, your time is valuable, so make sure you profit from it. My best suggestion is to come up with a realistic hourly rate for your work. Then add that to the product cost. This will also help you evaluate the effectiveness of the time you spend working on your business.

Besides time investment, you should also research the design cost of your chosen technique and design placement. For example, if you want to embroider a Printful shirt, there will be a digitization fee for every new design you order or push to your store. You’ll also have to consider your chosen embroidery type. Large embroidery placement as well as embroidery and print design combinations cost extra. And take note of the product label costs if you want to add your brand logo. 

Shipping costs

When it comes to shipping, you need to consider what kind of shipping rates to offer to your customers. Free shipping for all orders will boost your sales. In fact, customers are 4–5 times more likely to buy something if you offer them free shipping, but that means higher product costs since you have to cover the shipping yourself.

Here’s the formula: divide the supply shipping costs by the number of items in your order and add that to the product cost. For example, you pay $20 for shipping 50 t-shirts. You then divide 20 by 50 and get 0,4. Your shipping cost per product is 40 cents.

You can find shipping costs for shirts for each region on our shipping page.

Warehousing 

Maybe right now your garage or living room for your t-shirts suffices, but what happens later? Your customer demand might outgrow your living space and your capacity to pack and ship orders on time.

Printful is an on-demand shipping company, meaning each Printful order is fulfilled and shipped automatically as soon as we receive it. This means you don’t need to think about warehousing and shipping at all, unless you’re planning on storing your custom packaging or pack-ins

Price your products right

Use our guide to review Printful costs and learn how to price your products to make a profit.

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2. Choose a product pricing strategy

Once you know how much money goes into making your product, it’s time to come up with a game plan. Here are some of the most effective product pricing strategies that are easy to manage in the long term.

Cost-plus pricing

Cost-plus pricing is the most straightforward strategy out there. The formula is:

Product costs + profit margin = your retail price

You take the average product cost and add your desired profit margin. The result is the price tag that you should attach to the product. You need to choose a good markup price carefully. If your profit margin is too low, you might make too little for your business to be sustainable, which is especially important if you want to make your online store your primary  source of income.

When choosing this strategy, Printful’s profit calculator might come in handy.

Printful profit calculator 

Cost-plus strategy example using Printful profit calculator 

Market or competition-oriented pricing:

To do market or competition-oriented pricing, you have to start by comparing your shirts with similar items on the market and see the average price. It’ll give you an overall idea of the potential price range. There are three main tactics that you can choose from.

  • Pricing above the market average—one way to outrun your competition is by adding more value to the shopping experience. Create original, high-quality designs that customers can’t find anywhere else. You can also add freebies and personalized messages to each order or createpremium-quality visuals (professional photos, store design, or influencer social media posts ). 

  • Pricing the same as the market—this is a safer bet if you want to cover a large target audience and still make some profit. This will put you in the same price league as your competitors, and you’ll be able to attract the same customer segment they do.

  • Pricing below the market average—this way, you can undermine your competitors with more appealing prices and possibly steal some of their customers.

Learn more: 8 Ways to Market Expensive Products So They Look Like a Steal

Be careful—if you severely underprice a product, it can seem sketchy and generate insufficient profit. As Des Traynor, author of Intercom on Starting Up, precisely explained:

“Low pricing rules out lots of potential customers for your product, in the same way serving $3 steaks in a restaurant actually restricts your clientele.” / Des Traynor, Intercom.com

You can see the market-oriented pricing strategy in action with many dropshipping stores that sell the same products but at vastly different price points. Take Zaful. They’re a dropshipping store supplied by AliDropship that sells plenty of the same trendy fashion items you can find on the Aliexpress marketplace but for a higher price. Zaful drives sales by showcasing items with quality photos, introducing loyalty programs, using influencer marketing, and creating a visually appealing store design. They show that going the extra mile by properly marketing their products can potentially bring in more profits.

Aliexpress marketplace t-shirt example

Aliexpress marketplace

  Zaful t-shirt example

Zaful

 They also combine market-oriented strategy with anchor pricing, which I’ll talk about next!

Anchor pricing

Chances are you’ve already seen it in action—a brand sets up an imaginary anchor price only to immediately announce a lower discount price. The discount seems appealing, so it’s more likely to reel in people scouting the internet for bargain deals.

Possibly the best example of a well-thought-out anchor pricing strategy is by Apple. In this video, Steve Jobs explains the iPad pricing process. He mentions that the appropriate price for a product like this should be $999. After this, he announces the price will actually be $499, which magnifies the cost-to-value ratio.

Demand or dynamic pricing

Demand or dynamic pricing requires you to be constantly in the loop with recent market trends and customer desires. Here product prices depend on demand and seasonality, which means you need to change prices if you have seasonal or holiday t-shirt designs. 

This strategy is used by Amazon Marketplace. Using the nifty price tracker by camelcamelcamel.com you can track how product prices change over time.

Example of a seasonal shirt's price fluctuations over time

Example of a seasonal shirt's price fluctuations over time
Source: Camelcamelcamel

Pro tip: Use camelcamelcamel.com tool to track prices of products similar to yours. That way you can predict your own potential product demand hikes and drops.

Discount pricing

Discount pricing is similar to anchor pricing. The only difference is that the starting price actually exists. You set up a starting price higher than the average market price and then frequently host sales, drawing in bargain shoppers. With this strategy, you’ll receive most of your sales in bursts.

Discount pricing strategy example

Asos discount pricing example
Source: Asos

Even if you don’t plan on hosting regular sales, remember popular ecommerce events like Black Friday & Cyber Monday—your customers will expect to see deals on your site on these days. So, while choosing a price for your custom shirt, leave room for future discounts.

Skimming pricing

The skimming pricing strategy is when you enter the market with a high price and then slowly lower it over time. This way, brands try to make the most out of the market by gaining profits before the product loses its demand. This is a popular strategy among stores selling electronics. As the product model ages and new models are released, the demand for the old one decreases.

Example of Samsung TV price decreasing over time camelcamelcamel.com

Example of Samsung TV price decreasing over time 

Source: Camelcamelcamel

This is a risky strategy for new brands, especially if your product already has well-established competition. It would, however, work well for those selling an authentic product with little to no competition. If you’re looking to sell the newest tech invention and planning to release updated versions, you should consider giving this strategy a go. 

As a strategy to sell t-shirts, it’s unusual, but each business is different, so it might or might not work for you.

Penetration pricing

This strategy is inverted skimming pricing, meaning that you enter the market with a below-the-average price to attract a large customer base and then gradually raise your price as you grow the number of loyal customers. This is a beginner-friendly option as long as your starting price has a profit margin that doesn’t go below $0.

Once you’ve established stable traffic to your website and see traffic growth, you can market your shirts at a higher price.

3. Review your selling prices regularly

After such a thorough process of figuring out your product pricing and picking the best strategy, it’s tempting to sit back comfortably and not think about your prices again. I’m here to ruin your party by saying this process will never be entirely done.

Demand for your custom t-shirts might rise or decrease, additional product costs may come along, which means your retail product price should change.

Review your prices regularly. Check your product’s demand, stay in the loop with ongoing trends, and keep up with your supplier pricing. And frequently check up on ecommerce brands similar to yours because they might be keeping an eye on you too.

Get to custom t-shirt pricing

Now that you’ve got the tools to figure out how to price your custom shirts for retail, it’s time to get to work:

  • Assess your product costs carefully

  • Pick a strategy that you feel most comfortable managing and that matches your business vision

  • Come back to your product pricing strategy regularly—go over your custom shirt costs and see if there have been any changes

We’ve also made a print-on-demand product pricing video guide. Check it out:

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Also, check our t-shirt review video to find out which models suit your business and which are the best t-shirts for printing your designs. 

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What’s your experience with product pricing so far—have you used any of the above-listed strategies? What’s your most important takeaway from that experience?

author

By Una Berzina-Pudule on Apr 27, 2023

Una Berzina-Pudule

Content Marketing Specialist

Una’s a Senior SEO Content Writer with a knack for SEO-friendly copywriting and building stunning landing pages. In her spare time, she's an avid reader and keeps close tabs on all things social media and mental health.

Una’s a Senior SEO Content Writer with a knack for SEO-friendly copywriting and building stunning landing pages. In her spare time, she's an avid reader and keeps close tabs on all things social media and mental health.