# Chain of stores wants my shirts - Price to charge?



## BAD311 (Nov 17, 2007)

I have the chance to sell my companies line of t-shirts/apparel in 45 stores in the Southeast. The company is interested in purchasing 5,000 t-shirts with 10 different designs... So 500 shirts of each design... 8 of those designs are black t-shirts, 2 are white t-shirts...

What should I charge the company per t-shirt on an order of 5,000? If I'm spending $3.00 for the t-shirt & printing, what should I sell it to the company for? Retail value will be $15-$20 depending on the stores location/market.

I figure $3.00 per t-shirt/print, and I sell to the company for $6.00 each?

Does this sound about right? Should I go lower or higher? I plan on coming at them with an offer of $7.00 per t-shirt, with the expectation of $6.00 as the final sale price...

Any ideas? Pointers? Tips? Shirts are just black Beefy T's with simple white lettering/print...

Thanks all!


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## Skyler Francis (Nov 15, 2007)

BAD311 said:


> I have the chance to sell my companies line of t-shirts/apparel in 45 stores in the Southeast. The company is interested in purchasing 5,000 t-shirts with 10 different designs... So 500 shirts of each design... 8 of those designs are black t-shirts, 2 are white t-shirts...
> 
> What should I charge the company per t-shirt on an order of 5,000? If I'm spending $3.00 for the t-shirt & printing, what should I sell it to the company for? Retail value will be $15-$20 depending on the stores location/market.
> 
> ...


Well I haven't ever been in that situation but I figure that you should double your money as they will want to double theirs. Even at 3.00 profit that is 15,000 dollars which isn't too bad. Another thing you can look at..... if they sell well they will want more. You can also use that with other stores saying "I have placed 5000 shirts in over 45 stores" then maybe sell them wholesale for a little more to the next store.

Also... make sure that they purchase them with no refund if they don't sell... you could imagine having to buy back 5000 shirts lol


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## jlcanterbury (Jul 26, 2007)

the general rule of thumb for the retail stores that i work with is a 100% markup by the stores

I am in charge of the prices with the stores I work with, so there isn't much negotiating usually. They don't really care what they pay, since they will simply mark the price double what they paid and pass the price to the consumer. It's not usually a problem because I operate in the higher end of the industry.

so if the target retail value is $15-$20, then they should be purchasing the shirts at $7.50-$10

the factors that will probably influence the price of this transaction will be the quantity, and general market for these shirts

the quantity means that you will generally give them a discount... whether the discount you give them is reflected in the retail cost is ultimately up to them. basically, you could sell them the shirts for $6 and they could retail them at $10. Or, you could sell them for $6 and they could retail them at $20. You don't have control over that, so this is where the consumer base, the type of market, and the demographic of the consumers comes in

if the store you are dealing with is a "budget" store, and generally sells to the lower end fashion market (not meaning that in a bad way, just meaning that it is not the high end unreasonably priced fashion market) than the store will most likely want the $6 price tag, so they can offer the more appealing price of $15. 

if you are dealing with a higher end store, then they won't mind passing a higher price tot he consumer, because in that market they know a consumer is willing to pay it.

but based on the numbers you are giving, i'm guessing it is not a high end store (because the high priced boutiques and such are usually low quantity) you are probably looking at a $6-$10 sell per shirt. I would probably try out a $8 or $9 price in the beginning, see if they will take it. If not, work with them from there.

It all really depends on the situation, and how efficiently and cost productive you can manufacture the shirts. In the end, be sure that you are getting your fair share for the work put in... don't let the big guys toss you around as intimidating as they may be 

good luck...


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## pokerman (Nov 7, 2007)

JLcant gives you great insight and coming from the selling end to larges stores, keep two other factors in mind. If you start low ($6.00) each and they sell well, the stores will come back with a larger quantity expecting a lower price for their bigger order. Where do you go from $6.00? Start higher initially and offer them the $6.00 if they re-order the same qty or more within 90 days (as an option to negotiate).

Secondly and very importantly. Be very clear up front you don't buy back unsold inventory. You're going to get the request anyway but be upfront about it and don't expect to get paid in 30 days. Chain/dept stores are notorious for delaying payment, VERY creative deductions, and then negotiating payment after it's due. 
Trust me, this is not unique, it's in the genes of mass/dept store/muti-store retailing. You will experience this...plan for it. 
When they take back a shirt because it has a flaw (the kid snagged it on the door hinge and returned it to the store as defective), they're going to give the customer a new one and expect you to take back the defective. $6.00 initial sale less the $6.00 return....um, gets ugly real quick if you haven't thought it through and priced accordingly to handle the multitude of hurdles you'll encounter. 
This is not meant to dispirit you, just a battle tested in the trenches truth monger here.


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## Fuse Ind (Jul 12, 2007)

How did you go about getting your clothing in these stores? did you send in a catalog, take a catalog into someone? just looking for some advise.Thanks


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## BAD311 (Nov 17, 2007)

I sent them a message on MySpace, LoL.


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## Shuffy (Sep 3, 2005)

and be sure to have a contract drawn up . . with all the thee's and thou's and the what for's

I would even ask for 50% cash payment up front (non refundable)
cover your booty up front
with that many shirts -- who's to say . . your half way through production and they cancel the order . . .*ugh*~

Diane
;o)


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## BAD311 (Nov 17, 2007)

Very true!


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## Platinum-Ink (Nov 27, 2007)

What JLCanterbury and Pokerman is all very true and very realistic. The big stores really depend on smaller companies to fill up their shops but try to seem in full control (if all the smaller companies backed out, what would they sell?). Definately be sure to have a contract ready for them to sign and I would definately take 50% upfront.. it also keeps things moving when their money is taken.

As far as consignment and full sale goes.. you definately want to sell your apparel for whatever cost you may have set (but do plan ahead if you will be giving pricebreaks) later on as Pokerman said. If you plan on giving a few piece goods to a local boutique, then consignment is more reasonable or atleast initially it is just to see how your items move.

consignment is when you put your product in a store and don't get paid until the item is sold. Many stores might feel at a lesser risk with this, but I recommend selling your product to them at a 50% full sale price (from what you sell it as, if they want to up the price.. that will be their decision). When they buy your product to sell, then you're paid and only need to take orders from there instead of worrying about an item selling, watching their inventory, and getting paid. Can be much more of a hassle that may not be worth the trouble.


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## inthegarden (Nov 26, 2007)

The general rule is:
Cost = 25% of retail. 
If you can make a shirt for $3.00, sell it wholesale for $6.00, it retails for $12.00. That's a reasonably priced shirt.
Most people would squawk at that because the one who produces it only makes $3.00, when the retailer makes $6.00. The thing is, you're never going to make what the retailer does. For one thing, He/She has a greater overhead. Building leases, insurance, advertising, employees, etc.
In our store, we generally sell regular printed T-shirts M-XL for $12.99, XXL for $13.99. Embroidered go for $16.99.
Also, make sure you get full setup and design cost. I've seen some retailers pull the plug, and left them with a week of work sitting on a shelf.
Large order commitments bring their own challenges. If you aren't used to carrying that kind of quantity, you have a major up front expense ahead of you. Possibly thousands of dollars to produce this, and then maybe 1-2 months before you get paid.
Good snag if you can handle the volume. Good luck with it.
Tom


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## BAD311 (Nov 17, 2007)

All of my deals are "80% up front" this is true for my web design services, graphic design services, everything. I will try and apply it toward this as well, with a very specific contract stating several of the things you guys mentioned. I'll keep ya all posted!


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## Platinum-Ink (Nov 27, 2007)

Good Luck with everything BAD311, definately do keep us posted.


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## pokerman (Nov 7, 2007)

Lots of great suggestions here but when reality strikes, plan for it. In 30 years of selling to multi-store operations, not once has one ever paid a deposit in advance. It would be nice but I'd love to hear about it if it ever happens. That's fine for small custom orders out of a retail store or small shop but not in the realm of reality when considering selling on a volume basis to a retailer.
Good luck and keep us posted.


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## inthegarden (Nov 26, 2007)

Our family business was started in 1924. As far as I know, we NEVER prepaid on large orders of this size. We do with some small crafters who have limited resources and limited stock. But that's just to help them out a bit. the last t-shirt order we did was for $18,000. I would have been suspicious if they would ask for money up front. The reason? If they receive our money, then produce an inferior product, I have no bargaining power. Ain't happening.
Tom


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## Beneddie1112 (Nov 12, 2007)

Remember, Always have a solicitor draw up a contract so you are covered should anything go wrong.


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## jdarracott (Sep 3, 2007)

Some real inexperienced replies. If you haven't even talked price with your buyer, then you've got a way to go. Do you know how to calculate margins ( saw one reply talking about a 100% markup-no such thing)! Do they have a vendor agreement- do you know the terms of the vendor agreement? Most majors have a vendor agreement that will dictate terms, packaging specs, etc. including charge-backs that are sometimes the real killer. Check out the retail price points of other t-shirt prints they have on the floor & look at the sizing scale. The big boys will make you sell them 2X & 3X for the price as s-xl.


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## spn2k1 (Dec 16, 2007)

Do you have to get your contract written up, or is there a source that you can obtain a contract that you can modify?


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## Beneddie1112 (Nov 12, 2007)

I believe that for a contract a lawyer is the best choice.


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## spn2k1 (Dec 16, 2007)

Thanks. Sounds more reliable.


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## karlking85 (Sep 26, 2007)

Johnny, when you say there's "no such thing as a 100% markup," what exactly do you mean?? This is the method the majority of our suppliers use. The only beef I have with the formula is the 100% markup on the retailer's end. I know most retailers use this method but 100% to me just isn't enough, too much overhead to cover. Our store tries hard to maintain a COGS of roughly 35-40% which serves us well.


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## jdarracott (Sep 3, 2007)

Ok... technically, there is a difference between mark-up and margin. Margin is the terminonogy that any good sales/marketing person and/or corporate buyer will use - everything is based on margin. All the rookies try to talk about mark-up. Margin is calculated by taking your cost ( or cost of goods sold ) and dividing that number by the reciprocal of 100. Example: if you had an item that cost you $3.00 - and you wanted to put in a 40% margin - then you divide the $3.00 by .60 to equal $5.00. If you wanted to take that same number and put in a 50% margin -then you divide the $3.00 by .50 which would be $6.00. If you were after a 35% margin - you divide the $3.00 by .65 to equal $4.615 - so forth and so on. Double the cost is a 50% margin - not 100% - it is also referred to as a keystone... ( originated from the state of PA where many years ago a retailer used a 50% margin that he called a keystone ) Another example: Wal-Mart's entire success
was built on using a 35% margin rather than the traditional 50% margin
of Department stores. Sam wanted to be under everyone else and figured out that he coulkd take a 35% margin -be cheaper than the competition and thus sell more goods - well guess what!


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## karlking85 (Sep 26, 2007)

Ah, okay, I see what you're saying now. Gotcha.


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## trotters_traders (Dec 8, 2006)

when trying to sell to big store or shop or whoever do you simply take in your design and get a number of how many they want and in what sizes?? and in what colours? whats stoping them copying your designs


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## nevermind (Dec 14, 2006)

Nothing really - Realistically the stores/shops are not in the manufacturing and design business. They are in business to sell product, not create it. You do have copyright and trademark laws, but I imagine that gets pricey and messy.


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## karlking85 (Sep 26, 2007)

^It does. And it is generally only worth it costwise if you are a larger firm. Taking another business to court over trademark/copyright infringement is very expensive. And ugly.^


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