# Help with pricing



## Yasirm86 (Jan 22, 2012)

Ok so I've been using this price sheet that I found online i edited what I could and I have been using it for a while now up until recently I compared my hoodie prices with a few shops and mine were ridiculously high. So I have been using another one for the time being. I really need help with putting one together. Does anyone have a sheet that I can use that you don't mind helping out I would really appreciate it. I dont know how I would even start to make my own. Thanks!


----------



## league33 (Jun 30, 2012)

I could never use a pricing guide from someone else. Their costs may be very different from mine. There is so much more to consider.

These are my pricing factors:

+ Cost of blank garment (varies with each garment)
+ Cost of shipping from distributor to me
+ My mark up (how much per garment I wish to make)
+ Artwork costs
+ Decoration type (varies with decoration technique used)
+ Supply Kit (cost of emb supplies,applique, heat applied transfer materials, crystals, are there any other special considerations, etc)
= total

Other factors also dictate the final number:

1. Number of pieces 

2. Who the end user is - my price will be different for a school reselling than a parent from that school coming to me for something similar. My price to the parent will end up being about the same price as if they were purchasing from the school.

3. Turn time - when do they need it
4. Material, hooping or placement challenges 
5. Decoration time - is this on the machine for 1.5hrs or 5 minutes.

When an item is on sale from a distributor I do not pass that on to my customer. I base my pricing on the regular price from the distributor. The item may not be on sale when the customer actually places their order with me. If it is still on sale, then it is a little extra for me. 

I know that in my area I can charge $5.00 for name personalization on the back of a hoodie, but 20 miles from me they can only charge $3.00 for the same thing. 

You need to figure out what "your" costs are and what "you" need or want to make to be profitable. 

I am not the least expensive, or the most expensive in my area. If a customer says they can get it cheaper from the shop down the street, I thank them and tell them that is a great deal I would go there. My customers come back to me because I do a good job, for a fair price and guarantee everything I do. 

It has taken me several years to learn to charge for what I am worth. When I started, I would not charge for artwork or set up. Now I make sure that I charge for my time.


----------



## Yasirm86 (Jan 22, 2012)

league33 said:


> I could never use a pricing guide from someone else. Their costs may be very different from mine. There is so much more to consider.
> 
> These are my pricing factors:
> 
> ...



Yeah see that's where I'm stuck at I don't know how I would do all of that...I didn't charge for film or setup as well I still don't charge for film I do for my screens, but everything else is what I want to get some help figuring out. Any ideas or advice on where or how to start to calculate that??


----------



## league33 (Jun 30, 2012)

Sorry I could not help, I don't screen print. Hopefully a screener will reply. I don't know about all the nuances that go into screen printing. Good luck.


----------



## StarDesigns (Aug 4, 2013)

There is an app for that! Look up Shirt Quote in the App Store or Android marketplace. There are a few settings that you can customize and get consistent pricing every time. After setting up all you have to do is input garment cost and number to be printed. We use it to get a ball park price then adjust according to the customer (ex. is it a non-profit, etc.) We quote each job individually and DO NOT use a price sheet. If you have them circulating then when your competition gets one it is all too easy for them to undercut you or use it against you.


----------



## A1WHITES (Nov 19, 2011)

Ok when you said that you charge 3.00 for a name on the back of a hoodie. What size are we talking about. 
Thanks


----------



## Imaginative (Aug 10, 2013)

To the original poster, do you just provide screen printing or do you do heat applied printing?

I don't know if its different outside the uk but everywhere I've looked at who do screen printing charge that one off setup for the screens.

I think your best bet to start with is to have a look around the area and see what your competitors are charging, see how that compares with your current pricing and also see what service they're offering, are they using the same or cheaper quality shirts? Are they supplying heat pressed graphics rather than screen printed and use any negatives that you find as a selling point for yourself.

While you're doing that I'd also look at what league33 listed. Work out the costs and your potential markup, especially for one offs and short runs, and definitely include screen charge otherwise you'll be working in negative figures or have very low profit margins.

There will always be someone out there who will offer something cheaper, but sometimes there's a reason. That place doing personalisation for $3 may be using stock vinyl letters, they may have limited options in what you can have done?


----------



## binki (Jul 16, 2006)

Know your costs. If you don't know you can't stop losing money.
Know what you want to make. If you don't know you can't make any.

Pricing with someone elses price sheet is insane. It is good to know what your local competition charges but at that point you are at the end of your survey. From there you need to differentiate yourself and your product. If you cannot do that you are a commodity and your customer will set your prices.

That ends my lesson on economics with a bonus on marketing for today.


----------



## league33 (Jun 30, 2012)

A1WHITES said:


> Ok when you said that you charge 3.00 for a name on the back of a hoodie. What size are we talking about.
> Thanks


I charge $5.00 for up to 3" x 14". The $3.00 is the rate that is charged a few cities over the same size.


----------



## Yasirm86 (Jan 22, 2012)

binki said:


> Know your costs. If you don't know you can't stop losing money.
> Know what you want to make. If you don't know you can't make any.
> 
> Pricing with someone elses price sheet is insane. It is good to know what your local competition charges but at that point you are at the end of your survey. From there you need to differentiate yourself and your product. If you cannot do that you are a commodity and your customer will set your prices.
> ...


I know my costs...only thing is I don't know how to put everything in to play...get what I'm saying??


----------



## binki (Jul 16, 2006)

So if you know your cost then know what you want to make and go for it. Set yourself apart from the others so you can charge more. Don't use someone elses price list, make your own. 

If you want to make $30/hour and your cost to produce 50 shirts which you could print in an hour is $150 then you sell them for $180. If you only produce shirts 4 hours a day but want an 8 hour income then charge $210 for those same shirts.

What sets you apart? Do you use better shirts, better inks, better designs, have a warranty, reorder policy, what? What makes you better than the next guy? 

Or, compete on price alone, use the cheapest shirts and materials and go with that. 

Either way you can make money.

Hope this helps.


----------



## Yasirm86 (Jan 22, 2012)

binki said:


> So if you know your cost then know what you want to make and go for it. Set yourself apart from the others so you can charge more. Don't use someone elses price list, make your own.
> 
> If you want to make $30/hour and your cost to produce 50 shirts which you could print in an hour is $150 then you sell them for $180. If you only produce shirts 4 hours a day but want an 8 hour income then charge $210 for those same shirts.
> 
> ...


I understand what you're saying I just don't know where do I put in these numbers to get a actual dollar figure or how do I go about making my own sheet.


----------



## Yasirm86 (Jan 22, 2012)

Imaginative said:


> To the original poster, do you just provide screen printing or do you do heat applied printing?
> 
> I don't know if its different outside the uk but everywhere I've looked at who do screen printing charge that one off setup for the screens.
> 
> ...



I provide only silk screening no heat press


----------



## calhtech (Feb 4, 2012)

Yasirm86 said:


> I provide only silk screening no heat press


I am fairley new, but it didn't take me long to realize, either I am going to market my shop as different or competitive. If you have serious competition in your area, you are going to have to make contact with your competition and see what they are charging. Have a friend, girl friend or significant other call with a typical job and get pricing. Need to call 50% of the shops in your area to get a good scope of the market. Give them say a 2 color job, left chest front full back with camera ready artwork on 100% cotton medium weight tee. This should establish your pricing. Like I said, your either going to be different or competitive. (or go broke)


----------



## binki (Jul 16, 2006)

Try this:
$50 per color, per location screen charge.
30 cents per color, per location, per shirt print charge. 
Mark up the shirts 50%

Give a 3% price break at 24, 48, 72, 144 shirts. 

If you don't like those numbers, substitute your own.


----------



## Micki23 (Jul 9, 2013)

I am not good with numbers so I just downloaded a free Android app called EstimaTEE. Does anyone use this? If so, I have a question - if I do not use a screen printer company, and I just apply custom platisol transfers myself, how do I calculate it. 

The options are:
Cost per shirt ...$2.50
Shirt Markup ... $10.00
Number of shirts ... 1
Number of colors ... 2
Print charge (here's where I get stuck)
Screen Prep charge (here's where I get stuck)
Artwork charge (my own design)
Tax

The app does some calculating on its own that I don't understand. They double some items like print charges. Is print charge what I'd input for me applying the plastisol transfer or what the transfer cost me to buy? 

The free version doesn't let you email or save the quote unless you buy the pro version but I am getting an understanding of markup. TIA


----------



## dale911 (Jan 25, 2012)

Micki23 said:


> I am not good with numbers so I just downloaded a free Android app called EstimaTEE. Does anyone use this? If so, I have a question - if I do not use a screen printer company, and I just apply custom platisol transfers myself, how do I calculate it.
> 
> The options are:
> Cost per shirt ...$2.50
> ...


 
Print Charge: How long does it take to do this? What materials are used in the printing?

Screen Prep Charge: Again, How long does it take to do this? What costs are associated with making the screen? don't forget the time involved in reclaiming the screen if you do that.

Artwork Charge: How long did it take to create this artwork? 

The discounting in your quantities are where these number allow you to drop the price. Since you only make the screen once, if you only print 1 shirt, it took a lot of time and effort to do this, just like the artwork. If you divide this over a run of 20 shirts or 100 shirts, your price drops substantially. Same thing with the artwork. 

Now with the printing, you will have a fixed cost based on number of colors. I would base it on how many prints of full coverage can you get out of a container of ink, then divide the price of the container by the number of prints and you know how much your material is. The add the time to actually do the print. 

If it took you 2 hours to do all of that to make 1 shirt and you pay yourself $10 an hour, that's $20 to add to your $12.50 that you already planned for in your cost of shirt and markup on the shirt so you are at $32.50. This still didn't include your screen materials so you may be close to $40. You can't count the $20 you made doing the work as profit. That's money out of your pocket for wages. Your profit is what's left after everything else is paid. That means some portion of that $10 after you pay for rent and phone and website and electric and water and cleaner and everything else you use gets divided into the mix. 

You may have paid yourself $20 plus what's left of the shirt markup, but you have to think of it as if you were paying someone else. If you every intend to make more money by doing more work, you will need help. If you don't plan for that, you will not be successful. Good luck.


----------



## Micki23 (Jul 9, 2013)

dale911 said:


> Print Charge: How long does it take to do this? What materials are used in the printing?
> 
> Screen Prep Charge: Again, How long does it take to do this? What costs are associated with making the screen? don't forget the time involved in reclaiming the screen if you do that.
> 
> ...


Thanks for the info!! I have designed my artwork and will get Plastisol transfers made. I do not have the experience or money to print via screen printing. So would I double the cost of the transfer and also add in my time to put in on the shirt? I am trying to find a per shirt price since I'll probably sell them one or two at a time. They are specific designs. I take there is no formula to get a price as there is in restaurant food markup. Cost x ? = sales price ... thanks again.


----------



## dale911 (Jan 25, 2012)

Micki23 said:


> Thanks for the info!! I have designed my artwork and will get Plastisol transfers made. I do not have the experience or money to print via screen printing. So would I double the cost of the transfer and also add in my time to put in on the shirt? I am trying to find a per shirt price since I'll probably sell them one or two at a time. They are specific designs. I take there is no formula to get a price as there is in restaurant food markup. Cost x ? = sales price ... thanks again.


There isn't really a formula for any of it. Even in restaurants. There are charts available to put in all of your expenses and then add on the margins you want to make. I have always priced items at what I feel is a fair price to pay for them and then go backwards to determine if there was enough money left in the profits to make it worth doing. I do more canvas gallery wraps right now than anything. My profit margins are about 900% and my prices everyday prices are about half of what the big companies on groupon charge. (which is what their sale is) That's what I'm comfortable with and I do a lot of volume. There are 2 ways of thinking. There is the Wal-mart way, which is to to sell 10 shirts at a dollar each or the high end way to sell one shirt at 10 dollars. Each one makes 10 dollars. It depends on who you ware wanting to sell to. You have to know who your client is and how much they are likely to spend. That's how I'm getting such huge volumes. I'm selling to people who wouldn't purchase the single at $60, but they will buy 2 at $30. After all my expenses, including labor, I till walk with about $18 for each one in profit. so I would make $36 on the two pieces. I also pay myself the wage for manufacturing, but I separate it in the books so I can track everything so that I can expand later (hopefully this holiday season)


----------



## sonic306090 (Jul 4, 2013)

This is Retail Pricing - 
Screen Charge is Kinda High, I would do 20.00 Screens & 2.00 per color printed. Mark up shirt 100%

the above will give you about 8.00 per printed shirt 1 color - S-XL


----------



## platnumcn (Aug 5, 2013)

I believe that you cannot find a sound pricing for yourself till you get your manufacturing cost corrected. You would have to find all the places, where there is a deal on all the aspects of t-shirt production. Again, your investment in the business is also something, which you cannot ignore to get the right deal. If you do not make high investment, you cannot expect to get your pricing down from day one. You will have to keep it at par to make sure that you meet the next manufacturing cost.


----------



## Printavo (Oct 7, 2007)

Example pricing sheet from my blog: http://blog.printavo.com/wp-content/uploads/2012/11/Example-Screen-Printer-Pricing-Sheet.xlsx


----------



## sparkyfirepants (Aug 11, 2011)

I read a book called, "Pricing for Profits" by Mark Goodridge. He covers everything you could ever think of in pricing and gives sound explanations that work for a profitable business.

My favorite quotes is: _The point of a job cost estimating system is not to win every job you quote on. It's to make a profit on every job you print._

That's our Cardinal Rule here. Every job must be profitable. Also: 

_"If the client doesn't break into a sweat when you tell him the price, then you didn't charge enough." - Scott Fresener and Charlie Taublieb_

So I took the book and created a spreadsheet with formulas for labor, overhead, shipping, etc, and those always stay the same. Then I plug in variables for each job like shirt cost, number of shirts, ink colors, etc.

That kicks out a per-shirt cost. Then I talk it over with my partner, and we discuss things like who the customer is, is this a potential long-term relationship or a cheap price-shopper? Then we might tweak it from there. It's never just a simple formula game.

There are many ways to price and what I'm learning is that each shop is different. 

Our overhead is less than other shops, but two of us do all our sales, printing, sourcing, marketing, etc. So one week we might spend more time doing non-billable activities than another week. That has to factor in to your price as well.

Sometimes the best thing to do is dive in, set some pricing as best you can, see how it goes - and then tweak it later if necessary. It's going to change again, I promise.


----------



## jolenes (May 26, 2013)

I have few tee designs with zippers and sewn in logo (no printing at all) and I'm struggling with the price. There are some basic shirts with some (basic)) printed photos and the price is like £30-£40 so my logic is that my tees should cost more. But then again, if I put tees for £50-£60, it might be too expensive for people. My designs are quite unique and I haven't seen those kind of shirts yet (!). I know it's up to me, should I risk or not but I'm also aware that I'm not Yeezy (Kanye West) to put prices up to $120 lol.

Maybe ANY SUGGESTIONS how to start? How do you put your prices up? I believe once people start to feel your brand, they won't be able to change...


----------



## dale911 (Jan 25, 2012)

jolenes said:


> I have few tee designs with zippers and sewn in logo (no printing at all) and I'm struggling with the price. There are some basic shirts with some (basic)) printed photos and the price is like £30-£40 so my logic is that my tees should cost more. But then again, if I put tees for £50-£60, it might be too expensive for people. My designs are quite unique and I haven't seen those kind of shirts yet (!). I know it's up to me, should I risk or not but I'm also aware that I'm not Yeezy (Kanye West) to put prices up to $120 lol.
> 
> Maybe ANY SUGGESTIONS how to start? How do you put your prices up? I believe once people start to feel your brand, they won't be able to change...


I'm obviously not your target market. I have over 200 tshirts in my closet, but none of them cost me over $15. I'm not sure how that translates to your currency but I think it's still well over the US exchange. The problem with what you are doing is that you don't have any kind of name to say that your designs are worth more. Your best bet if you think you have something unique is to document your work and then shop it to the clothing companies at a tradeshow and see if someone wants to buy your designs and put it under their brand. The major "designers" out there didn't make it because their stuff was that much better than anyone else. They made it because they knew how to work the business. It's harder to become a famous designer than it is to be a professional sports star because there are so many fewer out there. Good luck.


----------



## Micki23 (Jul 9, 2013)

I agree - famous to designer is easier than designer to famous. Most famous designers have worked 20+ years to achieve overnight fame! The rate of exchange for pounds/dollars used to be around 1.5 time - 3 pounds is 4.50 dollars.


----------



## sgosline (Aug 4, 2006)

I have been struggling with this myself. This is a tentative work sheet, I have not made it "policy" yet and it may need some tweaking.
*Screen Printing- Pricing depends on number of articles, number of colors, number of locations and if any artwork needs to be done. Camera ready vector art usually does not need any modifications. Jpeg and related files need to be high resolution. If you do not have high resolution artwork an art fee* may apply.*
*For customer supplied items there is a surcharge and we do not take any responsibility for damages or mistakes. If it is our mistake we will try and replace the item with a similar item.*
*5 shirt minimum**- $20/color screen charge, also applies to different size logos (for example small 2 color logo on front, large 2 color logo on back is 4 screen charges*
*These prices do not include the cost of the apparel*
*5-24 25-48 49-72 *
*$1/color/location .90/color/location .80/color/location *

*72-99 100 or over shirts*
*.70/color/location .60/color/location*
*More than 200 shirts screen charges *
*are waived*
**Depends on complexity of design and how much work is entailed. Please discuss with our graphic designer*
***For less than minimums we have other imprint options*
*I can't seem to get this formatted correctly. I'll try and add as attachment*
I know that different areas are need to be more or less competitive but like I said, this is a starting point. I am trying to encourage the larger orders. We have a 6 station manual press and have to pay our screen printer.


----------



## Preston (Mar 21, 2006)

Most all our work is contract and this is our current fine print for them.


Pricing is per location and for printing only.
Screen setup charges are $9.00 per screen. 
If printing on dark garments add $0.20 per location flash charge.
4 Color Process or Simulated Process minimum is 72 pieces.
4 Color Process set-up fee is $50 and up
Add $10.00 for ink change on less than 36 pieces per color.
Add $0.25 per item for printing on 100% poly.
We are not responsible for color bleed on 50/50 or 100% poly items.
Add $.15 per location, per garment for print on pockets, sleeves and panties, hoodies, etc.
Add $.25 per garment for nylon.
Normal production schedule is 7-14 Business days to ship.
Production Clock starts when artwork is approved, items are in our shop and jobs details are approved.
Rush service, if available (Ship 4 days or less after production clock starts) at +50% invoice total.
Reorders will be subject to minimum print charges and screen setups will apply again. 
Above prices are for the printing only on your garments, and are per location.
All Jobs are COD payable by check or cash. No credit cards accepted.


----------



## ELTS (Jan 16, 2013)

First off, I don't wish to make any enemies here so this is just my .02 cents. Take it for what it's worth.

I have heard a bunch of screen printers try and sell you on "knowing your costs" to create your pricing. I personally think this is the most ridiculous thing I have ever heard.

Your customer couldn't care less about what your "costs" are. The market is what the market is. In other words, a white Gildan 2000 with a one color black print on the front is going to be $10.00 (QTY12)
no matter what your costs are. In other words, call around and see what your competitors are charging - YES, look at someone else's price sheet - and start there. If you cant charge what your competition is charging - because your costs are too high - then lower your costs. Or, try to explain to your customer why you need to charge $2.00 more because your costs are higher. Pa-lease!

Pick three different order combinations. i.e.; 
1 color front 3 color back
2 color back
4 color front

Then pick 5 competitors. Put together a chart and see where you want to be. Don't forget to consider your custom inks, rush order tees, ooshirts, etc.

If you think that customers aren't migrating towards the internet then you don't know your industry.

As far as our business model is concerned, we don't make money on the garments. In other words, a Gildan 2000 may cost us $2.29ea. We charge $3.00 for it. If it's a ship to item we charge $4. Enough to cover the cost of shipping it to us.

We make our money in "printing" shirts. So this way we only have to deal with the printing costs. Based on a qty of 12 we charge $7.00 for a one color print. $3 for the shirt, $7 for the printing, $10.00. If you can get $12 because you have higher "costs" than more power to you!!!


All the best!


----------



## Preston (Mar 21, 2006)

ELTS said:


> First off, I don't wish to make any enemies here so this is just my .02 cents. Take it for what it's worth.
> 
> I have heard a bunch of screen printers try and sell you on "knowing your costs" to create your pricing. I personally think this is the most ridiculous thing I have ever heard.


And that is why the t-shirt decorating business is full of low-ballers. Not saying you are but people not knowing their cost and just pulling pricing out of their butt to fit in with the other shops in the area has hurt this industry more than you can imaging.

Knowing your cost is the first thing you need to understand if you want any clue as to how much if any money you are actually making. If your cost put you out of the market range for your selling price then that is telling you that you need to reduce your cost.

If you went to any business school and told the teacher you did not need to know your operating cost, they would fail you on the spot.

Personally I have found that knowing my operating cost has made me more competitive and more profitable so you can say what you want.

I think most people skip the cost annalist because it is just easier to not go through the math. But they fail to realize that even if they do not use the info now they will need it if they ever try and get a business loan down the road for expansion. If you walk into a bank and try to get a business loan on your 5 year old business without being able to show them your PL statement with operating cost, they will send you out the door empty handed. Your choice.


----------



## ELTS (Jan 16, 2013)

Preston said:


> And that is why the t-shirt decorating business is full of low-ballers. Not saying you are but people not knowing their cost and just pulling pricing out of their butt to fit in with the other shops in the area has hurt this industry more than you can imaging.
> 
> Knowing your cost is the first thing you need to understand if you want any clue as to how much if any money you are actually making. If your cost put you out of the market range for your selling price then that is telling you that you need to reduce your cost.
> 
> ...



Good points. However, I didn't say you don't need to know your costs. Of course you need to know your costs.

Now...here is something to consider. This question is obviously for new people in the business. I would like you to tell me how they are supposed to know what their costs are. They probably don't have a conveyor and if they do they need to run it for a couple months before they can get an idea of their electric bill. They don't know how much chemical they are using, they don't have a hold on how often they will be re-screening screens. Please tell me how someone is going to figure out their costs.......In the mean time they need to charge something. Where are they going to get that figure?


----------



## sgosline (Aug 4, 2006)

I think this is the most helpful post I have read on this subject. I spent 2 days following our screenprinter around, writing down everything that he did and how much time it took him plus tried to get some idea of amount of ink used, etc, and other supply costs. What a waste of my time! I still could not figure out what our cost was to do a job. Part of the time he was working on artwork for one job. Another time he was doing the actual screenprinting but would have to take breaks to talk to customers and then he spent one half day reclaiming screens. I gave up. I think we will check the competition, figure out how much we can afford to pay our screenprinter and probably cut his hours down to where he is busy all the time, and maybe have my son do the screen reclaiming-cheap child labor 



ELTS said:


> First off, I don't wish to make any enemies here so this is just my .02 cents. Take it for what it's worth.
> 
> I have heard a bunch of screen printers try and sell you on "knowing your costs" to create your pricing. I personally think this is the most ridiculous thing I have ever heard.
> 
> ...


----------



## Preston (Mar 21, 2006)

ELTS said:


> Good points. However, I didn't say you don't need to know your costs. Of course you need to know your costs.
> 
> Now...here is something to consider. This question is obviously for new people in the business. I would like you to tell me how they are supposed to know what their costs are. They probably don't have a conveyor and if they do they need to run it for a couple months before they can get an idea of their electric bill. They don't know how much chemical they are using, they don't have a hold on how often they will be re-screening screens. Please tell me how someone is going to figure out their costs.......In the mean time they need to charge something. Where are they going to get that figure?



Very easily.

They know their rent cost. Even if they are printing from home they need to use a percentage of the rent/mortgage cost as their monthly rent cost.

They know their equipment cost and can figure how much a month they need to put away for equipment replacement, repairs and upgrades.

Figuring the electrical cost to run equipment is so easy a 2 year old could do it. Take your electric bill, look at the total KW hours used. Now take the total amount of the bill and divide it by the KW hours. So if their bill is $40.00 and the KWH used was 363.6 KW Hours it would be $40.00 / 363.6 = $0.11 cents per KWH. Now just get the info from the equipment. If you have a 1600 watt flash then it will use 1.6 KW per hour so 1.6 * 0.11 = $0.17 per hour to run it. If you left it on for 8 hours it would cost you $1.40 

For re screening or replacing the standard figure is a screen is good for 20 set-ups. We all know you can get way more use than that but it is a good figure to use in your expenses as it helps cover unforeseen things such as busting a screen after a few runs.

There is nothing you cannot calculate from the get go without even printing one shirt yet. As time goes on you can fine tune the figures as more info about your shop and how much you can produce becomes available,


----------



## ELTS (Jan 16, 2013)

Preston said:


> Very easily.
> 
> They know their rent cost. Even if they are printing from home they need to use a percentage of the rent/mortgage cost as their monthly rent cost.
> 
> ...



After all that is said and done, your still going to charge what is standard in the market.


----------



## Preston (Mar 21, 2006)

ELTS said:


> After all that is said and done, your still going to charge what is standard in the market.


No I am not. I charge more for somethings than the surrounding market and I can get it because I offer services and quality others around me do not and I charge less than the surrounding market on other things because I know my cost and I know I am making good money at those prices.

But that is besides the point. The point is if you are doing this as a business you absolutely must know your cost,per hour, per day, per month and per year. And then you must use that info to set your pricing or streamline your business. If you cannot grasp the concept or are not willing to do the math then you are in reality a hobby business and real businesses could blow you out of the water any day of the week if they needed to.

I just for the life of me cannot understand why it is so hard for people to grasp the fact that you must know your cost before you can know if you are actually making any money.

I think most call around and get pricing from other shops because they do not know how to price in the first place. They think they can get more work by charging a few cents less per and all will be good. But if the shops you called go out of business in a year and you where using their pricing to base your pricing off of then where does that leave you? Also you call around and have no clue if the shops you called to see how things are priced also used the "call the other guys and base off them" method of coming up with their pricing.

Lets just say we both give quotes on the same job. You use your "Sounds like the market rate" method of pricing and I base my pricing on my cost. 10 to 1 if it is a large job I will get the work and make a lot of money while you are on the forums asking everyone how can he do it for that price. I see those comments all the time on forums and when I do, I run the numbers and see that I can make a lot of money doing it for the price everyone else cannot believe. But I know my cost and I know my production rates. And if I do not get the job at least I know you are not making anything on the job and it is best I did not get the work.

Whether you grasp the concept of needing to know you cost or not does not change the fact that it is business 101 to know.


----------



## ELTS (Jan 16, 2013)

Preston said:


> No I am not. I charge more for somethings than the surrounding market and I can get it because I offer services and quality others around me do not and I charge less than the surrounding market on other things because I know my cost and I know I am making good money at those prices.
> 
> But that is besides the point. The point is if you are doing this as a business you absolutely must know your cost,per hour, per day, per month and per year. And then you must use that info to set your pricing or streamline your business. If you cannot grasp the concept or are not willing to do the math then you are in reality a hobby business and real businesses could blow you out of the water any day of the week if they needed to.
> 
> ...


Well said. I will leave it at this. We have been in business for almost two tears (December) We had our best month this month (schools). We have customers from New York to California. We are an internet based printer. Guess what....I have no idea what my <printing> costs are and I could care less as long as the number on the top (income) is bigger than the one on the bottom (expenses) in quickbooks.

Please don't mistake that I can look at my line item costs on every singe thing we spend money on (ink, emulsion, tool free number, etc)

But I am not going to raise my prices. I will still charge $10.

We survey our customers when they place an order. About 50% of them are referral, 50% found us online. Of the 50% online they have received other quotes and went with us because we were cheaper. We don't charge set up fees, screen fees, free artwork assistance, and we offer FREE shipping.

It's working so far..


All the best!


----------



## ELTS (Jan 16, 2013)

One last thought...

Shop A has 2 automatic machines, 10 employees, 3000 square feet shop.

Shop B has a manual press, and runs it out of his garage.


Do you think the customer gives a crud what the "costs" are for shop A?

They want 12 shirts, one color. The price should be the same, or pretty darn close. If shop A charged based on it's "costs" then it should forget getting the customer right now.


----------



## sparkyfirepants (Aug 11, 2011)

ELTS said:


> Well said. I will leave it at this. We have been in business for almost two tears (December) We had our best month this month (schools). We have customers from New York to California. We are an internet based printer. Guess what....I have no idea what my <printing> costs are and I could care less as long as the number on the top (income) is bigger than the one on the bottom (expenses) in quickbooks.
> 
> Please don't mistake that I can look at my line item costs on every singe thing we spend money on (ink, emulsion, tool free number, etc)


I'm curious, when you go over your Quickbooks, are you taking labor costs into account?

It's great that you track hard costs like materials and your toll-free number, but are you tracking your costs in regards to time?

If you aren't including those costs now, what happens when you expand (hopefully you do) and you need to hire employees? You'll be paying out those new costs but that will be a problem if you say you don't want to raise your prices.

Even though we're a two-person shop now, we factor in labor for everything from coating screens to cleaning screens. The customer never sees those cost calculations and we don't charge "set up fees," either. To them, it's all included – but we do account for them internally. 

I agree with you that the customer doesn't care or need to know about all your costs. They just want to know how much their shirts cost. True enough.

However, setting your price based on _your_ costs is essential to your future success. You may work out of a garage now (we do), but hopefully you won't always be the dude working out of your garage for cheap.

Here's how we learned about pricing jobs. I used to work for a litigation support firm. We quoted projects every day. Sometimes attorneys would balk at our pricing and go with somebody on the cheap who was probably working out of his garage by himself with freelance labor.

Most of the time, they didn't go with the cheapest. They could see the value we provided and were willing to pay for it. Then, there were the ones who went on the cheap who would come back to us on their next trial, sometimes with disaster stories of working with "the guy out of his garage."

We've taken this philosophy into our screen printing business. Our philosophy is that each job we quote has to be profitable. If the customer feels it's too expensive, we try to help them find ways of lowering their cost (one color instead of two, Gildan vs premium Am Apparel, etc). Many times we get these jobs, quoting against "cheaper" shops. We've even won business away from those $6 cheapo online VistaPrint types. So it's not necessarily true that people always want the cheapest.

I've also sent customers to other local shops because we couldn't beat their price and stay profitable. When we calculated our costs, we would have been doing it for free – or worse, paying for the privilege of printing shirts. It sucks when that happens, but we would rather be profitable. And if we dropped our price at first blush, we wouldn't be able to raise them later with those customers who just want it cheap. Thankfully, some of those customers have come back to us later, and they gladly pay _our _price.

So we are wary of just pricing based on the market and being the cheapest. It's not our bag. It sounds like it's yours, and you're successful at it. But I have to say I believe this is chancy and you can't sustain it forever.


----------



## Fuzzyfreak (Sep 24, 2013)

Yasirm86 said:


> I provide only silk screening no heat press


One word "SPREADSHEET"! Cost of doing business goes up,Price per piece goes up! The programs also will give discounts based on volume of production and return business clients. That way you can adjust to the financial climate in your area. Good luck!


----------



## ELTS (Jan 16, 2013)

sparkyfirepants said:


> I'm curious, when you go over your Quickbooks, are you taking labor costs into account?
> 
> It's great that you track hard costs like materials and your toll-free number, but are you tracking your costs in regards to time?
> 
> ...


I will tell you, this is very well said. I hope your business plan works for you.

I have an idea, Lets all meet back on this thread in 3 years and swap stories of how things are going. It would be fun and interesting to see how these business plans are working out.


----------



## ELTS (Jan 16, 2013)

Here's a fun challenge to those who are so into pricing based on your costs.

Here is a sample order:

Shirt: Gildan 2000
Color Black
Print - 1 color front
Ink color - White


How much would you charge for this order and what are your cost to do the order? You should already have your "costs" calculated so it shouldn't take long.

Our price is $10.00 per shirt. Thats a total of $1000.00
Shirt cost - $2.29 - $229
Ink cost - $2.00
Labor - 2 [email protected]$15per - $30
Electricity - $5.00
Re-claiming - $2.00
Shipping - $25
Space rent - $4.00 ($1500mo / 24hours in a day divided by 30 days ($2.8 per hour)
Total costs - $297
Total profit - $703.00

Did I forget anything? If you are loosing money in screen printing, get out and do something else. Period!

I could analyze my costs until Monday, but I am still charging 10.00 per shirt for this job. If you are charging more, you MAY get the job but when your customer finds out they overpaid, they won't be back and the 20 referrals won't arrive either. Unless your customer service is out of this world, I would have a back up plan.

Good luck!!


----------



## Preston (Mar 21, 2006)

ELTS said:


> Here's a fun challenge to those who are so into pricing based on your costs.
> 
> Here is a sample order:
> 
> ...



Well, yes you did. First off in your time did you include all the time and not just the printing time? Like dealing with the customer, art, ordering, receiving, and all the other little things?

On the shop cost do you run your shop 24 hours a day? If not then you do not divide the monthly cost out like you did.

If you run 8 hours a day, 5 days a week then your cost per hour for your rent is around $9.38 or $18.76 for the two hours it took you to do the job. So you need to recover that $18.76 out of that job.

What about phones, transportation, office supplies, insurance, equipment replacement cost, equipment maintenance cost, future upgrade/expansion cost and things like that?

No one is debating if you are making money or not but only the fact that you need to know your true cost so you know what you really made off the job.

My shop cost is $45.00 per hour. That is what it cost me to keep the lights on and includes all those expenses. For the job you mentioned, dealing with the customer to product out the door would take us about an hour tops. We would sell the job at $6.04 per shirt everything included. Shop cost plus consumables for the job plus shirt cost we would be at around $260.00 so that works out to around a $344.00 margin on the job and that would work out to $688.00 if I did two of these jobs in 2 hours. So you see we are real close to the same per hour margin only I am selling the shirt for almost $4.00 less.

Now if I where to sell it at your $10.00 per shirt rate then I would make around a $740.00 margin in that same hour or $1,480.00 over a 2 hour period doing jobs like that.

My shop expenses include equipment replacement and equipment upgrade cost into it so in reality if I was not putting that money aside I could say I was making more off the job. 

All that aside the main issue is if by chance we where both bidding on the same job I would have a better understanding of what it would cost me to produce the job then you would, As a result I would know if I could underbid you and get the job while still making money. If you tried to underbid me without knowing your true cost then you would just be guessing and hoping it would all work out.

The point is, whether you agree with it or not, as business owner you must know your hourly, weekly and monthly cost of doing business.


----------



## ELTS (Jan 16, 2013)

Preston said:


> Well, yes you did. First off in your time did you include all the time and not just the printing time? Like dealing with the customer, art, ordering, receiving, and all the other little things?
> 
> On the shop cost do you run your shop 24 hours a day? If not then you do not divide the monthly cost out like you did.
> 
> ...


LOL! I'm actually embarrassed. I put the wrong specs on there 
this is what I get for posting while working!!!

I meant to put 12 shirts. I based it on 100 shirts (loops)
Our price is $10.00per for 12 shirts. Our price on 100 shirts is $7.50per

Sorry bout that. Either way, it's impressive that you know all your costs - it really is - but my point of the story is, a new person in this business isn't going to. And even if they do they won't be accurate. For example:

A newbie doesn't have every ink color that is made so for quite a few orders they are ordering $30 worth of new colors every order they get. Ink costs can be spread across how many jobs are done with that color.

Anyway. All good stuff! I'm done with this. Time to move on.

Until next time.


----------



## Preston (Mar 21, 2006)

ELTS said:


> LOL! I'm actually embarrassed. I put the wrong specs on there
> this is what I get for posting while working!!!
> 
> I meant to put 12 shirts. I based it on 100 shirts (loops)
> ...


You are right, a newbie is not going to try figure their cost at first because they do not know they need too and they do not know how. It does not really matter if they get it right or wrong at first but if they start off doing it then they will get it dialed in.

Buying $30.00 worth of ink to do a $40.00 job is not loosing money because as you stated they will not be using the entire $30.00 worth of ink. The same goes for buying the press, screens, film printer and every other thing that is used over a lot of jobs. But you also need to make enough to replace all that stuff when it is used up or worn out. The thing about figuring your cost is that it will never be exact for each job but the idea is to get it close enough so the overall figure averages out. 

The biggest problem with this industry is there is very little information available to help those that are new to the business price things and learn to figure their cost. I intend to change that.

For me, I would not even turn the lights on for a 12 shirt one color job but I would throw it in the mix during the day if need be as it would only take about 2 minutes on press so if I had an extra head free when setting up a larger multi-color job it would not take anything to stick that one color job in the mix at the same time.


----------



## earlhines (Oct 1, 2013)

Preston said:


> Figuring the electrical cost to run equipment is *so easy a 2 year old could do it.* Take your electric bill, look at the total KW hours used. Now take the total amount of the bill and divide it by the KW hours. So if their bill is $40.00 and the KWH used was 363.6 KW Hours it would be $40.00 / 363.6 = $0.11 cents per KWH. Now just get the info from the equipment. If you have a 1600 watt flash then it will use 1.6 KW per hour so 1.6 * 0.11 = $0.17 per hour to run it. If you left it on for 8 hours it would cost you $1.40


I have a 2 year old, and he can not do this. Jesus, I can't even do this. You just math geeked all over the place and the majority of human beings will take at least 5 reads of this to understand what you just did. Just sayin'.

With that said, Preston, you are SPOT ON in your business assessments regarding understanding your costs. It's absolutely imperative. ELTS is absolutely wrong in his assessment. I mean sure, anyone can do it his way, but they will be substantially less successful in the end. He just doesn't see it yet, but that's what makes the business world so awesome. The more prepared and fiscally responsibly businesses will always rise to the top in the end. Thanks for reminding me how important calculating costs are. I'm guilty of letting things slip at times.


----------



## calhtech (Feb 4, 2012)

ELTS said:


> Here's a fun challenge to those who are so into pricing based on your costs.
> 
> Here is a sample order:
> 
> ...


What kind of market are you in? I just quoted a 170 piece 2 color front an back at 7.00/ea. I was higher than 2 of my closest comp. and they still found somebody else (that I did not know about) who beat the price $1.50/ea. Its dog eat dog here man. $5.50 for 2 color front and back!!! I only wish I could get $10/pc for 100qty...


----------



## Fuzzyfreak (Sep 24, 2013)

You're so on it and it is the same here depending on the design. Straight forward stuff it is exactly that way and it's universal to the shirts you purchase.


----------

