# The cost of POD in general



## robdeth (Sep 30, 2008)

I'm seriously confused as to why the basic shirt costs for the POD sites are so high. I mean it seems that their business model is designed around selling one shirt to one person (i.e, I want to design a shirt for myself) rather than someone being able to sell shirts to the public. 

Some POD sites have a basic black shirt price of $21.99! (and a 10"x10" design limitation). You can buy "all over print" tees online all day long for $24.00 to $30.00 from the most popular designers.

Maybe I'm missing something but:

Wholesale priced shirt=$2.00
POD service printing cost=$19.99?

Please someone, school me here. I just don't get it.


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## splathead (Dec 4, 2005)

Who has a basic black shirt for $25?


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## joeshaul (Mar 1, 2008)

I haven't researched much into PoD sites, but most seem to have fairly top end websites which cost a pretty penny to maintain as well as host. 

Part of the price is the fact that they're so big and well known. They're basically charging the customer for the advertising rather than the designer. 

I'm also unsure if your pricing is based on buying the shirt with the design, or the base price, but if it's buying, the designer expects some profit too from these sites, thus they have to mark up whatever Zazzle or whoever charges. 

Since a lot of these are designed to be one off types of things, they most likely utilize DTG and Dye Sublimation, both of which have a fairly expensive price tag on inks, especially on DTG for darks which requires a white underbase. 

Now, some of these costs are offset because I'm sure they're getting better discounts for the bulk purchases they make, but part of wanting custom is higher price. If you think the price is too high and you're just getting t-shirts for a local event or something, by all means shop someone local to print the shirts for you, it'd make the small print shops like myself a lot happier as well. If you think you have a design idea to market locally and possibly globally, do the same, you'll get the design printed for much cheaper, but you'll have to up your selling/marketing game. 

In my opinion and in closing: These sites are more or less built for mass marketing a design to millions of people. Eventually they may price themselves out of the market, but apparently the demand is still there.


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## robdeth (Sep 30, 2008)

splathead said:


> who has a basic black shirt for $25?



Sry...$21.99...point still stands however. $22.00 (to me) is more like a retail price. I get the marketing advantages of using the popular POD sites, but even that, do a generic search for something at CP. You'll be bombarded with less than "quality" designs. I'm sure there's quality stuff on there, but will someone take the time to find it? So even the marketing advantage is questionable.


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## robdeth (Sep 30, 2008)

Thanks for the explanation. The insane pricing structure for the popular POD sites are just frustrating as low run POD fits what I need, but I can't get away with charging over $25.00 a shirt to reap a $5.00 profit.


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## Rodney (Nov 3, 2004)

> Maybe I'm missing something but:
> 
> Wholesale priced shirt=$2.00
> POD service printing cost=$19.99?
> ...


The main missing point here is that the POD is not printing "wholesale", they are printing "on demand". That's without any investment, _risk_, or overhead for the person who wants to sell a t-shirt design.

So in that $21.99 includes not only the blank t-shirt. It also includes the printing, payment processing, hosting, customer service, employees, electricity, phone lines, marketing, etc, etc, etc.

There are people who are marking up products there above the base price and are still making money. 

The people buying $30 all over prints aren't the same customers that buy the t-shirts from the sellers at cafepress. So they don't have to really worry about that market.

Why would someone pay that for a t-shirt? Because the seller is selling an original design that the customer wants and can't get anywhere else. 

Sure, there are some lower quality designs in the marketplace, but there are also some top quality designs there. Not all sellers are in the marketplace. Some just drive their own traffic and sit back while cafepress/zazzle/spreadshirt'printfection/etc does all the order taking, printing and fulfillment.


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## robdeth (Sep 30, 2008)

Rodney said:


> So in that $21.99 includes not only the blank t-shirt. It also includes the printing, payment processing, hosting, customer service, employees, electricity, phone lines, marketing, etc, etc, etc.


Absolutely, I understand the operating costs associated with actually producing the shirt. The explanations are spot on from the shirt producers part of the business, but what about the designers? 

No one is selling blank tees to end customers for $21.99. The design sells the shirt and if I can't get to a final retail price that falls within the market range of available "like" products using POD and still make a 3-5 dollar profit then I just don't see the point of using the POD service.

I guess what I'm asking is why is the designer the one cutting their profit margin in order to get the final shirt price to market average? Is there really $20.00 worth of associated costs and acceptable profit for the shirt producer per piece? 

I mean...is this out of the realm of reality for POD:

Basic black shirt -$15.00
Designer profit - $5.00
Shipping cost - $4.99

Final cost to customer - $24.99 (acceptable market price)


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## splathead (Dec 4, 2005)

robdeth said:


> I guess what I'm asking is why is the designer the one cutting their profit margin in order to get the final shirt price to market average? Is there really $20.00 worth of associated costs and acceptable profit for the shirt producer per piece?


That's just the nature of POD. Obviously, there are hundreds of thounsands who are just fine with this arrangement. Those that aren't have their own site.


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## robdeth (Sep 30, 2008)

I agree. There are plenty of people who are content with the pricing arrangement, but no one has really validated ( to me) the basic shirt costs of some of the top POD providers (which was the point of my original post). If the answer is "they're successful" then cool, I'll accept that. But I was hoping to get some insight from the printers perspective. Are their $22.00 worth of associated costs and acceptable profit built into that number? How does that break down...is it $7 cost/$15 profit?

The POD sites latest marketing would suggest that their trying to move their store sales (through design quality) to the forefront while still maintaining a one off, low run, specialized event, etc., option. I just don't see how that's feasible when they're basically charging a retail price to a potential designer, in effect crippling the whole effort.


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## Rodney (Nov 3, 2004)

> I guess what I'm asking is why is the designer the one cutting their profit margin in order to get the final shirt price to market average? Is there really $20.00 worth of associated costs and acceptable profit for the shirt producer per piece?


Because the POD is taking the majority of the risk (and costs) in a POD relationship.

If the designer wants to make more, they would just need to take on more of the risk to get t-shirts produced (get their own shopping cart, buy t-shirts printed in bulk, etc).

There's a tradeoff no matter which way you go. With a POD, you trade off decreased risk and investment for decreased profit. 

Buy doing it all yourself, you trade off more control and profit for more risk and investment.



> I mean...is this out of the realm of reality for POD:
> 
> Basic black shirt -$15.00
> Designer profit - $5.00
> Shipping cost - $4.99


Probably so. Because not only does the POD have to cover its costs (which I mentioned above), but it also has to make a "profit" _above_ those costs in order to stay in business for long.



> I guess what I'm asking is why is the designer the one cutting their profit margin in order to get the final shirt price to market average


Because the designer is the one taking the least amount of risk and putting in the least amount of investment in a POD type relationship.



> I just don't see the point of using the POD service.


One of the points would be to bring a lot of designs to market on a wide range of products with little to no investment, no inventory issues, no shopping cart/hosting/customer service to do. Every sale that comes in is pure profit. You can sell 1 t-shirt or 100 t-shirts in a day, and still go about your life without having to lift a finger to produce or ship those goods.

Again, the tradeoff to all that is that there is decreased control over quality, less control over pricing, etc.



> Are their $22.00 worth of associated costs and acceptable profit built into that number?


Without knowing the costs (overhead) for the large sites like CafePress/Zazzle/Printfection/Spreadshirt/etc, it's almost impossible to give you the breakdown you're looking for.

Each business has a different amount of overhead to run. Smaller POD companies may have a smaller amount of overhead, so they may be able to offer slightly lower base prices.


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## Solmu (Aug 15, 2005)

robdeth said:


> Are their $22.00 worth of associated costs and acceptable profit built into that number?


You can only define acceptable profit by what the market will tolerate. There are multiple companies in this market (meaning, no monopoly issues to contend with), and they are thriving. Therefore, by definition, the answer to your question *must* be "Yes, there are $22 worth of associated costs and acceptable profit built into that number."


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## robdeth (Sep 30, 2008)

Very informative responses. Thanks! 

I still question the risk as the primary justification of the basic shirt cost however. If no one buys the shirt...it isn't printed, thus drastically lowering the risk to the POD provider...right? 

To me, the POD market seems wide open for someone willing to treat the users of their services as resellers rather than end customers.


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## splathead (Dec 4, 2005)

robdeth said:


> To me, the POD market seems wide open for someone willing to treat the users of their services as resellers rather than end customers.


I think you would be the perfect candidate.


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## Solmu (Aug 15, 2005)

robdeth said:


> I still question the risk as the primary justification of the basic shirt cost however. If no one buys the shirt...it isn't printed, thus drastically lowering the risk to the POD provider...right?


Nope, wrong.

Server costs. IT workers. Press workers. Printer maintenance. Janitors. Packing and shipping department. Management. Warehouse rental. Utilities. Equipment investment. Blank shirt storage. Ink. Heat presses. Money tied up in shirts. Shelving. Web designers. Graphic designers. Marketers. Google ads budget. Other advertising outlets. Mailers. Franking machines. Customer service operatives. Computers. Phone banks. Accountants. Payroll. Software. Software development. Complaints department. Product development. Training. _aaaa_nd so on.

In a word, overhead.

The risk isn't whether or not someone buys _this specific_ design, the risk is whether or not someone buys _any_ design.

These are huge operations, it costs thousands of dollars just to open their doors for each day.


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## Continental USA (Jun 13, 2006)

Very interesting thread. Maybe the most interesting one i have ever read. Well done all! There seems to have been a huge growth in POD services in the last few years. What is the ideal situation for all parties concerned i wonder?


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## robdeth (Sep 30, 2008)

Every time i try and get outta this thread....they drag me back in .

I knew someone would hit me with the inevitable "business 101" reply sooner or later. Yes....there's a risk and cost associated with any business venture...kudos for throwing janitors in there. I had forgotten that one.

However, listing a generalized cost of business matrix doesn't necessarily justify the basic shirt cost as you could jack that price up to $100 for a blank tee and that would still fall within the "cost of business" explanation.

My point was/is that the basic shirt cost of the major POD providers is too high to achieve their stated goals for business growth (increased store sales, expanding beyond just "one offs"). The basic shirt cost coupled with design limitations are the reason their coveted market pages are chocked full of clip art, poor designs and cliched phrases. 

As an example, I just saw a "featured" design on a popular POD site that was taken directly from a photoshop tutorial. Not redrawn from the design, but the actual image from the tutorial. This is what you get when you charge retail prices to a "designer"...copy and paste. 

I'll say it again...if your POD "bread and butter" is one offs...then rock on. ....charge whatever you want for a basic shirt. There's always a market for someone who needs a one off photo on a tee of their pet or whatever. But if as an added goal, you'd like to sell multiple designs to the masses, you're going to have to provide the proper incentives to actual designers (i.e, in the form of lowered basic shirt costs).

one million different designs sold to one million different people=$

+ multiple designs sold to one million people= priceless?


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## robdeth (Sep 30, 2008)

Hopefully, tongue in cheek . Unfortunately for me at least, you're correct. I'm old school I guess in that I believe, more often than not....the shirt designer and the printer are usually not the same person. I think both are unique skill sets.

On the other hand, we're not trying to manufacture cars. It wouldn't cost me millions to "tool up". The same exact printing methods that some of the POD providers use are available/affordable to me.

I could print shirts, would rather not...but will if I have no other viable option.





splathead said:


> I think you would be the perfect candidate.


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## Rodney (Nov 3, 2004)

> My point was/is that the basic shirt cost of the major POD providers is too high to achieve their stated goals for business growth (increased store sales, expanding beyond just "one offs").


I'm not sure that is a "fact". 

It may *seem* that way, but I think people are using POD services to make good money every day. 

It's just a matter of realizing that it is a tool for a certain business model. If it's not an attractive business model for your business, then it's easy enough to choose another.

But I don't think it's accurate to say the prices are too high for anyone to make money. That's just not true.




> The basic shirt cost coupled with design limitations are the reason their coveted market pages are chocked full of "lifted" clip art, poor designs and cliched phrases.


I don't think the price has anything to do with what shows up in their marketplaces at all.

You don't even have to use their marketplaces to be successful using POD services. 

Many of the best stores don't even show up in the marketplaces.


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## robdeth (Sep 30, 2008)

I'm not suggesting you can't make money using a POD service. Obviously, it can and is being done everyday. I'm simply offering a perspective from someone who should be using a POD service, but isn't and some of the reasons I'm not. 

The part of the post regarding business goals are interpretative on my part. Some of the marketing and changes in service suggests to me, that the goal is to increase sales in the area mentioned. My comments are my take on the problems with that (as I see it).

Just good discussion (I think). The POD providers are hugely successful and from my personal exp., provide quick, quality service.

First and foremost, I'm a huge fan of the POD concept. I just feel there's an opportunity that's not being addressed.


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## Rodney (Nov 3, 2004)

> Just good discussion (I think)


I agree  Some interesting points have been brought up.



> I just feel there's an opportunity that's not being addressed.


I guess I'm wondering if the opportunity you envision is financially possible for a business to operate. 

Can you explain a bit more about how you would change the ways PODs work that would make it more attractive from your standpoint (and still allow the POD to have a profitable business as well)?


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## Solmu (Aug 15, 2005)

robdeth said:


> However, listing a generalized cost of business matrix doesn't necessarily justify the basic shirt cost


I already justified that: the market will bear it. There doesn't need to be more justification beyond that. But you also asked the _reason_, which is the business 101 spiel. 



robdeth said:


> On the other hand, we're not trying to manufacture cars. It wouldn't cost me millions to "tool up".


I don't think you appreciate how much it actually costs to start and operate a business like Cafepress. When DTG started taking over and they made the switch to that technology, they had to purchase multiple printers at (if memory serves; I'm sure Rodney can correct me if not), $100k+ each.

Cafepress isn't a guy in the garage with a heat press anymore. It's not even a small business who invested in a $15k DTG. Given the size of their operation, they would be having to deal with some pretty nasty margins.

Think of it this way: for a typical clothing company, the cost of paying your designers is only a very small portion of your cost of doing business. Cafepress need to make their margins, just like any other t-shirt company would. Most of their designers are poor marketers, so that's barely offset. The cost of design is so minimal as to not matter. It's not just what Cafepress bring to the table: it's what their average customers *don't* bring to the table that maintains the necessity of those high prices.



robdeth said:


> Please don't think I'm self praising here, but there is a difference between spending 10 minutes throwing something together and spending hours/days/weeks hand drawing and perfecting a design. Which is more appealing? That's up to the purchaser, but it's relative to the discussion.


POD has *never* been about the perfected design. Maybe it's got even worse lately (I haven't looked), but dodgy clip art, copyright infringement, badly written slogans, etc. has been the bread and butter of sites like Cafepress from the start. That's why they always had (and to a lesser extent, still have) such an incredibly poor reputation with professional designers. Well, that and poor product quality.

People are fond of pointing out the exceptions in these circumstances: "but there _are_ good designs on Cafepress", "it _can_ be good quality", etc. Fine. But the majority of it is utter crap, worse even than the average crap that makes up the rest of the internet (cf: Sturgeon's law: 90% of everything is crap).

This isn't a new trend at all, I think Cafepress has maintained a consistent business model, and been successful doing it.


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## robdeth (Sep 30, 2008)

Solmu said:


> I already justified that: the market will bear it. There doesn't need to be more justification beyond that. But you also asked the _reason_, which is the business 101 spiel.


I wasn't really expecting further justification. I've conceded that the market bears it. I'm in complete agreement.



Solmu said:


> I don't think you appreciate how much it actually costs to start and operate a business like Cafepress.


See that's the thing, I don't want to start a business on the level of CP. I want to print my designs on shirts using DTG. That's it. My comment was addressing my needs specifically.



Solmu said:


> It's not just what Cafepress bring to the table: it's what their average customers *don't* bring to the table that maintains the necessity of those high prices.


Thank you!



Solmu said:


> POD has *never* been about the perfected design.


I take that to mean...POD as in popular service provider and not POD as a concept....right?

I've got a lot of respect for you and Rodney schooling me on some of this. It's what I asked for and it's what you've delivered.


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## Solmu (Aug 15, 2005)

robdeth said:


> See that's the thing, I don't want to start a business on the level of CP. I want to print my designs on shirts using DTG. That's it. My comment was addressing my needs specifically.


In which case, yes, your setup cost for getting into the business is low relative to other industries, or larger businesses within this one.

In terms of running a personal business using the technology, the technology is either there already or should be one day (depending on what your sales throughput is basically).

The cost of a DTG black shirt through a fulfilment service reflects the fact that large companies are usually unable to run as efficiently as smaller companies, and consequently their margins are not as favourable.

If you cut out that part of the process, you have less market reach, but improved margins that may make up for that.

Especially overhead: a garage printer should fair a lot better from a month with zero sales than a corporation.



robdeth said:


> I take that to mean...POD as in popular service provider and not POD as a concept....right?


Yes - basically I'm talking fulfilment companies who use POD to ply their trade, like Cafepress. And obviously I'm also talking in general, the _average_ user, etc. - not suggesting that *everyone* who uses the service is exactly the same.

POD as a concept is the technology that could eventually improve (or make possible) just in time production for the apparel market.

Personally I don't believe DTG technology is sufficiently developed yet to be *as* popular as it is. I also don't believe it will _completely_ take over, because there are specialist processes that it can't replicate. 

However there's nothing wrong with POD as a concept, or with _all _of its current implementations (ultimately it's up to the market to decide that anyway, and not people like me).



robdeth said:


> I've got a lot of respect for you and Rodney schooling me on some of this. It's what I asked for and it's what you've delivered.


Your attitude is refreshing


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## freestylezz (Oct 21, 2007)

very informative thread indeed.

i thought about outsourcing to a fulfillment service but like yourself i found zazzle and cafepress to have very high prices as well. i found one service provider which is amazingly cheap, so cheap that i started to think that these guys are inexperinced and dont know their full cost yet.

ive done extensive reaserch on dtg printers and their cost of printing dark and light t-shirt... these guys are only making $3 profit a print... they are not even charging extra for packaging and delivering.

ive seen their sample work which i was not very thrilled about either, although light t-shirts as expected were great but print on the dark shirts were badly pre-treated
i will go and check their facility/operations in 2-3 weeks...

so my point of the post is... there are other fullfillment services you can look into beside the traditional zazzle and cafepress. Services which are much cheaper because they are not driving the traffic to your site... if you can do your own marketing than you should be able to find someone who can do the printing/shiping job for cheaper


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## bob emb (Apr 5, 2007)

Hi All,

Bob McCormack here from CONTRACT DTG. No POD will answer you so I guess I will. 

First I am not even in the same league as CP or Zazzle to start. Solmu is correct the cost of doing business with POD is high. Just to let you guys understand the KORNIT printer and dryer system costs $125,00.00 add all the the extras computers storage fixed expenses etc and it is not a cheap date. There are 2 ways to do POD you have your own site and send us the orders and we will drop ship( we do this for 2 very large customers that you might be familiar with but they will stay anonymous.
The other way to do this is like CP where we would set up a store for you and you drive traffic to it and we do everything else. CP and ZAZZLE control you tell you that you will make only $5.00. The other method that we use is you control everything and the most important is price. You set your own margins.

So I hope this helps you to understand the ups and downs of what we do.

I am not self promoting here only explaining the 2 ways to get the the same end result.

Best Regards,

Bob McCormack


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## skibum (Feb 19, 2006)

I wanted to say thanks for having this discussion, it's really great to listen into the conversation and gain some insight as to what's preventing certain groups of people from using POD fulfillment services.

There are always new markets developing and I do think there might be room for a lower-priced (but still 'big and professional' ala CP/Z/SS/PF) POD/ ecomm/ fulfillment service, but the margins would be slim. The cost of running (AKA overhead) a large-scale POD operation with online store capability, CC processing, customer service, returns, etc is very expensive. However, I do believe a significant portion of the expense for companies like CP/Z is marketing via PPC/etc to drive traffic to their marketplace(s).

If there is no retail marketing expense the base prices can probably be lowered. Interesting concept. I wonder how big this market could be? What types of companies would use a service like this?


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## Solmu (Aug 15, 2005)

skibum said:


> If there is no retail marketing expense the base prices can probably be lowered. Interesting concept. I wonder how big this market could be? What types of companies would use a service like this?


I'm not a POD company, but it seems to me that that would be an uncomfortably precarious business model.

First you'd have to spend enough money on advertising to get designers to want to sell through your store.

Then you are reliant on them bothering to market themselves well enough to bring in business that you need to keep afloat.

The best case scenario I envisage is someone manages to start this hypothetical company with as little equipment as possible and keep overhead to a minimum (so you don't need a lot of high-powered sellers to stay afloat) - but without a lot of advertising your growth potential is limited.

It's not like the PPC advertising is designed *just* to bring in retail customers buying a t-shirt - it serves a dual purpose of raising the profile of the POD site in general so that when someone wants to open a store they just go straight to the company whose name they keep seeing, and don't bother checking page ten of Google for some obscure new startup.

I suppose it could work on a more subscription style model: instead of having a nominal per month fee (say, $5 or $10 for a store) and then high base prices, you could have a high monthly fee (say, $50 or $100) and lower base prices. That way there's a certain level of more guaranteed income for the POD company, and better profit for designers doing large volume. Basically a variant on the eBay store vs. eBay listings model.

That would create a point of difference, and be a reason for high volume sellers (aka juicy walking profit bags ) to move over to the new service.


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