# How to make a profit when outsourcing printing?



## elgrundy (Jul 28, 2014)

Hello. I am an independent graphic designer starting a new line of infant onesies/bodysuits with my designs. I am struggling with how to determine the best price point to make this whole effort sustainable. How did you structure your prices to achieve a positive cash flow to cover the costs of sourcing the garments (in my case onesies), external printing costs, reinvest in the business, and still be able to make a profit?

For the first batch I am not going to order more than 300 onesies. (I would ideally like to order fewer but can't make the numbers work at less than 300). At this volume, the total cost per unit comes out to $6.67 after printing and private labeling. Based on some of the general guidance available I determined the wholesale price ($10) by marking up the unit cost by 50% and the retail price ($15) by marking it up by a further 50%. Unfortunately, in my market I don’t think I can charge more than $14 per unit.

The most significant issue is that at $14 I am only left with $6.02 (after tax) per unit sale. This amount of net revenue is not quite enough to cover the costs of another order - or my time.

I know that doing the printing myself might lower my production costs, but until I have more experience and know there is a demand, I am not ready to invest my time and money in this. Until then, how do you suggest I go about starting my business to make sure it is profitable enough to sustain me until I am ready to order in larger quantities and/or start printing in house?

Thanks!


----------



## binki (Jul 16, 2006)

First off you will have a real hard time selling wholesale and retail at the same time. Your wholesale customers will not like you competing with them. On top of that they will want to sell at double or triple their cost so you are undercutting them as well

You should probably start your price calcs on what you need to make to be profitable and work from those numbers and not cost. 

You will probably need to make a leap of faith at some point. The clothing space is very crowded and if you can't make a name for yourself then you will not make it


----------



## treefox2118 (Sep 23, 2010)

"I can't afford to order 300" means one of two things:

1. You aren't willing to take a risk on yourself, or
2. You don't have a market yet.

If you don't have a market, you can't expect to be making a big profit. I tell new designers to ignore profits and focus on sales initially as step 1. You want a brand name with reputation and reviews and referrals. If you make $1 a shirt, great. That's how small brands become big brands.

I *lost* money for the first year I was selling my garment line. Thousands of dollars a month lost to promotional costs, website design, overpaying for shirts, etc. But as my reputation grew, my profit grew. Now my margin is healthy, and I have room to take MORE risks.


----------



## NoXid (Apr 4, 2011)

Under-capitalization is the number one reason new businesses fail.

Suck it up and take a loss, if needed, while you learn your market and establish your brand. Starting out, it is better to lose $5 each on 300 units than to get a great volume discount on 3,000 units that you can't sell but in theory would have made $10 each if they had.

If you do the designing, printing, and selling yourself, you can make a profit (ignoring your time and assuming your stuff sells). But that is an investment of time that you may not be able to afford. 

Keep it small until you learn all those things that you don't know that you don't know (thanks Donald) and establish some solid clients, then invest in larger orders at lower costs. If you won't have the cash/time to get the business that far, then come back to this idea once you've gotten the necessary money saved up and/or have more time.

I first flirted with printing and selling T-shirts before the age of the WWW. It was a halfhearted attempt doomed to fail since I lacked the money, time, space, etc. to succeed. It was, however, a learning experience.


----------

