# Turning a profit selling $9 and $10 shirts - how do they do it?



## Str8up8up (Oct 26, 2010)

This is a business model question and it makes the following main assumptions:

#1 several stand alone t-shirt sites are selling shirts for $9 to $10 and are profitable

#2 they have been profitable from the beginning and have not required more than $5,000 in total start up costs

#3 do not spend money on advertising or marketing

#4 sell five or six color, one sided, screen printed designs

#5 designers receive a portion of the 9$ to $10 selling price as compensation

#6 free shipping and handling in north america


Here is my uneducated breakdown of the costs and the revenue of one nine dollar shirt - would love for someone with some experience to tell me what i'm missing...

Revenue......................$9.00

Cost Of Goods

Designer commission.....-$1.00
blank shirt...................-$3.50
print...........................-$1.50
shipping.......................-$3.00

Are my numbers off?

What am i missing?

How are they making money?


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## lincolnapparel (Nov 21, 2009)

I'm not sure what sites you're referring to, but I wouldn't consider a shirt priced at $9 or $10 to be a quality T-shirt - most likely they are "made in China" or some other third world country with the cheapest possible materials.


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## IYFGraphics (Sep 28, 2009)

Str8up8up said:


> This is a business model question and it makes the following main assumptions:
> 
> #2 they have been profitable from the beginning and have not required more than $5,000 in total start up costs
> 
> ...


A couple things I find hard to believe is first the start up costs of $5k...

The second is the cost of the blank, $3.50 is way too high and I think that is where the hidden profit is, in your assumption I would assume they are paying around a buck each or less for their blanks, that would immediately free up $2.50 which is where the profit is derived per shirt.

Could also be that the $1 per shirt going to the designer is way high also, I'd be more incline to believe it's more like .20 -.50 cents per shirt and that might still be high depending on the number of shirts produced of a given design.

Everything else seems somewhat reasonable without seeing the given artwork.

Hope this helps.


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## Str8up8up (Oct 26, 2010)

shirt.woot.com is one of the sites i'm referring to. They sell $10 shirts every day and they are good quality and printed in texas.


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## IYFGraphics (Sep 28, 2009)

Str8up8up said:


> shirt.woot.com is one of the sites i'm referring to. They sell $10 shirts every day and they are good quality and printed in texas.



May be....but they are not a traditional shirt site, like the hot dog print you can get it in any color you want as long as it's royal blue, and while your buying a $10 shirt you can get a vacuum cleaner, wine, or a blueray home theater system.

Shirts are a drawing point to build interest in their site so you buy other things....kinda' a lost leader if you will.

Hope this helps.


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## Str8up8up (Oct 26, 2010)

IYFGraphics said:


> A couple things I find hard to believe is first the start up costs of $5k...
> 
> The second is the cost of the blank, $3.50 is way too high and I think that is where the hidden profit is, in your assumption I would assume they are paying around a buck each or less for their blanks, that would immediately free up $2.50 which is where the profit is derived per shirt.
> 
> ...


Thanks IFY - definitely helps. Do you know of a thread on here that lays out some of the different blank and printing costs?


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## Str8up8up (Oct 26, 2010)

IYFGraphics said:


> May be....but they are not a traditional shirt site, like the hot dog print you can get it in any color you want as long as it's royal blue, and while your buying a $10 shirt you can get a vacuum cleaner, wine, or a blueray home theater system.
> 
> Shirts are a drawing point to build interest in their site so you buy other things....kinda' a lost leader if you will.
> 
> Hope this helps.


A site like Cool Graphic Tees and Cheap Limited Edition T shirts by RIPT Apparel is a better example


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## IYFGraphics (Sep 28, 2009)

Str8up8up said:


> Thanks IFY - definitely helps. Do you know of a thread on here that lays out some of the different blank and printing costs?


Blanks will be hard to pin down, what I might pay $1.50 for someone else might be paying $2.25 for, it's different depending on who you buy from and if you have to pay shipping costs to get the blanks.

As far as printing costs....there are many threads here on TSF discussing costs of each process, again it's not going to be a fixed amount what cost .50 per hit of ink on a manual screen press might only cost .10 on a auto press.

Best advice I can give is to search the threads for the given process you choose and see what you find that best fits your abilities or business model.

Hope this helps.


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## IYFGraphics (Sep 28, 2009)

Str8up8up said:


> A site like Cool Graphic Tees and Cheap Limited Edition T shirts by RIPT Apparel is a better example


Still not a traditional shirt site, this one is taking art and promoting an artist, doing a limited run and selling the shirts, there are no choices in the color of the shirt only size and if you wear a 2x your going to pay $14.50 for the shirt delivered.

Not to be critical but both sites may offer good quality shirts but the artwork on both is amateurish IMHO, you can buy similar artwork at any department store on sale for $5 a tee.

JMHO


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## Dennis Graves (Apr 27, 2009)

Another thing I read about woot is they don't print the shirts until they are ordered. All the shirts are only available for 1 day, they probably don't print them until a day or two after and they know exactly how many they have to print. This seriously minimizes the amount of waste and storage space required.

The latest Alpha email has colored Gildan 2000 100% 6.1 oz Ultra Cotton Shirt for just $2.42. I'm sure any ink costs still keep it under $3 total for the shirt. I don't know what they pay the designer, but they probably ship everything Parcel Post and probably get a real good price with the bulk mailing discount they are getting.

Plenty of other ads and adsense making them money also. They must also have a HUGE mailing list of people that buy things on the internet. I've never bought a shirt from them so I don't know what type of emails or future offers they send you.

I'm sure they are making plenty of money.

I have a domain name that I bought once to start a site like woot. I might have to consider it again this week.

Have Fun,

Dennis G


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## dptk (Aug 14, 2009)

I'm guessing they are in at $3 for printing and the blank shirt. average at $2.50 for postage = $5.50 , although there is overhead cost, labor, etc . but I think there is plenty of room for profit yet. Last I checked, woot just paid flat fee for designs, normally about $300 , I know some other sites pay a % , and I don't know what % that is.


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## binki (Jul 16, 2006)

tell me what i'm missing...

Revenue......................$9.00

Cost Of Goods

Designer commission.....-$1.00 *try nothing, image is probably ripped off*
blank shirt...................-$3.50 *maybe a buck for a cheap T*
print...........................-$1.50 *could be but less if printed offshore*
shipping.......................-$3.00 *probably less. If you do a lot of shipping you get a discount. *

Are my numbers off? *yes*

What am i missing? *cheap shirts, cheap printing, cheap labor = sub standard product for the bottom feeders. wash it 3 times and it will fall apart. *

How are they making money? *50c or a buck a shirt but they do some volume. *


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## jwalk2515 (Apr 22, 2010)

I own a few woot shirts, they are good quality, arrive pretty fast so no idea on when they are produced but they are not just for one day. You can check out their reckoning and order older shirts too. I get one email a week from woot but I opted in for their subscription so I wanted them.


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## Str8up8up (Oct 26, 2010)

What about setup costs? I forgot to add those to my initial cost break down...Is there a thread on TSF that explains how they are calculated?


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