Tutor Tanith

How Much Should I Charge?

General Overview
Yeah, But what's the answer?


Most people new to Print on Demad look at the prices for the products and think "Gee, that is so high. I guess I'll add a dollar." Trust me, it the design is worth selling at all it is worth a higher mark up. Inability to sell a product is rarely due to price, or at least not primarily. A typical customer comment "To me, the price is mostly irrelevant. A price will not make me buy. It's the value in the item which I am after." Overall pricing is affected by perceived value much more than rational analysis.

Using your own "what would I pay for that" can be very misleading. Frequently pricing discussions go like this: Newbie Shopkeeper "I'd never pay $25 for just a T-shirt. I can get 3 in a pack for that price." Successful Shopkeeper "You've never paid more than $25 for a shirt ... like at a concert?" Newbie Shopkeeper "Well, yeah, but that was unique. I couldn't get it anyplace else and it was really cool" And that dear newbie is what you should be selling in your POD shop; really cool stuff they can't get any place else.

Often the newbie shopkeeper is wrong in assessing whether their own design has the necessary cool uniqueness. The bottom line is that if the design is crap it won't sell at all or will sell very poorly no matter how low the price is set. If the design is good it is always going to easily get more than a dollar markup. When that good design doesn't sell it is a failure in marketing. Exactly how much over that dollar you can get depends upon many factors.

General Overview

What makes something "too expensive" is when people are unwilling to pay the price. What price people are willing to pay will depend on

(a) who the target audience is - kids spend their parents money more freely than several years later when they are spending their own money and then several years later when they are earning a good living they are willing to pay for what they want.

(b) the design. If the general concept or message on the shirt can readily be obtained from many sources then competition limits the price people are willing to pay. If it is unique or special people will pay even higher than what is in your list. Designs with only text typically command a lower range than designs with at least some art work. Designs with good art work typically command a higher range than designs with so-so artwork. Designs with great art work and a great message have the best range of prices people are willing to pay.

(c) marketing. Marketing makes a huge difference in what people are willing to pay. That could be the advertising that gets people to the product, the presentation of the product, the words surrounding it, etc. The perception of a "shop" makes a difference. Poorly fitted items mixed in the properly fitted items can drop the price because it creates an impression of cheap.

(d) the quality of the product itself. The range of what people will pay for a white t-shirt is lower than what people will pay for the organic, or the dark shirts. The manufacturer can make a difference. The weight and type of fabric. The description of how it is finished.

(e) psychology. Perception of price is driven in part by a tendency of the customer to simplify pricing to evaluate value. That is the reason so many prices end in .99. Customers tend to see a significant difference between $4.99 and $5.00 while they see little difference between $4.86 and $4.96. As you can imagine pricing strategy is thoroughly studied.

Yeah, But what's the answer?

The answer is that you are going to a have to experiment and that what you can charge when you are just starting it going to be lower than what you can get later. As you improve the quality of your designs and the appearance of your shop the acceptable price range will rise. Regardless of product your minimum markup should be 10% of the base price. For low cost items (like stickers, buttons) your minimum markup should be 50% of the base price. When you start making regular sales (however you define that term) then you should start sliding your markup to double those percentages.

Good pricing is part art and part science. Here is something you can just throw at the problem to start with and refine later:

For items with a base price between   Percent markup should be about
$90 +   15%
$18 to $89   20%
$14 to $18   25%
$11 to $ 13   30%
$5 to %10   50%
under $5   100%

Now don't go and write me about how wrong I am. This chart is intended to be simple more than accurate. It is intended for the newbie with no experience who just wants some fair guidelines to start with. Some PODs will provide a tiered pricing chart which takes this general principle that the percent markup rises as the base price decreases and then modifies it by experience and marketing research. If you think in terms of dollar value, You are cheating yourself or you have a lousy design if your markup is less than $4 for apparel. Most people can easily get $6, and most successful shop keepers get in the $8 to $10 range. There is an exception. Logo items in support of a club or similar organization is frequently marked up very low or not at all because the primary goal is to encourage supporters to wear them as a form of marketing and unity.



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