Do you want to know how much money T-shirt design businesses make yearly? If YES, here is an analysis of the income & profit margin for T-shirt producers.
In the United States and all over the world, there are many reasons why people love the idea of selling apparel. It is a creative way to make money, it’s fun, it provides you some independence and you can get started on a small budget. The demand for apparel is one of the highest after food.
People are demanding more and more, and the demand will continue in the future as well. According to industry reports, in 2018 alone, total e-commerce sales amounted to $504.6 billion. But this amount is projected to surpass $735 billion by 2023.
Not only those, apparel and accessories alone are expected to generate more than $138 billion by 2022. As more people are coming to e-commerce for buying, there is a huge potential if you make your business plan considering this sector.
How Much It Cost to Produce a T-Shirt?
The very first thing you should consider when starting this business is how much it costs to produce them. As an entrepreneur, you will want to keep your costs somewhat low, but not at the expense of quality.
Have it in mind that people are always willing to pay more for a retail quality t-shirt, rather than a shirt that’s ill-fitting and has a rough feel. So paying $1 or $2 more on the front end might enable you to charge $8–10 more at retail.
How Much Should You Charge for your T-shirts?
Nonetheless, you should not be scared to price your t-shirts for what they are worth. If you’re selling a high-quality t-shirt, you just have to make sure your price communicates that. If you’re pricing your t-shirts for less than they are worth, your customers are going to perceive them as less than they are worth. So price them as they should be priced, and let your product speak for itself.
Also note that analyzing and understanding your current market is an ideal way of determining what your retail cost should be. Take your time to look at a competing t-shirt line to see how they price their shirts.
This is not to say you should just price your t-shirts at the same price, or just $1 less than your competitors, but it is very necessary to consider what other people are charging for their products when you’re trying to convey to your customers that they should choose you.
Once you have your t-shirt cost down, you can use it to calculate a price determined by your desired percentage of profit. But have it in mind that people do not always act rationally. If people acted rationally all of the time, pricing a product would be incredibly formulaic.
If it was that way, you could plug your costs into an equation, get a price that most people would agree upon, and start selling.
But people are emotional, and whether you like it or not, the price of your product is going to trigger an emotional response in your customers. Note that great pricing will consist of considering human behaviour and human emotion to find a sweet spot that will persuade people to choose the t-shirts you sell.
How Much Money T-shirt Business Owners Make Yearly?
The exact answer to the above question will vary depending on so many important factors. However, if you get orders regularly and use a high-quality machine to produce t-shirts, you can earn about $100,000 a year. But note that you might not be able to earn this much initially when you start the business. It is pretty much a rough calculation if your business is grown up to a level.
Estimated T-Shirt Selling Price
According to reports, the average selling price of 1-piece 100% cotton t-shirt ranges from $5 to $9, depending on the number of shirts, quality, and colour. Using this as a threshold for measurement, and if you get an order for 72 t-shirts, the machine will take around 30 minutes to print. For 6 colour t-shirt, you can charge at least $8 per piece, which would bring $576.
Estimated T-Shirt Costing
If you buy in dozens, 72 shirts will cost $144, which translates to $2 for each one. Screen making materials cost would be $21 in total. At this point, you will need to spend $3.60 as ink cost and $1 for lights and electricity for 30 minutes of operation. The overall costing would be $169.6.
Estimated T-Shirt Profit
From the data above, it would take $169.6 to produce 72 pieces of t-shirts. You will rake in about $406 of profit that might take an overall of 2 hours to produce. No job will offer such amount of money for working only 2 hours a day. If you get orders similar to this quantity per day that would be $10,150 per month and $100,000+ per year.
What is the Average Profit Margin on a Single T-shirt?
There is no direct answer to this poser, especially since not all businesses are the same; some have huge working-space, while some have little. The number of employees also matters as well. However, use the data below as a yardstick to estimate the Profit Margin per t-shirt and build from there.
Estimated Costing Per T-shirt
Using the same data analyzed above, here are some estimated cost of different shirts –
- Left chest logo t-shirt: shirt $2, supplies $0.25; total $2.25
- Baseball jersey t-shirt: shirt $8, supplies $3; total $11
- T-shirt with logo full front or back: shirt $2, supplies $2; total $4
- Full front fashion t-shirt: shirt $4, supplies $1.50; total $5.50
- Logo hat: hat $2, supplies $0.40; total $2.40
Estimated Selling Price Per T-shirt
Note that your t-shirt selling price will vary depending on the number of orders, the clients you are selling to, market competition, etc. Also note that this pricing is for selling in small numbers (a few dozen) with custom designs. For 1000 pieces of t-shirt and 500 pieces of hats, the price will be less.
- Left chest logo t-shirt $9 to $15
- Baseball jersey shirt $18 to $30
- T-shirt with logo full front or back $13 to $25
- Full front fashion shirt $18 to $30
- Logo hat $10 to $25
Possible Profit per T-shirt
The exact answer would be: as much as you want. Your profit per t-shirt will differ based on your business type, effort, time, etc. Factors that affect your earning will include:
- To whom you sell the product?
- How much money do you want to make?
Therefore, the more effort you put into the business, the more you will profit from it.
Conclusion
A business that makes and sells t-shirts is a wonderful venture in the United States. You can run the business online or rent a retail store. Furthermore, you can sell bulk t-shirts at low prices or sell these at high rates in small quantities. The choice is yours, and depending on that, you will get the outcome.