Your end of the deal
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- canoe
This is for some of you that have experience and some of you that have an opinion...
I developed a loose business plan to sell t-shirts online... I've talked to a few partners and 50% of them have been 'too busy' so I repitched them... instead of being a partner in the dot com I've simplified everything and offered them a 'place to sell'... so all they have to do is provide the design and do some social media crap.
So on a $30 shirt, you're looking at $12-15 for materials, printing and shipping. That leaves about $5 dollars for operating costs, so there's $10 leftover.
So the question is... how much goes to these brands/designers and how much goes into the dot com.
In a perfect world I'd break up the 15 - 5 for operating costs, 5 for advertising/marketing, 5 for brand owner/designer.
Is $5/shirt the going rate? Anyone?
- detritus0
You're going to do all that for $5 profit apiece?
- That's the nature of the businesscanoe
- At some point the allocation to op costs will become petty cash and there will be a nest egg, to hopefully invest in buying inventory for an event, etccanoe
- I used to make and sell tees many moons ago. Your margins, such as they are, need looking at. $5 per unit is a pittance.detritus
- Thanks for your input.canoe
- I'm with detritus. I also am in the merch biz. If you're really going to do it, buy your own press. Buy raw white shirts in bulk and dye them.shellie
- Consider fulfillment companies for cheaper shipping and handling rates. Pay designers flat rate buyout not royalties.shellie
- I sell my shirts for $30+shipping. Not counting my own personal labor operating the press profit is $25-$28 a peice.shellie
- Also idk why shipping isn't a separate cost for you instead of rolled into the price of the shirt. Shipping costs (Packaging+postage+h... should be calculashellie
- Calculated at the end of a sale. Try woo commerce that's what I use. Paypal gives great flat rate working capital loans that changed the game and cut out extrashellie
- Extra need for partners. Also look up wash/dye houses if you're in LA and NY. So many things u can do to plain white shirts for pennies.shellie
- I'd add a flat shipping fee and tax. I'm not going to warehouse anything at the moment. But I appreciate your story about getting your costs down to $5/shirtcanoe
- I only use Magento, but for this project I'm thinking Shopify.canoe
- the notes from shellie here just reaffirmed why this place is still relevant. damn good info shellie :)exador1
- +1 shellie.monNom
- yurimon0
Also depends on you niche. who are you targeting?
- precisely, do you know your market?drake-von-drake
- Yes we have several marketscanoe
- canoe0
Can you tell me more about how the market would apply to revenue. This is based, like I said, on a $30 shirt... for the sake of conversation.
- How much do you think you need to spend to drive the traffic to your design? you will find out if you are effective on % of traffic you targeting converts toyurimon
- purchase. most likely you can calculate as an estimate for you business plan but initially the only real test is if you are successful on you conversion toyurimon
- sales. trail and error if you feel you have the right combo of niche, design n views of the product.yurimon
- haha ^ your. i missed like 3 on typing fast.yurimon
- We'll probably put 3k into niche facebook marketing. I have yet to determine the cost of the campaign so I do not have a cost per new customercanoe
- Back to the question at hand... what's a good payout? I'll probably contact threadless and see what they say.canoe
- no one person would have the same results. you can only work within the range of estimating from sources you plan to use.yurimon
- targeting is a hit or miss of high end or low end results. if you invest then and hit low end then you need to see how much you lose on risk.yurimon
- if you hit high end of the % of sales then how much is it cost and how long to gain into profit territory etcyurimon
- thanks captain-fucking-obvi...monospaced
- yurimon-1
so if you get 1,000 views per month with 5% conversion to sales at $5 a pop, i think its $250 a month? i did fast not thinking much. double check.
- yuri has the best mathsmonospaced
- maths like trump, words like no onemonospaced
- bernie is prob the best emotionally charged market right now. lol. buy this tshirt or bernie will loose type marketing.yurimon
- *losemonospaced
- also, why the fuck are you mentioning bernie? stay on track, spazmonospaced
- It's actually a $15 pop... I'm trying to div that out moncanoe
- ya mon get the paper mon.yurimon
- canoe0
Still... you would need to know what it costs you to get 1,000 views... but this is off topic.
I'm really trying to understand how much a designer should/would get paid for selling a shirt at my shop.
- best you could do is estimate. lowest to highest probability. its all estimating until you actually try it. then thats where the skills for conversion, kick in.yurimon
- yurimon0
I'm thinking of doing bernie tshirts to cash in on the mania. how many of you will buy a bernie product if you think it will convince someone of voting bernie?
- and there it is... yuri's decisive shit stain on a legit thread, bringing trolling politics into a place where it isn't welcome, like the fucking cunt he ismonospaced
- carry on canoe, sorry he is taking up all this time without anything to add, same with me.monospaced
- You have to admit Yuri, he's singing your tune buddycanoe
- this is a tshirt thread on the biz. bernie is a good market for parting people from their money when things get desperate.yurimon
- oh well then ... don't let me stop you on your thread shitting thenmonospaced
- buy this tshirt. it has converted me to vote for bernie, it can do the same for you.
-ex trump supporter.yurimon - mono, im giving this guy ideas. does my posts below mean nothing to you?yurimon
- You think that you're giving me the idea of a Bernie t-shirt, get out from under your bridge and go to zazzlecanoe
- This isn't a commercial shop, I do enough commercial shit in my studio, this is for fun, for spirit, sell your Bernie idea where it belongscanoe
- im not talking about the bernie idea... and im talking to mono not you. we have a special rapport and language going on excludes everyone on qbn.yurimon
- canoe1
I'll sell it on my shop and give you $7 a shirt, sound good?
- monNom2
If it's going to work, I think you need to cut your costs in half. A general rule of thumb is you want your production costs to be 1/4 of your selling price. That's material and labour.
You need to cut out the print-on-demand guys. They eat up all your profit, and they're basically the same business you are starting. You can't compete if you're just selling for your competitor and trying to make a margin.
Silkscreening is easy. If you invest in a bit of silk-screen equipment and buy shirts in bulk, it might cost you a few grand up front, but you earn ~25% more per shirt so it pays for itself pretty quickly. As you get busier, you can hire low-wage workers as it's not hard to silkscreen a shirt.
Like any new business idea, you've got a lot of holes in your plan, and a lot of unknowns. It's not likely that you're going to find all the information you're after by asking or googling. You might need to research yourself and run some tests to find out.
That's where a business plan comes in. Write down how everything works, plan it all out. Make note of places where you're uncertain of things and either research those things, or figure out how you can run a test to get that information.
IE: you want to know how much it costs to get 1,000 visitors to your website, and how many of them will convert to buyers? - Set up a storefront with some sample shirts for sale. Buy ads (pay a few hundred dollars) the way you anticipate you would if your business is up and running. Track your costs for acquisition, and how many people try to buy your shirt. at the checkout stage, give them a message that the shirt is currently out of stock and offer to email them when back in stock. Do this and you can get a pretty good sense of what it's going to take to bring in the sales.
Now, that cost you some money, but now you have real data you can base your business plan on. Do this sort of thing as much as possible to remove uncertainty and see if you can actually make the business work. Then if you start your business, do it again every quarter, or every year to keep evaluating whether your business still works or something needs changing.
- canoe-2
I super appreciate it, but you didn't come within 100 yards of answering my question.
BTW when did I say I didn't have a business plan? And guess what, my business plan doesn't include buying a fucking silkscreen machine and shipping my shirts from Puerto Rico. I have 3 other businesses that provide me plenty of money and headache, this shirt thing is for enjoyment.
Rule #1 - Never assume anything.
- detritus1
So if it's for enjoyment, give all the prodit to the artists and do it for free? You're only looking at making $5 profit on each one anyway.
Why all the sarcasm? Every response you've made here to genuine input has been tinged with it, so I can only really assume you're trolling?
- Because it's like talking with five people and nobody addresses the question, so of course, sarcasm. If you don't like it fuck off, I don't care.canoe
- The first thing you said was sarcastic, so shut up and open your own store, nobody needs your lurking negative shit 'round here.canoe
- nice attitude from someone looking for a favour.monNom
- Whatever. He didn't offer anything to this thread. I already thanked you for your time.canoe
- monNom0
My bad, it sounded like you had a lot of questions. I wasn't trying to be condescending, but to lend some advice on how to move things forward.
As to your original question: Threadless pays $7USD per shirt to their artists.
- canoe0
Thanks... I figured that $5 was too low, and $10 was too high. I tried to find it on their site, so thanks again for that.
- canoe0
So if you put yourself in the designer shoes, would you be happy getting $7 for your shirt?
That's like 22% or something.
- Gnash3
my cousin runs a t-shirt POD shop -- he's strictly fulfilment, and your numbers are on par with what a lot of his clientele are doing.
Shellie isn't wrong about owning the art (no royalty) but you're strategy has almost zero start-up costs and is a fairly hands-off source of passive income.
I recommend that you don't pay-out artist fees until they reach a minimum amount of sales.
(Also factor in 10-15% product return for quality/sizing issues)
- does your cousin have pod with full online service?yurimon
- ^ yes -- and they have plugins for ebay, etc.Gnash
- cool, can you post it? is it reliable?yurimon
- I've always wanted to play with them but their print quality is not that great.Gnash
- quality stuff? i think most people who do research only get past 10-15 google pagesyurimon
- I mean, it's ok but kinda hit and missGnash
- lol, now that I've dissed his stuff I can't post his url!Gnash
- ok no problem. just asking.yurimon
- His shipping costs are fucked, though. He charges by shirt, so if a client orders 3 shirts they pay 3 shipping costsGnash
- it's out of canada, so you'll be supporting a socialist regime. As long as you're ok with that ;)Gnash
- yeah that sucks.yurimon
- monospaced0
I've never done this myself so feel free to ignore completely, but from what I've gathered from those who have, it all comes down to being resourceful and getting your upfront costs down. Your $12-15 in materials + production + shipping might be reduced through bulk purchases and print deals, like shellie and detritus are hinting at.
Hey some shirts might be more than $30 depending on complexity, coverage, notoriety of artist, also, which would up the profits.
Anyway, I do wish you the best of luck in sourcing cheaper materials and production methods. :D
- bulk purchase means inventory. Inventory management sucks. Bigger profits but more risk and involvement.Gnash
- To me, it sounds like Canoe isn't looking for a full-time gig with this.Gnash
- right, real cost savings come with bulk purchases, but require storage and include risksmonospaced
- omg1
I think the reason why its so hard to define your question is because its not based any issues or any substantial goals or reasoning. Your problem is how to divide it up. You've got is a pie chart 2/3 to you and 1/3 leftover. Why shouldn't all $10 go to the designers?
- I'm sorry you have found my question hard to define, but thanks for answering it anyways.canoe
- If you didn't know that there was an extra 10 would you ask the same question? Would you pay them $10 if it was your store?canoe
- Do you think $7 is fair? Would you accept $7 for one of your shirts? After all you could still have your own store where you make $15.canoe
- I appreciate your thought because this is the heart of the problem. And it may take negotiating.canoe
- I wouldn't like the idea of getting only $7 or $10 from a $30 shirt I designed. I'd probably expect about $20, with $10 going to the rest.monospaced
- You can't just copy what I would do and expect that to work for your business. It'll be doomed to fail in the long term.omg
- So how does that work Mono, you're going to start a business and not be able to cover your costs, you wouldn't survive a week.canoe
- You've already said that you've covered your operating costs, supplies and materials.omg
- you literally asked what someone would expect, and I gave an honest answer ... not trying to argue with youmonospaced
- There really isn't an argument, you'd never get 67%... I'm just trying to explain to you why. I hope that you'd understand how the numbers don't add up.canoe
- "this is for fun, for spirit." Also, I certainly CAN get 67% by simply printing it with any vendor not trying to take the 67% himself, sorrymonospaced
- Why would any designer need to give you their work, when they can make and sell it themselves?omg
- ^for fun! lol. it'll be great exposure.sarahfailin
- canoe0
@Nash - So the idea is that the designers are going to be referred to as brands. And they will act like brands - they get to decide on who design the shirts and the structure of that relationship. For instance, if they asked me to design the shirt I'd prefer to have a cut of part of the brand i.e. their sales. So maybe they opt for a third party and pay them $250 for a one time project. Whatever it is the dot com will only pay themselves and the brands - once a month, cut the check.
@myfriendmono
Down the line I imagine we're going to have to be shrewd when it comes to our suppliers. The kicker is some of these POD suppliers have great prices but their products they're off brand - we don't want to be a part of shirts that are made in Indonesia and all the baggage that comes with that.And you're absolutely right... prices will fluctuate on the store, and if I push the shipping onto the buyer that's an increase in revenue, and we're going to target a few brick-and-mortar places. There is money there.
POD is not for everyone, that's for sure, but it's a great place to start. If it gets big enough to grow out of it's small pants - POD and Shopify then ok, we'll address it then.
- sounds like a reasonable plan. Once/month payout seems like a reasonable plan but it's a pain (and expensive) to process $5-20 transactions.Gnash
- Wait until the Brand sales reach a minimum, i.e. $250, before the payout. That way you can also account for returns (if you charge back for that)Gnash
- Good idea, maybe every six months.canoe
- ^ longer the betterGnash
- yurimon-2
which pod you have in mind if its not personal?
most of us already have somewhat of a list...
- canoe0
@OMG
There really isn't any problem or dilemma or heavy reasoning... it's really, really simple.
How much do you think you should get paid for every t-shirt (your design) that is sold through an online shop.
For example, nom said that threadless pays $7 a shirt, so my guess is that Threadless probably has some kind of 35/65 ratio.
Your position is that you would be in a 50/50 position. If you were the business owner you would give 50% of your profits to the artist/brand/designer, and then the 50% you have would mostly be eaten up by operating costs and you'd have like 10-20 percent in your profit.
I don't think it sounds worth it... to only make 15% of your own company.
- I'd expect about $20.monospaced
- $2 shirt + $2 print + $2 shippingmonospaced
- ^ there are places that sell T's for $50-75, so that's possible. but you'll never get $20 on a $30 shirtGnash
- gotchamonospaced
- I wonder what brands sell $75 a tshirt.yurimon
- I'm just saying that you can't build a business simply by looking at short term numbers. You need problems, dilemma and heavy reasoning.omg
- Yeah I can't find a POD with American Apparel for $6 out the door.canoe
- Mono, start your own store and pay yourself $18canoe
- If you're only concern is making money, you should think about getting into a business that does that like stocks or banking.omg
- here's one for $200
http://www.acnestudi…Gnash - @OMG, let me get you up to speed, it's not at all about making money, but we're talking about it anyway.canoe
- wow, why shouldn't canoe make money at this? odd aggressionsGnash
- Yeah, the store isn't about high fashion. There might be some micro fibers that will jack the price, but, no, this is not for the runway.canoe
- You're comparing yourself to Threadless whose been in business since 2000. Canoe tees has been in business for ... 1 week?omg
- dude, don't have to get defensive or mad, I was just giving a point of view :/monospaced
- @ canoe, i know its not about money, which is why you can't base these decisions simply on money.omg
- If you can sell 500 tees in one month, $10 is a fairly amount to give to a designer.omg
- You are also making 15% from many designers, not just one.omg
- Profit margins quite often get confused with markups. The difference is profit margin is based on actual sales, where markup is based upon price.drake-von-drake