Choosing the right product price is essential for the performance of your apparel sales amongst competitors and how much you profit.
In this article, we'll explain 3 steps to consider when pricing apparel for your brand.
Step 1: What are your apparel costs?
The costs to sell apparel can include the design, printing, fulfillment, shipping, taxes, and your web store platform. Use the points provided below to help you understand what needs to be accounted for selling apparel online.
- Design Costs
Design Price / Your Profit Margin = Minimum Orders to Sell
This is our recommended formula to know how many apparel items you must sell to break even with orders containing apparel.
- Printing Costs
Direct to Garment vs Vinyl Printing
These are the recommended printing services for brands that sell apparel worldwide. DTG is the most cost-efficient printing method for selling apparel.
- Fulfillment Costs
Tagit Express charges a flat fee per order we fulfill containing apparel we ship to your customer printed by us only. You should also consider the costs for packaging slips or packages you desire for your brand.
- Shipping Costs
Customer Pays or You Pay
Whether it's you or the customer, somebody must pay the price Canada Post charges to ship the order. You can include the cost of shipping in your price by using this formula:
Your Retail Price + Our Shipping Rate = Your Retail Price with Free Shipping
We all have to pay taxes
You, the customer, and myself are all legally required to pay taxes. Please consider that taxes may differ depending on the region in which you are shipping orders containing apparel. We highly suggest shipping within Canada only unless you have spoken with a tax specialist regarding your specific situation.
- Platform Fees
Costs such as Shopify and transaction fees from payment processors like PayPal have a factor for the price of your apparel. Be aware of these fees and include them in your costs when selling apparel.
Step 2: How much is your profit margin?
Product Cost + Profit Margin = Retail Price
It is best to charge apparel at a reasonable price that fits within the market so that you sell more units. If you are selling at a significantly higher price than competitors, it will be harder to sell apparel for your brand.
Don't be greedy with your profit margin, most apparel brands only profit 20-40%. Focus on selling volume with the right retail price.
Step 3: Do you have any other costs?
Unfortunately, we all have other costs we need to pay! Advertising, marketing, and utility bills can be some to consider.
In brief, to price apparel for your brand, the retail price should account for all production costs plus a profit margin. Product costs may include design, print, shipping, fulfillment, taxes, and platform fees.