Imaging Spectrum Blog

Figuring Out Cost When Starting A T-shirt Business

Starting a t-shirt printing business is exciting, and it’s rewarding seeing your customers wearing your designs in real life or online. However, one aspect most new entrepreneurs fuss over is the cost aspect, in particular, how much does it cost to start the business and how much you should charge for your products.

In this article, we look at the cost of starting a t-shirt printing business so you know what you’re getting into before you begin.  

 

How Much Does it Cost to Run a T-shirt Printing Business?

People decide to get into the t-shirt printing business because it’s a fun and easy business to start up. It’s not unheard of for people to start with a single T-shirt printer and begin making money quickly.

So, let’s look at the actual expenses you’ll shell out to get started so you know how much capital you’ll need to begin.  

 

Fixed Expenses

The first aspect to consider is your fixed expenses. These are things like equipment, rent, taxes, wages if you have employees, and marketing materials such as business cards, brochures, etc. epson f2100 printer

For example:

If you want to begin with a direct to garment setup, which is perfect for a small shop that deals with low print runs, you can expect to pay about $15k for a printer like the Epson F2100.

After deciding on a printer, you need a computer and software to make your artwork, which may run you an additional $2,000. 

Most experts say that you can get your business up and running for about $250 per month, which is about what you’d pay if you purchased a new car. But unlike a car, you’re making money with the equipment you purchased, which means you can pay it off quicker.

Rent, employees, and advertising are difficult to factor in because you could start your business in your home and be the sole employee. Advertising can be done by word of mouth or you can make use of social media to get the word out about your business which doesn’t cost a thing.

 

Variable Expenses

Variable expenses are things that change according to how much product you’re putting out. For example, the more shirts you print, the more ink, toner, film, and other materials you must buy.

Plus, if you’re designing and printing more shirts, you’re paying your employees more for the extra hours they’re working.  It’s also crucial to think about expenses like electricity and water. If you’re producing more shirts and working long hours in the shop, you’ll be using more electricity and water.

As you can see:

Starting a t-shirt printing business isn’t outrageously expensive. Most people can save up a few grand and get a bank loan for the rest to purchase the equipment and open your shop. The key is to keep that printer working, because the more money you have coming in, the quicker you can pay off your debt, and look to expanding your business.

 

  Man printing on t shirt in workshop

 

How To Determine Pricing

Setting the right price for selling your shirts is where a lot of new business owners get hung up. If you price your products too low, you’re losing money and won’t be in business for too long. Price them too high and the competition will eat you alive.

So, a good rule of thumb is to scope out what your competitors are charging to see where the market is in your area to get a starting point. 

The next step is to keep in mind the 4 elements that will make or break your business with pricing:

  1. How much your supplies cost
  2. How much your labor costs
  3. What is your overhead
  4. What the market will bear

Let’s say you buy 100 t-shirts for inventory and the cost of each shirt is $1.50, and the shipping cost is $20. Twenty divided by 100 means you’re paying 20¢ for shipping per shirt. That means you add that 20¢ onto the price of the shirt, which brings the total to $1.70 you’re paying for each shirt. 

Next, you factor in your labor costs. How many hours does it take to make the design and print the shirt? What is the hourly wage you’re paying your employees to take care of these tasks?

If your hourly rate is $25. Take 25 and divide it by 60 minutes and you get about 40¢, so add that to the cost of the shirts. Now it costs you $2.10 to print a shirt.

But wait, we’re not done because you have to factor in your overhead which includes items like rent, internet, and phone, electricity, water, insurance, materials, etc.

Your overhead will vary depending on how much you have.  If you work out of your home, you can save a lot of money. If your overhead amounts to another $25 an hour that adds 40¢ onto the price of your shirts, which brings the total to $2.50 per shirt.  

 

An easier formula to follow is: 

Retail Price= Cost to produce divided by 100-profit% x 100.  

 

Lastly, figure out what the market can tolerate. Do some recon and find out what your competitors are charging and see if it falls in line with what you came up with.

To lure in customers, consider giving bulk discounts or deals if they buy a bundle of products. 

It may seem like a lot of math just to something as simple as printing t-shirts, but you are running a business, and in order for you to be successful, you have to nail down this boring stuff first before you can begin the fun of designing kick-butt shirts that everyone will want to wear.

Get all the ‘business stuff’ squared away and you’ll be much better prepared to make a nice profit.

 

 

Now that you’ve got business costs down…

CHECK OUT THE BEST PRINTERS FOR STARTING A T-SHIRT PRINTING BUSINESS

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About 
Matt’s knack for the use of inkjet applications including proofing, promotional goods and signage came from the advertising world, where he managed the print and broadcast accounts for several key corporate accounts. Over 15 years at Imaging Spectrum, his experience has broadened in the print industry and now heads up the inkjet team in providing thorough solutions for printing opportunities across several platforms.

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