For print on demand companies, pricing can be make-or-break. If you underprice your items, you may actually lose money in the long run. But if you overprice them, you’re likely to lose business to more affordably priced competitors.
Assess Your Product Costs
First and foremost, your items should be priced in a way that will sustain your business. In other words, you need to actually cover all the costs of producing your print on demand products. As such, a good starting point is to do a basic cost assessment.
- Design costs. Are you outsourcing your product designs? If so, you’ll want to calculate the price you pay to the designer, divided by the number of products you think you’ll sell. If you don’t have a good sense of how many products you’ll sell, then you may need to take the opposite route: Determine how many products you’ll need to sell in order to break even, then plan your sales and marketing activities accordingly.
- Production costs. For most print on demand providers, you only pay for a product once a customer places an order.
- Shipping costs. You may wish to entice buyers with “free shipping,” but even so, you should calculate the cost to ship each item and factor it into the base price point of each item you sell.
- Taxes. Depending on location, your print on demand fulfillment partner may or may not need to charge taxes on each item sold.
- Platform fees. Platforms such as Etsy and Shopify will usually charge you a small fee per each item sold on the platform. Again, you’ll want to factor this into your pricing.
Add a Profit Margin
Once you determine how much each item is going to cost you, and thus how much you need to charge for each item just to break even, you can consider factoring in a profit margin. This is where you really have a chance to have some fun with different pricing strategies.
Keep in mind this basic formula: Your production cost + your profit margin = the total retail price of the item.
Your profit margin may be anywhere from 10 to 30 percent, in some cases even more. Just remember that you want to make some money, but you also want your price to fall within the acceptable norm of your vertical. If you’re selling for three times the price your competitors are using, you’re probably going to lose business.
Think About Other Costs
There are a number of specific costs associated with running a print on demand business, above and beyond the costs associated with your products. These costs can include everything from your ecommerce platform to your marketing/advertising budget. Also take into account your Internet bill, which is certainly an important cost in running any print on demand business.
Take all of those expenses, add them together, and divide them by your total profit margin. That will tell you how many products you need to sell in order for your print on demand business to reach a break-even point.
If you arrive at a sales figure that’s unrealistic, that may mean that you need to rethink your pricing strategy, adding a bit more profit margin for yourself; or else, look for ways to cut down on some of your costs.
Get More Information About Print on Demand Pricing
Pricing is one of the most important considerations for your print on demand business. Making a fully informed decision about pricing can be essential for turning your business into a true money-maker.
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