How To Price Screen Printing To Customers For A Profit

People start a business to make a profit. Screen printing is just like any other business. Some printers will say that they started this business because this is their passion. I respect that but in the end, you would need to turn in a profit to survive in this business. And I will show you how to price this screen printing job properly so that you will make money in the end.

How do you price your screen printing jobs to customers for a profit? The most basic formula used for this calculation is (item price * item markup) + (printing fee – discounts given) = price per item. Following this formula is a surefire way that your screen printing job is guaranteed to make money.

There is another method out there that will take into account more details that are integral in this screen printing job. By knowing this other way, you will have the freedom and mobility to price your jobs better. This will afford you the chance to really turn in a profit.

I will discuss this other method later. But first, let me explain more about the basic formula that was listed above.

Item Price

This is the straightforward price you are paying for the item or garment. It is to your interest to get the cheapest possible price for these items.

Consider buying in bulk especially if the item or garment is a very popular choice for your customers. You will realize plenty of savings.

There is plenty of wholesalers in the market presently and you can check them out to obtain the best price you can. You may consider negotiating in terms of not only the price but for the delivery charges and payment terms.

Item Markups

The basic principle as to why you are charging a markup is that you are incurring work here.

Sourcing, purchasing, and handling the needed paperwork to complete the sale transaction takes time and you should be compensated for this.

Usually, the range of markups lies between 150% to 200%.

Don’t let the numbers confuse you for this just means that you will add 50% or 100% to the original price of the item. If an item costs $4, a 150% markup means that you will sell this at $6.

This same markup that you can charge depends on the item itself. There are three types of items that you will be using: basic, mid-tier, and premium.

Basic Item Markup

I recommend setting the markup here at 200%.

Plain t-shirts are an example of this item type.

Cheaper priced items should have a bigger markup because the profit is lower. Markup is based on the price of the item and since these items are inexpensive, you will get a lower dollar amount.

Chances are that basic items will form the bulk of your printing jobs. Even though you will have a lower profit per item, you will have more of these items to get income from.

Note that the profit you will be making gets lower as the price of the garment gets higher. It is to your interest serve a higher markup for this type of items.

Mid-Tier Item Markup

Even though you are charging a lower item markup, you should be able to compensate here with a higher printing cost for this item type.

150% markup should be used for these items.

Mid-tier items are the following:

Zip-ups
Hoodies
Premium athletic apparel
Premium quality t-shirts
Long sleeved t-shirts

Another consideration as to why you should charge a higher printing cost for more expensive items is due to spoilage costs.

Simply put, you will pay more to replace these items if things go awry during printing. You will not be billing the customer for these mistakes.

Premium Item Markup

The same pricing principle should apply here as in the mid-tier items.

Items that cost you somewhere between $10 to $25 are classified as premium ones. Examples of this item type are

Coats
Jackets
Outerwear
Backpacks
Reflective workwear

A markup of 150% is also reasonable although you might have to do a case to case basis for specific items. Sometimes, setting a specific dollar amount as markup might be better rather than doing a percentage.

Customers might be more knowledgeable of the markup that you will be charging since they can always check the price of this requested item beforehand.

You can always compensate for an even lower markup rate when you do your printing costs calculation. In this area, it will be difficult for customers to double check your prices so you can adjust accordingly.

Printing Fee

You have to totally understand the components of this particular pricing component.

Failing to understand these components will have an adverse effect on your final price. You may lose your business because of this fact.

There are four considerations that have to be taken into account here for you to price correctly. They are:

Printing locations
Ink colors used
Flashing
Automatic or manual printing

I shall go over these factors individually.

Printing Locations

Keep this in mind right away.

Anytime that you place a garment on a printing press, it is one job. When you remove this same garment and placed it on another press, it is another job.

The same shirt, when placed twice on a press, should be counted as two jobs and billed accordingly. You don’t have to bill twice the amount but there has to be a premium over what would you be billing for a single job.

This is why when you print two colors on one side, the job is easier for you and cheaper for the customer. This is a fact when compared to printing on the two sides of the same t-shirt and using a single color per side.

This principle also applies when you are printing on sleeves, tags, and pockets of the t-shirt. You have to bill a premium for these printing instances.

Ink Colors Used

You can’t expect people to have the same taste in design. It is quite impossible for all to like single color designs much more that everybody will ask for very colorful designs at all times.

As a t-shirt screen printer, you obviously know that you would probably need to use more than one screen if your client requests for more than one color. The rule is one screen per color.

Also, it would be impractical to demand that your price for printing would double every time a color is added. Let’s face it that you would probably be laughed out of the business if you will charge four times a single color job would cost if there are four colors in the design.

The solution is to have a pricing model where a fixed price is to be charged for a fixed number of colors used. I am talking of tier-pricing model for this instance.

Consider using this table as a basis for your charging for colors:

Number of Ink Colors Used	Increase in Price
1-2	Standard price
3-4	5% over the standard price
5-6	20% over the standard price
7 and above	50%

This pricing model penalizes the customer for using an obscene amount of colors. This type of designs are too complex and there is a big chance of errors happening during printing. Errors are expensive and as mentioned before, you will not be billing the client for this when it happens.

Lastly. this same pricing model sets a limit to the number of colors to be used. However, it is fair enough not to stifle creativity in it.

You can also refer to this table if you want to have the pricing chart based on a per garment vs number of colors and locations used. The minimum order for printing set here is 24 pieces.

QTY	1 color	2 colors	3 colors	4 colors	5 colors	6 colors	7 colors	8 colors
24	2.5	3.25	4	4.75	5.5	6.25	7	7.75
48	2.25	2.75	3.25	3.75	4.25	4.75	5.25	5.75
96	2	2.3	2.6	2.9	3.2	3.5	3.8	4.1
144	1.5	1.75	2	2.25	2.5	2.75	3	3.5
288	1.25	1.45	1.65	1.85	2.05	2.25	2.45	2.65
576	1.15	1.35	1.55	1.75	1.95	2.15	2.35	2.55
1152	1.05	1.2	1.35	1.5	1.65	1.8	1.95	2.1

Flashing

Flashing involves the use of heat to quickly dry the ink that was just recently placed on the garment. This is necessary to enable a second color to be placed on it. It is used primarily in plastisol ink printing on dark garments.

Similar to the number of inks used, there is additional work to be done here and you should bill for this extra work.

I recommend that in flashing jobs that you use the number of ink colors used table shown above.

Add two colors to the quotation. This will bring the price to the very next level and increase your income accordingly.

Consider also that some shops give discounts to customers in terms of the number of colors that are included in their print job. This is on the condition that there is no flashing involved in it.

Automatic Or Manual Printing

Manual printing will obviously take longer to complete the printing job. You will have to account for the labor costs especially if there is a strict deadline to be followed.

Flashing and multiple colors of ink used, if required, will also entail added labor time.

You will have to calculate the total times needed to complete this job and price it properly.

Once you have crossed over to the automatic press printing method, these factors might not be important anymore except for flashing. However, you will have to know that the capital needed to purchase these machines would have to be factored in your new pricing.

Other Considerations In Your Printing Fee

Review these conditions and see if you should apply it to your pricing model:

Set up a maximum printing area. You can designate a number that will be part of the standard pricing. If the design exceeds this area, you will have to adjust your pricing.
Consider charging separately a setup fee for the press if the ordered quantity is not substantial. This setup fee is on a per color and per print location basis. You can adjust the setup fee if this requirement is different.
Set up a minimum order quantity for printing. Anything less than this would have to be charged extra.
Specify that the same ink colors used to be the standard all through the printing job. If there is a color change requirement, charge an ink washout fee.
Set a time commitment for completion for a standard job (number of colors, order quantity, flashing requirement, etc.). If the client has a different requirement or requests for expedited printing, charge extra for this change.
If the color requirement involves light ink on dark garments, consider billing this as an additional 2 colors per the ink table above. The logic for this is that you will need to have an underbase for this since the print quality will be no good without it.
If the inks to be used have to be mixed with the PMS or Pantone Matching System formulation, try to add a premium for this work in your billing. There is an added work here that requires precision measurements. There is a chance for a mistake here that will not be billed to the client.
Have a bagging and tagging charge be included in billing if garments are to be shipped elsewhere after printing.

There will come a time that you will get a client who will come into your shop with designs that are hard to work with for a lot of reasons. This same client will demand that you produce miracles out of this same design and will hand you a very tight deadline to work with. It may also be possible that after working on this design, same client will repeatedly change his mind and ask you to perform endless revisions.

I will advise you to immediately steer yourself clear of this client if you still can.

If not, you will have to set a limit to the number of specific type of revisions that you can make to his designs. You will have to communicate this clearly to him along with issues on deadlines if any. I will also use this opportunity to explain to him how you will be charging him at a premium for this difficult work.

Put everything in writing as much as possible. Ultimately, your purpose is to protect your shop if things go out of hand here. You don’t need to get bad press out of this situation.

Discounts Given

If you are a startup or is not making a whole ton of money in this screen printing business, I would strongly advise you to think twice about giving discounts.

You are not making money and giving discounts would severely cut the income that you can’t simply afford. Consider instead doing the best job that you can and meeting your order commitment deadlines. This will turn out to be better for your shop instead of giving discounts.

However, there are right circumstances in giving out discounts and I will discuss these situations.

Simple Artwork

If a customer gives me an artwork that I can take almost immediately to printing, I try to show my appreciation and give him a little discount.

This is to show recognition as to how it made it easy for me to start the job right and finish it quickly enough to start on another printing job.

These are the specific instances when this thing happens:

Little or none revision in the artwork
Use of 110 mesh screen which is the simplest to use
Easy setup of the press
No complicated garments requirements
Rapport with the client

I tell you that this discount will be repaid eventually for these clients always go back to me for their printing jobs. They even recommend me to their friends and families.

Quantity Discounts

This is an obvious factor when giving discounts. A lot of screen printing shops do this for their customers.

The premise here is simple. You will make more money in total for large orders when you add up the quantity printed and multiply that by your unit income. Just make sure that you have priced your job properly or you might be losing money instead.

I suggest that you have a matrix created here where you will specify that orders that come at this quantity will get this specific percentage discount on the total price of the job.

I will discuss price matrix later in this article.

Discounts given can also be in the manner of an amount discounted per garment. It could even be substituting a cheaper garment so that its cost will be the one reflected on the invoice.

Just a thought about giving discounts to your biggest clients. I believe that you can’t simply afford not to give them discounts for your competitors are out there waiting to snatch them from you. Combine these discounts with exceptional service to keep them with you for a long time.

Friends And Family Discounts

This applies in all types of businesses and not just in screen printing.

You can rationalize that the discounts given to these people are being returned since they are the ones who supported you in the beginning when you have nobody coming in through your door. And they keep on promoting your business through their very own circle of friends and family.

Obvious organization or groups to give discounts are your church, volunteer groups, school organizations, and other similar organizations.

Regardless of the amount of discount given, indicate this and point it out to your customers. It is important that they know so that they can back to you for future businesses or refer you to more people.

Screen Printing Supplies

I will now like to share with you information on the supplies that you will be using in this screen printing business. They can serve as your guide in your pricing models.

T-Shirts

Costs to buy t-shirts on a wholesale basis is about $24 per dozen which is equivalent to about $2 per piece. These t-shirts are 100% heavyweight white cotton variety.

Screen Printing Inks

I suggest you buy ink by the gallons.

You can safely use the amount of 5 cents per t-shirt for your pricing models.

Remember to price extra if you would be mixing to achieve desired ink color as mentioned above.

Silk Screen Printing

I suggest that you do a lot of preparatory work here such as having your screens ready for exposure when the job comes in. This will save you precious time in drying which is the most time consuming part of this process.

You can set $1.50 as the amount for the materials needed to prepare a screen for printing.

Silk Screens

These screens cost on average $25 apiece. They can be reused at least twenty times.

Pricing Matrix

As you get farther along in this business, you will find it practical to have a pricing matrix to follow.

This is good so you can have standard pricing be given to all of your customers. You and your employees will benefit greatly from this matrix.

A good matrix should take into account all the materials used and tasks involved in completing the printing job request. You can review again the items discussed earlier in this article to see what can be brought into your matrix.

Also, a good matrix doesn’t take into consideration how your competitors are pricing their jobs. The important factor here is what is your shop doing for their situation is probably different from yours. If you base it on your rivals’ prices, there is a good chance that you will get a distorted matrix.

Same matrix needs to be integrated with your proprietary invoicing system if you are using one. Doing this means that you are billing properly all the work that you have done.

Once the matrix is done, you have to put it in your schedule to review this at least on a regular quarterly basis. There will probably be changes on material costs and other items so it is important that you adjust this accordingly.

Profit Calculator

Having a profit calculator is another way of arriving at the right price to sell your t-shirts.

This is again to make sure that you are covering all your costs. If all of these costs are incorporated in your computations, there is simply no way that you will not be making money.

There are currently two types of costs that you will have to be aware of: overhead and specific job costs. Let me go over these two types of costs.

Overhead Costs

You can think of these costs as the structure needed to be setup and maintained in order for you to operate or print without a hitch.

These costs are your rent, utilities such as salaries (include yourself here), electricity, water, and heat, equipment, insurance, phone, and others.

Once you have computed for all of these numbers, add them all up. This will be your total overhead expense amount.

You will then have to divide this same total overhead expense amount with the average number of shirts that you will be printing for a month. You will now get your overhead costs per shirt per month.

This number is important for you to remember always for you will keep on referring to this amount when it comes time to compute for your total printing costs.

Specific Job Costs

There are many computations here and I will just simplify the formula used. I am indicating a letter behind each computation header so that the formula shared below will be easier to understand.

Number Of Hours For Printing Job (A)

You will find out how many hours it needs to complete the printing job.

This is equivalent to the number of print items in the job divided (/) by number of print items per hour.

Total Hours Needed For Printing Job (B)

This will include the time that is needed to complete the other tasks included in the printing job.

This is equivalent to the number of hours for printing job plus (+) number of pre-press hours plus (+) number of cleanup hours.

Number Of Hours Per Print Item For Job (C)

You will get to the specific number of time on a per piece basis to complete the job.

This is equivalent to total hours needed for printing job B divided (/) by number of print items per job.

Labor Cost Per Print Item For Job (D)

We will now compute for the labor costs for this specific job.

This is equivalent to number of hour per print item for job (C) multiply (*) by (labor cost on a hourly basis + taxes).

By this time, you should know how much it costs you on the labor front to finish this printing job on a per item basis.

I will now explain how to compute for the materials costs related to this printing job.

Cost Of Materials Per Print Item (E)

This will be part of the true costs for this specific printing job.

This is equivalent to number of screens multiply (*) by cost of screens added (+) to item cost multiply (*) by number of print items in job added (+) to total ink cost for job. The total computed will then be divided (/) by number of print items in job.

We can now finally compute for the total cost of each item in the printing job.

Total Cost Per Print Item For Job (F)

This is total amount related to the specific job costs. Remember that you will still have to add other components later to complete what you will be billing to your customer.

This is equivalent to overhead costs per shirt added (+) to labor costs per print item for job (D) added (+) to cost of material per print item (E).

Don’t give a number lower than this to your customers. This is your break even point. Anything less than this amount means you are losing money on the job.

There is good chance that if your competitors are also charging this amount to their clients that they are not making money with this job. Be wise about this and do not go into any price wars with them.

It is now time for you to compute for your markup. This markup is your profit for the printing job on a per item basis.

Profit Per Print Item (G)

This is the exciting part for you will effectively know how much you are making on this specific printing job on a per piece basis. From here, you can deduce as to how much is your income on extended periods such as weekly, monthly, or even yearly basis.

This is equivalent to total cost per per print item for job (F) multiplied (*) by desired profit shown in decimal point.

You are now ready to give to the customer how much he or she needs to pay you for this printing job.

Customer Price Per Print Item (H)

First, we compute on a per item basis.

This is equivalent to profit per print item for job (G) added (+) to total cost per print item per job (F).

To get to the total order amount, you simply multiply customer price per print item (H) with total number of print items in job.