Selling T-Shirts to Retailers

Granata

I have a shirt that I sell well to a large niche of the American population via my online store at birddoctor.biz.  Now I am interested in having the design mass produced and sold to retailers who serve the same niche.  The main group of people buying these shirts would appreciate the shirts being American Made and, in the interest of making the most profit possible, I have some questions.I work with a screen printer already and I can get these shirts made for about $3.00 a piece if ordered in quantities of 300 pieces (a safe start).  The way my printer works is he buys the blanks from his supplier and then prints them in his shop.  Would it be easier to use a clothing manufacturer who can fabricate the shirts as well as print on them?  Does such a company exist?If the shirts came from a supplier and had tags on them, would it be wise to have the shirts re-tagged with my brand?If I am selling to retailers, should I not put hang tags or stickers on my shirt?  Or are they cool with stuff like that?  The retail shops that they would be sold (hopefully) to are small company owned type shops.  I don`t think there would be any corporate red tape to sort through.Let`s say these shirts cost me $3.00/piece to produce.  How much should I sell them to the retailer for?That`s it for now.  I look forward to hearing what people think.

MNGrillGuy

I think a 100% mark-up would be justified.  SRP of $12-$15 seems appropriate for a T-shirt.  Retail mark-up of 100-150%.

robertj

I recommend against establishing a sell price based upon the cost to manufacture. If you are selling the shirt today, you know what people are willing to pay for it. Retailers want to make a 50% margin on apparel (100% mark up) so you will have to sell to them for one-half the retail price.
Will that number provide your company with enough gross profit to cover your expenses and leave something as a profit? Your financials should give you this answer. If the answer is no then you have to reduce your costs or show that the product will command a higher retail price.

Granata

Right now the shirt sells for $15.00 on my website.  If I have these shirts made for brick and mortar stores then there will be a significant increase in quality (better blanks, screen printed instead of direct print).  I`m not sure if that means that they could retail for a higher price.Using the process that I currently have researched and mentioned in my first post and using the formula presented by Robert, the retailer could sell these shirts for $15/piece, I sell to the retailer for $7.50/piece making $4.50 profit/piece.That seems reasonable.  Of course there are factors like how valuable my time is and is it worth my time trying to get retailers to pick this up.

robertj

The retail price of a T-shirt has more to do with the perceived value - which is related to what is printed on it. I`ve seen prices from 3 for $10 to over $20 each. So what is the "right" price for yours?
Consider the volume /price variables. How many less would you sell if you raised the price to $20 or How many more if the price were $12, etc. Run the numbers and see how the bottom line changes -if it does. Remember, since reducing your sales price directly reduces your gross profit, you have to sell a lot more to generate the same GP dollars.
 

Granata

Robert,I understand perceived value.  In all honesty, this shirt could probably sell for $20, however, is a retailer willing to set their price that high?  When I pitch this shirt to the retailer do I bring a SRP with me and is that what they base their decision on, my SRP?

infinique

I think at $3, your margin is too little for you to anticipate the unsold goods just in case it does not take off.