The actual profit margin will depend on your costs and what buyers are willing to pay. I don’t have the space or the labor to manufacture t-shirts myself. That’s way too much overhead for me, and probably for you too. Instead, we will consider three ways of selling for-profit T-shirts and the profit margins for each.
FYI, thanks to AI imagery software, we’re able to create very specific fashion and hairstyle examples to illustrate the points being made. In some cases, imagery is exaggerated to hammer home the point.
T-shirt Profit Margins When Buying Bulk and Reselling As Is
A savvy entrepreneur would purchase t-shirts that have passed quality inspection. It’s possible to buy T-shirts that did NOT pass quality control and have noticeable flaws like holes or stains for $1 per t-shirt or irregulars that are slightly less defective for as low as $1.89. But, if you are reselling for a profit, you probably want the shirts to be free of defects.
I found 100% cotton, quality inspected, adult men’s t-shirts for $2.18 each when purchased by the dozen. How many do we think we can sell? Let’s go with 100. The cost to buy 100 t-shirts at $2.18 each is $218.
Ok, super. Now, I’ve got to sell these at a profit somehow.
Assuming that 100 people are willing to purchase a plain white t-shirt, and the customer isn’t local, there will be shipping costs, which we can estimate at 3.99 each.
It’s a plain white t-shirt, so I don’t expect people will be willing to pay much for it. I’d probably need an excellent copywriter to make the case that anyone should purchase this shirt for $8 from me when they could get it for $5 elsewhere. A copywriter might charge $50 for something well written. I can advertise for free on the Facebook marketplace or set up an Etsy shop.
Let’s say I take my compelling ad copy and bet $50 in ad costs that I can sell my 100 shirts. $50 for the copywriter, $50 for the ads, is $100, which is $1 per shirt. I need to add the shipping cost of $3.99 each, which means I need to add $4.99 to the $2.18 I paid per shirt to get my break-even cost: $7.17 per shirt.
Now, I can mark up the selling price however much I like; it just has to be a price people are willing to pay for my shirt. If I mark the price up by 30%, the selling price would be $9.32, so let’s round up to $9.50. If this works, 100 shirts will bring in $950 in revenue minus my costs of $717, leaving me with a net profit of $233, a 25% profit margin.
T-shirt Profit Margins DIY Design and Printing
Let’s say I want to get a bit more serious in my efforts and add some value to the plain white t-shirts. If I want to add value, I need to add meaning to the t-shirt. How do I add meaning and value? I need to identify a niche. A niche is a group of people interested in something that has meaning for them.
Let’s use astrology as an example. I have shirts by the dozen, and there are 12 zodiac signs, so I can add a design for each sun sign to the shirts and then target that specific market to sell them.
Next, I need a vector design. If I’m handy with graphic design programs, I could make one myself, and it will cost me nothing but time. I could also use a platform like Fiver to hire someone to design the shirts. In this case, I’d need 12 different designs. Suddenly, the zodiac sign idea seems like it could get expensive.
I found a commercial license for a set of ready-made vector illustrations for $9.60 on an artist’s selling platform. Be sure to read the terms of the license before using the designs.
So now I need to put this design on the shirts. I could go the print-on-demand route to do this. Print-on-demand companies will print the designs on t-shirts, but I’d have to buy the T-shirts from them, and they charge far more than the $2.18 that I paid for the T-shirts I already have.
I’ll go the DIY method and transfer-print the design onto the shirts myself. I already have an inkjet printer, so all I need to do is purchase some iron-on transfer paper for t-shirts which I found on Amazon for $1 per sheet. I need 100 sheets, so that’s $100. So far, my total cost is $327.60. So the cost per designed ready-to-sell shirt is $3.27.
But where do I sell them? I’ll run a FaceBook ad targeting astrology lovers and their friends; or open an Etsy shop. Either option comes with minimal costs. I will need to estimate that shop set-up, and my ad will cost around $50.
I will limit my audience to the US and estimate a $3.99 shipping cost, which I will pass on to the consumer by adding it to the selling price of my shirt. My break-even selling price: $7.77. If I mark the shirt up by 30%, that adds $2.33, 40% would mean a profit of $3.10, 50% would mean $3.88 profit per shirt, and so on.
Again, the profit margin is determined by my costs and what people are willing to pay. If I am already a famous brand, I could set my selling price at any number I like – $35, for example. I’m not famous, so I think I can sell these shirts for 14.99. If all goes well, my total revenue will be $1499. Subtracting my total costs of $777 leaves me with a net profit of $722, a 48% profit margin.
Tshirt Profit Margins Selling Through Print on Demand
A final option to sell a t-shirt for profit is to use one of the many print-on-demand platforms. The benefit is that I won’t have to worry about being stuck with 100 t-shirts if they don’t sell. The downside is that I will pay more per t-shirt. However, they will handle the printing and the shipping (I’ll still need to include the shipping cost in the selling price), but it’s an easy way to put my t-shirt on the market. I’ll still need to advertise too.
It better be a unique shirt if I want to profit. Print on demand charges $12.50 for the same shirt I paid $2.18 for in the previous examples. Add shipping of $3.99 Advertising $50, and I need to sell the shirt for at least $16.99 to break even. If I sell this shirt for $24.00, I’ll have $2400 in revenue minus my costs of $1699, leaving me with a net profit of $701, a 29% profit margin. Just a little less than in the previous scenario, but it was less work.