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.
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.