How To Price Print-on-demand Products: A 4-step Strategy

Calculating product cost and marketing costs helps you to estimate print-on-demand pricing correctly. For new merchants, it may be a bit challenging to learn how to price print-on-demand products. Let’s make this process much easier with the following straightforward guideline and example!

Step 1: Gather All Product Costs to Estimate Print-on-demand Prices

When selling print-on-demand products, here are the core expense that most print-on-demand businesses should include.

“Product cost = Design cost + Production cost + Shipping cost (optional) + Platform charge + Tax”

Design Cost

Design plays an important role in creating appealing print-on-demand items. The costs of buying designs, hiring an outsourcing design agency, an in-house designer, or designing yourself are different. You can indicate this cost with one of the following methods:

Tips: If you design yourself, you can skip design costs to offer a lower price. Or scroll to the end of this article to see the example.

💡 You may concern: How to Create Print-on-demand Designs: Basics and Straightforward Guideline

Production Cost

Production costs include all the expenses from fulfillment providers like white-label manufacturers, printing, shipping, etc. Print-on-demand fulfillment providers will charge the production price of the product and shipping when you send orders to production.

Each third-party print-on-demand company offers different production costs. Take time to find and cooperate with the best providers. At the bottom of this article, check it out for the top lowest-cost products to start a print-on-demand business.

Find the cheap products with best-quality to maximize profit

Shipping Cost

Since selling print-on-demand is a type of dropshipping, a third party will take responsibility for delivering products. Therefore, you can skip this cost.

You only need to add a shipping fee if you process and deliver orders yourself. Delivery companies may charge you a specific rate based on the product type, arrival, destination, shipping method, etc. There are two ways to add this cost:

• Charge your customers extra for shipping, and do not add to the product’s cost. It helps the price decrease and impresses customers at first sight.
• Offer a free shipping service, but include it in the product cost. Although it makes the retail price higher, customers are four to five times more likely to purchase a free-shipping product.

eCommerce Platform Charges

Most eCommerce platforms require users to pay a monthly cost. So it is essential to study their plan carefully to include it for print-on-demand pricing estimation.

eCommerce platforms may charge you a transaction fee for each product sold. The rate varies based on the pricing plan. Using your eCommerce platform’s payment gateway may be more affordable.

For example, if you set up stores in Shopify and use Shopify payments, you don't need to pay any transaction fee. While using third-party payment gateways like Paypal, Stripe often charges up to 2% per transaction. 2.6% + $0.30 per transaction are the charges for online credit card transactions.

You can choose a yearly plan to save money (Image Source: Shopify)

💡 You may concern: Etsy or Shopify? What Should You Choose to Sell Print-on-demand

Taxes

It is the legal regulation for print-on-demand products. It is typically calculated on the price the customer pays for the product (retail price).

Since the tax depends on the business location, customer’s address, and product type, it is impossible to offer a constant price internationally. The United States tax rate is from 4% to 10%, but some states don’t require it. This rate in European Union is higher, around 17% to 27%.

Tips: Since taxes vary and are extremely hard to collect globally, it is wise to consult a tax specialist to avoid legacy troubles. Let’s start with a specific region to simplify this task.

Now, it’s time to gather the above costs in a total value and move to the next step.

Step 2: Estimate A Profit Margin for Your Print-on-demand Product

Once you set a profit margin, you will earn interest on print-on-demand orders. For example, when it is 20%, it means you can make a profit at 20% of the product cost.

“The retail price = (100% + Profit margin) x Product cost”

It should reach your desired profit and target retail price. So that customers can afford your products. It is much more difficult to make a sale if you sell a product with the same cost as a competitor but a three-time profit rate.

You can search for an average profit margin of your product on the Internet

Step 3: Involve Other Costs To Price Print-on-demand Products

Other costs, including marketing activities, return, and guarantee services, often change monthly. With a budget, you can estimate monthly minimum orders to ensure profit. The formula is simple:

“Minimum orders (per month) = Other monthly costs ÷ Profit margin”

Now, let’s discover the way to estimate these costs!

Website Creation

Without an online store, it is impossible to achieve print-on-demand revenue. A good eCommerce website should have a user-friendly interface, a responsive design, fast loading speed, mobile-friendly, high security, and high SEO ranking.

Here are all the costs that you need to pay when opening an online store:

• Domain: You can buy the domain from eCommerce platforms like Shopify (from $14/year) or other companies like WordPress (from $9/year), Wix (from $14.95/year), Squarespace (from $20/year), etc.
• Hosting: Like domain cost, you also have two choices between self-hosting and eCommerce hosting services. Self-hosting, such as Share hosting, VPS, and dedicated hosting monthly, costs $2 – $500, adding an SSL certificate from $8 - $65 per year. While eCommerce hostings are often in their pricing plans.
• Website design: Hiring a code developer to create a user-friendly and easy-to-purchase website may cost $1.000 – $15.000. Modifying Shopify’s available themes is much cheaper. There are free and paid themes, from $150 to $350.
• Plugins and apps: You may need custom product builder, a website management app, etc. So, please don’t put it out of your pocket.

Creating online stores on an eCommerce platform is more cost-saving

💡 You may concern: Best Place to Sell Print on Demand With: 12 Free and Paid Suggestions

Marketing Budget

The marketing budget typically encompasses expenses through

• Analyzing your niche and target group;
• Making your product attractive to buy;
• Promoting and advertising products to customers through SEO, social media, and promotions;
• Delivering your brand in the market;
• Setting up marketing channels and sales network.

Return and Warranty Services

Calculating the monthly cost of your return and guarantee services needs data on

• The number of returns and the refund amount you expect to provide.
• Processing costs include the cost of processing returns and providing refunds, including shipping costs, labor costs, and any associated fees.
• Warranty costs mean the cost of repairing or replacing defective products, as well as any associated labor costs.
• Legal fees may arise if you need a lawyer to handle any legal issues related to returns or guarantees.

Extra: Don’t forget to add business management costs to price print-on-demand items. They may be labor salaries and benefits, office expenses, equipment, supplies, etc.

Step 4: Review Your Print-on-demand Pricing Strategy Regularly

When practicing how to price print-on-demand products, don’t skip reviewing your strategy periodically to make timely movement when the market change.

Research Market

Here are the most important things you should take notice of when reviewing the pricing strategy:

• Sales trends in the target areas include fulfillment provider adjustments, competitors’ changes, tax alteration, etc.
• Customer feedback on prices and services to meet the market demand.

Set a fixed time to review your print-on-demand pricing strategy

Select a Pricing Strategy

After having an overall of your niche status, it’s time to choose an appropriate print-on-demand pricing strategy. Have a quick tour to get five pricing strategies in marketing below!

• Competitive pricing is setting prices similar to or slightly lower than your competitors' prices.
• Demand or dynamic pricing is to adjust prices based on need. The higher demand, the higher price, and vice versa.
• Anchor pricing is to set a high starting price and then offer discounts or promotions to create attractiveness.
• Discount pricing is to offer products at a lower price for a limited time to increase sales.
• Penetration pricing initially sells low prices to gain market share and then gradually increases prices as the market becomes more established.

Check the comparison table here to make it easier to choose a strategy.

Print-on-demand Pricing Example for Personalized Mugs

You’ve got all the necessary steps to estimate print-on-demand pricing. Let’s practice with a personalized mug.

Product cost

With a profit margin of 20%, the profit is $1.94. The retail price of a personalized mug is $11,64.

Other monthly costs:

For the store that only sells personalized mugs, we have other monthly costs are $1.064; the profit is $1.94. The minimum number of orders per month you have to sell is around 548 orders ($1.064 ÷ $1.94).

Besides, to sell personalized mugs on Shopify, installing a product personalization app is essential. Among Shopify’s offers, Teeinblue Product Personalizer is the best choice for your print-on-demand stores. It offers a free 14-day trial and the transaction fee for a number of first orders at every pricing plan of Teeinblue for POD.

Bonus: You can earn profit the first time selling print-on-demand products when selling these low-cost but high-profit margin products below:

• Apparel, such as T-Shirts, Hoodies, and Kid’s Wear, bring a profit rate at an average of 5% – 20%.
• Tech Accessories, such as phone cases, laptop cases, etc., can give up to 40%.
• Home & Living decor, such as canvas art, poster, etc., can help you to earn 20 – 45%.

Pricing print-on-demand products can be a complex process since it requires a lot of elements. The most important things to remember are the target market and profit margins. Consider using one of the five print-on-demand pricing strategies above to launch successful sales campaigns. If you need further discussion about this topic, do not hesitate to comment on the below session.

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