You’ve mastered the heat press, your designs are getting rave reviews, and you’re producing high-quality custom apparel with Direct-to-Film (DTF) transfers. But one critical question remains: are you pricing your products profitably? Setting the right price is often the most challenging part of running an apparel business. Price too high, and you might scare away customers. Price too low, and you could be working hard for little to no profit.
Profitability isn't just about covering your costs; it's about building a sustainable business that can grow. A smart pricing strategy ensures you account for every expense—from the blank t-shirt to your own time—while delivering value to your customers and securing a healthy margin for yourself.
This guide will break down a simple, effective pricing formula specifically for products made with DTF transfers. We’ll walk through calculating your costs, factoring in labor and overhead, and setting a final price that helps your business thrive.
The Simple Formula for Profitable DTF Pricing
A reliable pricing strategy moves beyond guesswork. It’s based on a clear understanding of your expenses and your desired profit. Here is a foundational formula you can adapt for any product you create:
Total Costs (COGS + Labor + Overhead) + Profit Margin = Final Price
Let's break down each component of this formula.
1. Cost of Goods Sold (COGS)
COGS represents the direct material costs required to produce one finished item. For a t-shirt decorated with a DTF transfer, this includes two main things:
- The Blank Garment: This is the cost of the t-shirt, hoodie, or tote bag you are printing on. Don't forget to include any shipping fees you paid to get the blanks delivered to you.
- The DTF Transfer: This is the cost of the specific design you are pressing. The most effective way to calculate this is by determining your cost-per-design from a gang sheet.
Calculating Your Cost-Per-Design
Ordering your transfers on a gang sheet is the most economical method. To find the cost of a single design, use this simple formula:
(Cost of Gang Sheet + Shipping) / Number of Designs on the Sheet = Cost-Per-Design
For example, if you use our Online Gang Sheet Builder to fit 12 different 5"x5" logos onto a $15 gang sheet, your calculation looks like this:
$15 / 12 Designs = $1.25 per design
Now you have the two key parts of your COGS.
2. Labor Costs
Your time is valuable, and you need to pay yourself for the work you do. Even if you love the process, labor is a real business expense. To calculate this, first determine a realistic hourly wage for yourself. Then, time how long it takes you to produce one shirt from start to finish.
This includes:
- Prepping the garment (lint rolling, pre-pressing)
- Aligning and pressing the transfer
- Peeling and performing the second press
- Folding and packaging the final product
If it takes you 3 minutes to complete one shirt and your desired hourly wage is $20, your labor cost is:
($20 / 60 minutes) * 3 minutes = $1.00 per shirt
3. Overhead Costs
Overhead includes all the indirect costs of running your business that aren't tied to a single product. These are expenses you have to pay whether you sell one shirt or one hundred. Examples include:
- Website hosting or Etsy fees
- Design software subscriptions (e.g., Adobe Creative Cloud)
- Rent for your workspace or studio
- Utilities (electricity for your heat press)
- Marketing and advertising expenses
- Shipping supplies (poly mailers, boxes, labels)
The easiest way to account for this is to calculate a monthly overhead total and assign a small percentage to each sale. For example, if your monthly overhead is $200 and you plan to sell 100 shirts, you could add $2.00 in overhead to each item.
4. Profit Margin
This is the amount of money you earn on top of all your costs. It's the "profit" in profitability, and it's what allows you to reinvest in your business, buy new equipment, and grow. A typical profit margin for physical products ranges from 30% to 60%. For this example, let's aim for a 50% margin.
Putting It All Together: A Pricing Example
Let's use our formula to price a single custom t-shirt.
- COGS:
-
- Blank T-Shirt: $4.00
- DTF Transfer Cost-Per-Design: $1.25
- Total COGS = $5.25
- Labor: $1.00
- Overhead: $2.00
Total Cost to Produce = $5.25 + $1.00 + $2.00 = $8.25
Now, let's add a 50% profit margin.
$8.25 (Total Cost) * 1.50 (100% Cost + 50% Margin) = $12.38
You might round this up to a clean retail price of $12.50 or $13.00. At $13.00, your total profit on the sale is $4.75 ($13.00 price - $8.25 total cost).
Advanced Pricing Strategies
Once you have your base price, you can implement other strategies to increase sales and profitability.
Tiered Pricing for Bulk Orders
Customers who order in bulk expect a discount. You can offer this by creating a tiered pricing structure. Your costs decrease with bulk orders (e.g., lower prices on blank shirts, more efficient use of gang sheets), so you can pass some of those savings on to the customer.
- 1-10 Shirts: $13.00 each
- 11-25 Shirts: $11.50 each
- 26-50 Shirts: $10.00 each
Charging for Add-Ons and Customization
Don't give away extra work for free. Create set prices for common customizations.
- Adding a Name and Number to the Back: +$5.00
- Adding a Sleeve Print: +$2.50
- Using a Specialty Garment (e.g., premium fleece hoodie): Price based on the higher garment cost.
Positioning Based on Value, Not Just Cost
Remember that you are selling more than just a t-shirt. You are selling a custom design, a quality product, and excellent service. The speed and reliability you offer are part of your value. When you use a service like Southeast Prints with a 24-hour turnaround and same-day shipping (for orders placed by 1 PM EST), you can fulfill rush orders that other shops can't. This speed is a premium service that can justify a higher price point. You can find all of our timeline details on our FAQ page.
Price with Confidence
Creating a pricing strategy takes a little bit of work upfront, but it is the key to building a healthy, long-lasting apparel business. By understanding your numbers, you can price your products with confidence, knowing that every sale is contributing to your growth.
Ready to calculate your costs and start printing profitably? Upload your premade gang sheet today or use our Gang Sheet Builder and get high-quality transfers that give you the professional edge you need to succeed.