Pricing your items is a difficult task, yet it is one of the most important aspects of running a business. However, the price of your print on demand products influences how well your online business performs in comparison to competitors, as well as how much profit you generate. As a result, it is critical to price your product wisely to avoid going bankrupt in business.
FOUR STEPS TO PRICE YOUR PRINT ON DEMAND PRODUCTS
Step one: Determine the cost of your products.
The most crucial goal of your product pricing is to keep your business running. However, before worrying about how your pricing compares to your competitors or how well your prices match customer expectations, you must first establish a viable base price.
The overall cost of creating and selling your product is referred to as the product cost. In addition, if you sell print on demand, you’ll start with the price you pay for each item’s production. However, there are other costs to consider.
1. Costs of Design
Outsourcing design services
One method to consider design costs is to split the amount you pay the designer by the number of product units you intend to sell. Moreover, it is essential to release the design in a limited quantity or as a limited-time offer, as this limits how much profit you can make from it.
You create your design.
If you create your designs, it’s tempting to disregard design costs to keep the selling price low. However, that is still significant time spent on your product, so make sure you get compensated for it. Furthermore, create a reasonable hourly charge for your labor. Then add it to the price of the product. In addition, it will also help determine the effectiveness of the time you spend working on your business.
2. Costs of Production
The production cost is included in the price you pay for each item using eCommerce fulfillment services. As a result, it is critical to understand how much each item costs to make and consider it into the pricing of your product. In addition, choosing professional eCommerce fulfillment providers will supply you with high-quality products at a reasonable price. For example, even though your product is pricey because of its high quality, your customer will still purchase it.
3. Costs of Shipping
Charge a shipping fee to your customers
While your ecommerce fulfillment center will ship items for you, your customers will be charged an additional fee. However, the shipping cost will vary depending on the product, fulfillment location, and final destination. Moreover, you should think about what sort of shipping rates to provide your customers, and if you pick a fixed fee, make sure it covers the rate your print on demand supplier charges you.
Offer free shipping
Another option for dealing with shipping is to provide free shipment instead of charging your customers more. In addition, customers are four to five times more likely to purchase anything if you provide free shipping. Include the rates in the basic price of products, and eliminate the need to pay for shipping out of pocket.
4. Costs of Taxes
Providers may impose VAT on your orders depending on where your end customer lives. In addition, you may be required to collect tax from your customers as well. Moreover, depending on the circumstances, you may incorporate these costs into the price of your product. However, there is no way to estimate the precise pricing unless you know where your customer is located. As a result, it is essential to consult a tax professional about your unique circumstances to determine what you need to keep in mind when calculating taxes for your product pricing.
5. Per order platform fees
To sell online, you must use one of several platforms. However, there are several fees to consider while setting up and maintaining your online business, ranging from eCommerce platforms and marketplaces to payment processors. In comparison, some of these platforms have a set price. Furthermore, others charge you a percentage of your sales in addition to a fee for each listing you create.
Step two: Apply a profit margin.
Once you’ve gathered all of your variable product expenses, tally them all up and factor profit into your price. Furthermore, it is where you can experiment and have fun. Moreover, adjust your profit to equal or outsell the competition, and experiment with alternative price methods. In addition, consider the broader market, and ensure that your pricing remains within the overall “acceptable” price range for your market. Simultaneously, bear in mind the labor you put into your shop, and don’t go too low. Moreover, once the profit margin has been determined, it is necessary to consider the additional costs that you must pay.
Step three: Add up all other costs
There are numerous other costs associated with running an online business, aside from the money spent on shipping the product to the customer. Fixed costs, such as monthly eCommerce platform subscriptions and other services, as well as your advertising budget and internet bill, all add up. Furthermore, divide all of your monthly costs by your profit margin to get how many products you’d need to sell in a month to break even. However, if the minimum number of designs to sell or the selling price becomes unattainable, you must either alter your expenditures or reduce your expenses. Finally, balancing your budget will be a continual effort, and you must be prepared for it.
Step four: Monitor your prices regularly
Pricing is not a decision that you will make only once. While one reason to modify your rates is to ensure that you pay all of your costs and hard work, another is to experiment with different pricing techniques as a selling tactic.
To summarize, your retail pricing should include all of your product expenses as well as your profit margin. In addition, your product expenses may include the price of developing, manufacturing, and shipping, as well as taxes and platform fees per order. However, you can alter your profit margin as you see fit and as your competitors require, but keep in mind other costs and the minimum number of orders you must sell to pay them.
READY TO START SELLING?
Now that you’ve learned how to price your print on demand products. It is now time to choose a top eCommerce fulfillment company that can help you fulfill all your orders at an acceptable price. Learn more about our services. Contact Fulfillplex now at our contact page or visit our website and get a quote.