Last Updated on: 26th November 2021, 09:45 am
Pricing your products for a print-on-demand business is the most important decision you have to make for your online store. It includes everything like business finance, staff, rent, and other miscellaneous expenses. Moreover, you are not going to make this decision once.
Deciding your product price in a print-on-demand business depends upon how well you sell and where you stand among your competitors.
Pricing Strategies for Print-on-demand Business:
In this blog, I will be sharing with you eight simple strategies for pricing your print-on-demand products.
01. No Particular way to Pricing:
There is no particular way to pricing your products, and there are certainly isn’t a perfect price. I can go out and share it with you.
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Pricing your products is the most crucial business objective to grow and sustain itself in the market.
Before worrying about pricing your products to your competitors, you need to make sure that you have found a long-term base price.
If you price your products at a loss, it’s going to be almost impossible to grow and scale your print-on-demand business.
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That is why it is essential to access your pricing. Product cost is the total value you spend to create and sell your product.
If you sell print-on-demand or drop shipping products, you’re going to start with the price you pay for each item’s production.
Moreover, pricing is not limited to procuring or shipping a product, particularly for print-on-demand business.
More to say, it is the design cost that you shouldn’t miss out on.
02. Determine print-on-demand pricing For Designs:
If you’re outsourcing design services, one way to take the pricing costs in mind is to divide your pay to the designer with the number of product items you expect to sell.
It is especially crucial to release the design on a limited volume or as a limited-time offer since that narrows how much you can profit from that design.
However, sometimes you can’t be sure how many designs you’ll sell. If this is the case, you can go the other way around, and once you have your price and know your profit margin.
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Se how many units of products you need to sell at your chosen price.
This way, you’ll at least know the minimum number you need to sell and can adjust your profit margin if you think the number is too high.
If you create designs yourself, it’s tempting to ignore design costs to keep the retail price low.
Of course, many tools will help you create designs, like ImprintNext Product Designer Tool.
My best suggestion is to come up with a realistic hourly rate for your work. Then add that to the product cost.
It will also help you evaluate the effectiveness of the time you spend working on your business.
03. Production and Shipping costs:
My best suggestion is to come up with a realistic hourly rate for your own work. Then add that to the product cost.
It will also help you evaluate the effectiveness of the time you spend working on your business.
If you opt for print-on-demand services, then shipping can add an extra cost to your customers.
You need to consider what kind of shipping rates to offer your customers and, if you choose a flat rate, make sure that covers the rate your shipment provider is charging you.
Most importantly, the shipping price will vary based on your product, fulfillment location, and end destination.
The shipping price will vary based on your product, fulfillment location, and end destination.
A study found that customers are 4 to 5 times more likely to buy something if you offer them free shipping.
You can do that by including the rates in your product base price, so you don’t have to pay for shipping out of pocket.
Even if it makes your product prices higher, shoppers can’t resist getting something for free.
It’s all about knowing the psychology of your customers.
04. Taxes Included:
Doing any business is not only about what you earn, but also to contribute your country as per the taxation laws.
You may be charged taxes on your orders, such as Sales Tax in the US, VAT in the EU, or GST in Australia.
You may also be liable to collect tax from your customers. Depending on the situation, these expenses may also go into your product price.
The sum may vary from 4% to 10% in the United States and from 17% to 27% in the European Union and may be calculated from a different base price in each place.
There is no way to predict the exact rate before you know the location of your customer.
We strongly recommend you consult a tax specialist on your specific situation to determine what you need to have in mind when calculating taxes for your product price.
05. E-commerce Platform Fees Per Order:
And finally, to sell online, you’re bound to use one platform or another.
From eCommerce platforms and marketplaces to payment processors, there are various costs that you have to keep in mind when setting up and running your online store.
More to say Etsy,3dcart charge you a percentage of your sales, on top of collecting a fee for each sale you make.
Some payment processors like PayPal are free to create an account and connect to your store but charge a transaction fee.
Make sure you are aware of any fees and put those up with your product costs as well.
06. Fix A profit Margin:
Once you’ve got all of your variable product costs together, add them up and count in profit into your price.
That is where you can stand unique to your competitors. Adjust your profit to match or upsell competitors and try out different pricing strategies more on them later.
Considering the overall market, and make sure your price still falls within the overall “acceptable” price for your market.
If you’re selling at a price two times higher than of all of your competitors, it might be challenging to make a sale.
At the same time, keep in mind the work you put in your store and don’t go too low.
If you’re putting in long hours and the profit margin doesn’t cover all that work, you need to reconsider your margin or how effective you are when working on your store.
Once you set a profit margin, say 22%, it is time to keep in mind that your profits cover personal and store expenses, i.e., total costs.
07. Sum Up Your Costs:
There are many other costs involved in keeping up an online store, not just what you have to spend to get your customer’s product.
Fixed costs like monthly eCommerce platform subscriptions and other services, your advertising budget, and internet bill—all of that adds up.
How many products do you need to sell in a month?
Monthly expenses/profit margin= number of products you need to sell in a month.
That is how you can determine the number of products you need to sell in a month to earn a better profit for yourself.
Balancing your budget will be an ongoing process, and you need to be prepared for that.
To sum up, your retail price should consist of all of your product costs plus your profit margin.
Your product costs may include designing, production, and shipping costs, as well as taxes and platform fees per order.
You can adjust your profit margin as you see fit and what your competitors dictate.
Be sure to consider other costs and calculate the minimum number of orders you have to sell to cover them.
Then you come to analyzing your prices regularly.
08. Perform price evaluation periodically:
Pricing is not a decision that you’re only going to make once.
While one reason to change up your prices is to make sure you’re covering for all of your costs and hard work.
Secondly, you are trying out different pricing strategies as a selling tactic.
A big part of picking your price is making sure that it falls within your market’s overall acceptable price range.
You might find sales become challenging if you’re selling at a price two times higher than of all of your competitors.
But, there is away. To do market or competition-oriented pricing, you have to start by comparing your products with similar items on the market and see what the average price is.
There are three ways to can choose your pricing for print-on-demand business:-
- Price more than the average market price by adding more value to the shopping experience. You can add gifts or personalized messages to each order or go for a higher quality visual presentation.
- Pricing the same as the market – This is a safer bet if you want to cover a large target audience and still make some profit. It will put you in the same price league as your competitors, and you’ll be able to attract the exact consumer audience they do.
- Pricing below the market average – This way, you can undermine your competitors with more attractive prices, possibly steal some of their customers. But be careful. If you severely underprice a product, it can fail to cover all of your costs and even seem scrappy to your customers.
I recommend you set up a lower starting price than the average market price and then frequently host sales, drawing in bargain shoppers. With this strategy, you’ll receive most of your sales in a lump sum.
Lastly, the eight strategies for perfect pricing of products will help you along the way to set up your print-on-demand online business. Those who have just begun their print-on-demand eCommerce business can go over their product costs and see if there have been some changes. They may try out something new while updating prices.