When you're ready to list a new Print on Demand product, one crucial question pops up: What price should you set? Essentially, when determining your price, you need to ensure three key things:
You're calculating your product cost accurately.
After deducting all your costs from the price, you're left with a sufficient profit margin. I usually aim for at least $10 profit after all expenses are paid.
Your price is competitive in the Etsy marketplace.
Let's use a hypothetical scenario where I plan to list a product that I'll fulfill through Printify.
Calculating Your Cost and Profit Margin
First, it's essential to figure out how much it will cost to fulfill the product through Printify. Printify charges $13 to manufacture the product, and an additional $4 for shipping to the customer, bringing the total product cost to $17.
Next, consider the Etsy fees. Etsy charges a $0.20 listing fee. Upon sale, Etsy takes a 6.5% commission, plus a 4% transaction fee with an additional $0.30 for payment processing. These fees are calculated based on your selling price. For simplicity and accuracy, I usually approximate Etsy's fees to about 13% to gauge my profit at various price points. I also aim for a minimum profit of $10 per sale.
Printify cost -$17
Etsy fees - approximately 13% from the price you set
Desired profit - $10
So, if I set my price at $30, Etsy takes its 13%, leaving me with $26. After paying $17 to Printify, I'm left with a $9 profit. To reach my $10 profit goal, I'd need to slightly increase my price to around $31.50. This price works well for me as it covers production costs, Etsy fees, and leaves me with my desired profit.
Remember, there could be additional expenses involved in running your business, like Etsy ads, but product fulfillment costs and Etsy fees are universal expenses for all Etsy POD sellers.
Competitive Pricing Research
After settling on a comfortable price point, it's important to research the market to ensure your price is competitive. I'll look for similar blankets on Etsy, paying close attention to size and material to ensure I'm comparing similar quality products. Suppose my research shows that similar blankets sell for $30-$35. In that case, my $31.50 price is competitive.
However, to attract more customers, I'm considering a 20% sale. It's important to remember that Etsy applies discounts to the listing price you set. So, if I still aim for a $10 profit post-discount, I need to adjust my price accordingly. By setting my price at $40 and applying a 20% discount, customers will pay $32 for the blanket. This price covers my costs, Etsy fees, secures my $10 profit, and remains competitive within my product segment.
In conclusion, I'll set my listing price at $40 and offer a 20% discount to balance between covering costs, earning a profit, and staying competitive.
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