Pricing Sublimation for Profit

Consider two ways to price your sublimation products.

Once you have a good representation of your cost to produce sublimatable items, you need to figure out the price of the product to reach your goals.

In this pricing, figure out what you will need to make from a profit perspective, making sure you cover your other costs, like rent, equipment lease payments and/or taxes, etc. To get to that final figure, there are several variations of pricing techniques that you could spend hours researching. Instead, let’s explore two common methods.

The first is a cost-plus markup method. This method is typically used by someone with an accounting or numbers-based background. In the purest form, you plug your cost to produce and then add a markup percentage to satisfy your overhead and profit needs. Using a sublimated mouse pad as an example, let’s say our markup percentage was 60 percent. You take the total cost to produce-adding the blank, paper and ink, pressing labor, packaging, additional labor, scrap and other, and outbound shipping-for a total of $7 and divide by .40 cents to come up with a sales price of $17.50 as your sell price. Now plug that into your spreadsheet and you have the selling price for all of your products.

The second method is market-value method. This method takes more time and research, but in my opinion, is the better way to determine your selling price. Start with a percentage value that is needed to cover your bills and take that percentage and add it to your cost to produce. Let’s say you needed 25 percent to cover your bills. You would take the same $7 cost to produce the product as outlined above and multiply it by 1.25 to come up with a figure of $8.75 each. Then you would go out and do some research and determine what the market will buy a similar product for. Let’s take the mouse pad example again. The average price you discover people are willing to pay for this product that is sublimated and delivered to their door is $15. You set your price at that level and continue to track the trends. Are they selling faster than you can make them? Maybe move the price up a bit. Are they sitting on a shelf getting dusty? Maybe it is time for a sale. This method is much more flexible and allows you to maximize your profits.

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