Abort73.com > Gear > Abort73 Shirt Pricing and Profits
Abort73 Shirt Pricing and Profits
How we set our prices and where that money goes.
Page Summary:
Though the days of the $5 T-shirt may be gone, Abort73 T-shirts remain a vital part of our overall marketing strategy, and our current pricing model helps ensure that they remain financially viable for as long as this ministry is needed.
As 2009 came to an end, it become apparent that something had to give. Charging what we were, too much of our ministry budget was being tied up in shirt inventory, and it was taking us far too long to break even each year. As a result, we've had to content ourselves with selling fewer shirts (perhaps), ordering in smaller quantities, and pricing them at a level that will ensure their long-term, financial viability.
The pricing model we settled on works like this. We want to make a $4 profit on every shirt we produce – a profit that goes right back into the ministry. Because some shirts are used for display purposes, others are defective and still others are given away, we only expect to be able to sell 80% of our shirts at full price. So if we order 100 shirts, we want to make a net profit of $400. Since 20 of those shirts may never be sold at all, the $400 profit must be built into the first 80. For those with a math brain, here's the magic formula:
(Cost Per Shirt + $4) x 1.2 = Selling Price
Because virtually every shirt we sell has a slightly different production cost (based on number of print colors, complexity of ink placement, type of garment, and size of the run) the price of each shirt will be different. And whenever the same design is re-ordered, there's a good chance the new price will be slightly different from the old one. The cost of our most recent purchase of any given design will determine its current selling price on our website.
Though our focus has changed a bit from where we begin, our hope for each shirt remains exactly the same. T-shirts will likely never be a primary funding source for Abort73, but this model will at least make them self-sufficient and will help put our donor dollars to more effective use.
