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 shirts remain a vital part of our overall marketing strategy, and our evolving pricing model helps ensure that they remain both affordable and financially viable–for as long as this ministry is needed.
Any money Abort73 makes selling T-shirts goes back into the marketing and development of Abort73.com. From the outset, our goal has been to put as many Abort73 shirts into the public square as we possibly can. First and foremost, they are walking Abort73 billboards, not profit generators. For the first couple years, we sold shirts at ridiculously low prices. In the span of two summers, we sold more than 10,000 shirts for less than they cost us to make. And for more than a year, the Abort73 web store offered a pay what you can afford model called "Flex Pricing." It gave people with little cash the option to buy shirts at cost, while giving those with more money the option to pay extra. Though the approach helped us sell a lot of shirts, almost everyone defaulted to paying the lowest price. Who can resist a great deal?!
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. So we bit the bullet and raised our shirt prices. We also moved away from charging the same price for each shirt and started pricing them individually (based on number and placement of print colors, type of garment, and size of the run).
Our pricing model took the production cost of each shirt, tacked on a $4 profit, and then divided by 80% to arrive at the selling price. We divided by 80% on the assumption that only 80% of the shirts we printed would actually sell at full price. Some are used for photo or display purposes, others end up with print or manufacturing defects, and still more are given away or sold at discount.
As expected, we saw a significant reduction in the number of shirts sold. We also saw a much-improved bottom line, so much so that we began offering bulk discounts in the summer of 2009. Buying 2 or more shirts earned the buyer incremental, 5% discounts–all the way up to 30% for those who ordered seven or more shirts. From June through October of 2009, the shirt breakdown looked like this:
32.4% sold at full price.
23.5% sold at 5% discount.
13.0% sold at 10% discount.
7.6% sold at 15% discount.
3.0% sold at 20% discount.
2.9% sold at 25% discount.
17.6% sold at 30% discount.
The average Abort73 shirt costs $6.85 to make. With our 2009 pricing structure, that shirt would sell for $13.56. Selling at full price, the profit would have been $6.71*. Selling at a 30% discount, the profit would be $2.64*.
In 2009, we sold an average of 872 shirts online each month. Through the first 10 months of 2010, our monthly average was 278 (an interesting numeric reversal). In looking at the numbers during our 2010 board meeting, we felt we were in position to be able lower our prices once again–not all the way to our pre-2010 levels, but down from where they were for most of the year. We moved the baseline profit from $4 down to $2. Our new pricing equation looks like this:
(Cost Per Shirt + $2) ÷ .8 = Selling Price
On average, this lowered the price of each shirt by $2.50. For shirts that cost more to produce, the savings is more and vice versa. A shirt that costs $6.85 to make now nets a $4.21* profit at full price and a $0.89* profit at 30% discount.
Though our price structure has changed over the years, our hope for each shirt remains exactly the same. T-shirts will likely never be a primary funding source for Abort73, but we want to make sure they don't bleed our ministry dry either.
Updated sales figures are posted each month to Abort73's budget page.
*These profit numbers don't take into account variable credit card fees (30¢ per transaction + 2.9%), which can reduce our per shirt profit by up to 68¢, or the percentage of shirts that aren't able to be sold.
RETURNS/EXCHANGES
Abort73 garments may be returned or exchanged with the following qualifications:
- Returns/exchanges must be postmarked within 30 days of item receipt.
- Items must be in like-new, unwashed condition.
- If requesting a refund or exchange, shipping charges will not be reimbursed.
- Exchanges for a less expensive garment will result in a partial refund. If you would like to exchange for a more expensive garment, you will be sent an electronic invoice for the balance. Once the shirt(s) being exchanged are received, we will reship to you one time at no additional charge.
- Clearance items are not eligible for return or exchange.
Refer to the included packing slip for further instructions on where to return the shirts and how to specify exchange requests.
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