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Adjusting Your Business Model for DTG

(April/May 2017) posted on Tue May 30, 2017

Overcoming the challenges of direct-to-garment printing.


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By Aaron Montgomery

To calculate this, factor in times for setup, pretreatment, and underbase printing for dark garments, loading and unloading, and curing. Use the hourly rate of a trusted employee as your base. Take the time to understand how long these steps really take; don’t just guess what you think you should make per hour. Be careful that you don’t price yourself out of the market or end up making no profit at all. 

Packaging

Even if you’re planning to hand-deliver the finished product to the customer, as a legitimate business, you’re going to put the finished goods in some sort of a package. Remember the idea of perceived value; it starts with presentation. 

Additional Labor

Consider the time it takes for an employee to take an order, as well as the time it takes to package and handle the job before delivery. 

Scrap, Maintenance, and More



Whether you like it or not, some shirts you print simply won’t make the cut. If an error occurs in production, there’s no fixing it. You must make a new one. Even the most efficient production facilities should consider a defect rate of 3 to 5 percent. Also factor in items like silicone and machine maintenance. 

Creating a Pricing Strategy

Just like costing, this is an area where I see many screen printers struggling with DTG because they are trying to fit it into their current price list. It’s important to think differently about how you price your digital decorating. Ask yourself, “Where can we gain efficiencies?” (Hint: It’s not from printing the same thing over and over.) With DTG, it’s not a “win” to print a one-colored job with block text and no gradients. Your efficiencies come from eliminating the initial setup and the speed at which you can print just one shirt. 

To set your pricing, you must figure out what you will need to make from a profit perspective, as well as making sure you cover your other costs, like rent, equipment lease payments, taxes, etc. Several pricing techniques can help you get to that number. Let’s explore two common ways.


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