If we are in this industry as a business the goal is to turn a profit. Terry and Aaron have seen way too many businesses struggle just to break even and the main culprit is the inability to truly calculate their costs and then accurately set their prices. This week starts a short 3 part series where Terry and Aaron will discuss calculating your true costs of sublimation. Then they will dive into some pricing strategies and provide you with some great info that can help your business turn a profit.

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Calculating Your True Costs of Sublimation

Terry: So what are we trying to get out of this series of programs over the next 3 weeks?

This is a huge area we hear people struggle with all the time.

Not only costs but then how to price your products to maximize your profits

Found that people coming from Analog (SP) to Digital (Sub/DTG) really struggle

Terry: Why not just got these figures from the supplier and plug them into a spreadsheet?

Will a high-cost ink manufacturer really be the one to count on for this?

They will point you to other areas to look at and while it is not untrue or deceitful, it doesn't give you the whole picture.

They will make you focus on time, and we typically do completely undervalue that, the MFGs are going to way overvalue that so you feel like a millionaire day 1.

Terry: Then what is the formula to figure this out?

Want to be factoring in true costs of sublimation blanks and labor, plus a few other areas like the waste, inventory costs, and overhead.

In business for a while and really good at tracking, this is going to be pretty easy, but most are running a business, not conducting a scientific experiment.

We need a more round figure.  This info is from actual businesses, not MFG. Desktop printers on the market in the US are going to run about $1.00 per job and 44” printers are going to run about $0.05 for the same size job.

Terry: Can you give us an example then to help us figure this out?

Yes - Error on the high side as it is good to always make sure you can improve your bottom line, not break even.

Blank Face Mask = $3.20 (Do not forget to add the inbound freight into this figure as that can drastically change the cost of the blank. Buy enough quantity to gain price breaks, but not so much that you would not be able to sell that inventory in the course of 6-12 months. There are costs to carry inventory for extended periods of time.)

Paper and Ink = $.30 (As mentioned the printer you use can make a world of difference in this area...