How to Price a Custom T-Shirt So You Keep 40 Percent
You made a shirt you love. You listed it at $18 because that felt fair. Three weeks later it has two favorites and no orders, or worse, it sold and you worked out later that you made about a dollar.
This post is for hobby designers and new Etsy sellers who make custom T-shirts and want a straight answer on how to price custom t-shirts for etsy without guessing. You will list every cost, including the ones that hide, work a full example with real numbers, and finish with one formula that gives you a price that keeps 40 percent after everything is paid.
Grab a calculator and the invoice from your last box of blanks. The numbers below are examples, so swap in your own as you go.
Why guessing your shirt price costs you sales
Most new sellers price by looking at three listings that seem similar and picking something in the middle, or slightly below. It feels safe. It is not.
Guessing hurts you in two directions. Price too low and every sale costs you money or pays you pennies. You get busy, you get orders, and your bank balance does not move. Worse, you cannot afford to run a sale, pay for a better photo, or test a new design, because there is no margin to spend.
Price too high without knowing why and you cannot defend it. You do not know whether the shirt is expensive because your costs are real or because you got nervous. So you shave it down at the first quiet week, and the cycle repeats.
A known number fixes both. When you know that $30.20 is the lowest price that keeps 40 percent, you can set the price with confidence, decide how much of a discount you can afford, and stop second-guessing every listing.
The four costs most sellers forget
Everyone counts the blank shirt. Most people count the ink or vinyl. These four are the ones that quietly eat the profit.
1. Postage. If you offer free shipping, which many buyers expect, the postage comes out of your price. A single tee in a poly mailer might cost around $5.00 to send in the US. Check your own label cost, not a guess.
2. Packaging. The mailer, a thank-you card, a sticker, tissue paper. Add them up for one order. Even $0.80 matters when your margin is a few dollars.
3. Etsy fees. At the time of writing, Etsy charges $0.20 to list an item, a 6.5 percent transaction fee on the sale, and a payment processing fee of about 3 percent plus $0.25 per order in the US. Rates change and vary by country, so check Etsy's current fee page before you do the math.
4. Print waste. Misprints, a shirt with a stain, a transfer that peels. If one in twenty shirts is ruined, that is a real cost spread across the other nineteen. Track your own waste for a month and add a small allowance per shirt.
Two more worth knowing about: if you join Etsy's offsite ads, a further fee applies on orders that come through them, and any coupon or sale comes straight off your margin. We will deal with sales in a later section.
Worked example: one shirt, real numbers
Here is one shirt, sold with free shipping, printed at home with heat transfer. These are example costs, so use your own.
- Blank mid-weight cotton tee: $6.50
- Transfer materials and ink: $2.50
- Packaging: $0.80
- Postage, one tee in a poly mailer: $5.00
- Listing fee plus the $0.25 payment processing charge: $0.45
- Percentage fees (6.5 percent transaction plus 3 percent processing): 9.5 percent of the price
Now see what happens with the common mistake. A seller counts only the blank and the transfer, which is $9.00, and doubles it. Price: $18.00.
At $18.00, the percentage fees are $1.71. Total costs: $6.50 + $2.50 + $0.80 + $5.00 + $0.45 + $1.71 = $16.96. Profit: $1.04. That is a margin of about 5.8 percent. Ten orders earns you ten dollars, before you count a single minute of your time.
This is why a cost-plus markup on the visible costs fails. The hidden costs are bigger than the visible ones.
How to back into a 40 percent margin
Do not add a markup and hope. Work backwards from the margin you want. Margin here means the share of the sale price left after every cost, including fees.
The formula has three steps.
Step 1. Add your fixed costs per order. Blank, transfer, packaging, postage, and the flat fees: $6.50 + $2.50 + $0.80 + $5.00 + $0.45 = $15.25.
Step 2. Add the percentage items together. Fees are 9.5 percent and your target margin is 40 percent, so 49.5 percent of the price is spoken for. That leaves 50.5 percent to cover the fixed costs.
Step 3. Divide. $15.25 divided by 0.505 equals $30.20.
Check it. At $30.20 the percentage fees are $2.87. Total costs: $15.25 + $2.87 = $18.12. Profit: $12.08. Divide by $30.20 and you get 40 percent.
In practice you would list it at $30.99 or $31.00, which lifts the margin to about 41 percent and gives you a little cushion for waste. Keep the formula in a spreadsheet. When postage goes up or your blank supplier changes the price, change one cell and the new price appears.
One honest note: 40 percent is not your wage. It is what remains to pay yourself, buy new designs and cover things like software. If printing a shirt takes you ten minutes, that $12 is decent. If it takes forty, you have a different problem, and the fix is faster production or a higher price.
When a higher price sells better than a lower one
New sellers often assume the cheapest shirt wins. On handmade and custom items, that is often wrong, for a few reasons you can test yourself.
A very low price can signal a mass-produced shirt. Someone looking for a funny shirt for a sister's bachelorette weekend, or a mug with a dog's name on it, is buying a gift. Gifts are not bought on price alone. They are bought on whether the item looks careful.
So spend your margin where the buyer can see it. A better blank. Clear photos on a plain background in daylight. A listing that says exactly what size range, fabric and turnaround time to expect. Then price accordingly.
Here is a test that costs nothing. List the same design at your formula price for two weeks and watch views against orders. If people view it but do not buy, the problem is more likely photos or the title than the price. If you drop the price and still get views without orders, you have confirmed that. Change one thing at a time and write down what you changed and when.
Plan for discounts before you offer them. A 20 percent sale on our $30.20 shirt drops the price to $24.16. Fees fall to $2.30, costs are $17.55, and profit is $6.61, which is a 27 percent margin. That is still a profit, but it is a decision you can make on purpose. If you want to run sales, build the sale into the starting price instead of cutting into your 40 percent.
Check your numbers against the pricing page
Once you have your formula price, test it before you publish.
First, run the formula for each product, not just shirts. Mugs and tote bags have different blanks, lighter postage and different fee totals, so each needs its own price.
Second, look at what similar sellers charge for comparable items and see where yours lands. If you are well above, check whether your costs are higher than theirs or whether your presentation justifies it. If you are well below, you probably missed a cost.
Third, read the Getcraftee Pricing page as a sanity check on how we think about margins, fees and postage across product types, then compare it to your spreadsheet.
If your numbers still look odd after that, the cause is usually one of three things: postage priced from memory, a blank bought at retail instead of in bulk, or free shipping that was never built into the price. Fix those before you touch the design. And if you are still working out which niche to sell into, the Getcraftee Launch Kit walks through that in its 30-day plan, from niche to first 25 orders.
What to do next
Pick one shirt today. Write down its six costs, run the three-step formula, and compare the result with what you charge now. If the gap surprises you, you have just found money you were leaving behind.
If you would rather not build the spreadsheet from scratch, the Starter Playbook includes a pricing worksheet that does the sums for shirts, mugs and tote bags, with space for your own postage and fees. Get the pricing worksheet inside the Starter Playbook for $19.