Today, you can buy a sweatshirt with the Firedove logo for $39.99.
We wanted to discuss the true costs of the way we are selling this sweatshirt. Since we are a small technology firm, we really don’t have time to be screen-printing sweatshirts, managing inventory, shipping out product, and all the other expenses and time commitments that come with selling a physical product. So we decided that we would use a company that does DTG (direct to garment) printing, packaging, and shipping for us. These are one-off production runs, so we didn’t need to buy any inventory and all of the management is taken care of.
The most beautiful sweatshirt ever made.
As you can imagine, having a company do the printing, processing, and shipping is expensive. The total cost comes out to $37.12 ($30 for the garment and printing, and $7.12 for shipping).
A $2.87 profit per shirt isn’t bad for being able to indefinitely ship out sweatshirts that we don’t have to manage. But alas, there are more costs hidden here.
We need a payment portal. Simply having a form online to have people enter in their credit card information isn’t PCI complaint, and even if we did that (which would be borderline insane) we would still need to process the transactions using a credit card reader. So instead of trying to reinvent the wheel in terms of taking credit cared payments over the internet, we decided to use a payment portal. The portal we selected takes a 5% cut and $0.25 from every order. The math works out to this:
Payment Portal Cut
($39.99*.05)+$0.25 = $2.2495
$2.87 – $2.25 = $0.62
We are currently selling our sweatshirt (and future products) effectively at cost. Since there isn’t any management required to sell, print, and ship, it really doesn’t bother us.
So what’s the upshot for Firedove Technology?
a.) We wanted sweatshirts for ourselves. This was a great way to get them and make them available for others at the same time.
b.) We’d consider this a brand development effort to help get our name and logo out into the public.
Selling goods online requires a really thoughtful approach to do it successfully. We can help outline the true costs for your company and implement a system that works best for your goals.