One of the most common mistakes new t-shirt brands make is setting the price by copying competitors or following gut feeling. The tees sell, yet at the end of the month the money does not add up. The reason is almost always the same: costs were underestimated, and the real margin is much smaller than it looked. A sound price starts from the full cost of a tee delivered to the customer, and only then is it compared with the market.
Step 1: direct production cost
Direct cost is everything that physically goes into the tee and its making:
- fabric: consumption per piece, including cutting waste, multiplied by the price per kg;
- rib for the neckband;
- cutting and sewing, agreed with the garment workshop;
- labels: main, composition, size and swing tag;
- printing or embroidery;
- individual packaging.
Step 2: the costs beginners forget
These are not visible in the tee, but you pay them on every sale:
- shipping to the customer, if you offer it free or subsidise it;
- payment processing fees and, where relevant, marketplace commission;
- returns: return shipping and tees that can no longer be resold;
- customer acquisition cost: ads, collaborations, samples;
- samples, photography, the website, and unsold stock at the end of the season.
Marketing cost per order is often the biggest cost after the product itself. Do not ignore it just because it is not on the workshop's invoice.
A hypothetical worked example
All the figures below are round examples so you can follow the logic. Let's assume a 180 g/m² tee:
- fabric: 0.25 kg × €8/kg = €2.00;
- rib and labels: €0.60;
- cutting and sewing: €2.40;
- DTF chest print: €1.60;
- packaging: €0.40.
Direct cost: €7.00. Now add per-order costs, also hypothetical: subsidised shipping €1.60, payment fees €0.60, a returns reserve of €0.80 and marketing per order of €4.00. Full cost: €7.00 + €7.00 = €14.00 per tee sold.
If you sell the tee at €24 excluding VAT, the profit before the company's fixed costs is €10, a margin of roughly 42%. At €18 excluding VAT, profit falls to €4, and a month with above-average returns can wipe it out. The final consumer price must include VAT if your company is VAT-registered; always check the rate and your regime with your accountant.
Margin and mark-up: do not mix them up
Mark-up is calculated on cost, margin on the selling price. A 100% mark-up on a €10 cost gives a €20 price and a 50% margin. Confusing the two leads to prices that are too low. Work with margin, because it tells you what is left from every euro you take.
Wholesale pricing
If you also sell to shops, they need their own margin. A common retail rule is that the shop must be able to sell at your recommended retail price with a comfortable margin, so wholesale prices usually sit well below retail. Check that your wholesale price still covers your direct cost plus a margin of your own; if it does not, either reduce cost or raise the retail price.
Testing against the market
Only after the calculation do you look at the market. If the resulting price is well above what your customers will accept, you have three levers: lower customer acquisition cost, raise the perceived value of the tee, or change your market segment. Cutting fabric quality is usually the last resort, because it hits reviews and returns directly.
A fabric that justifies the price
Perceived value starts with the fabric. For a coloured tee sold at a brand price point, we would use our 180 g pistachio single jersey in combed cotton with elastane: combed cotton has a fine hand, elastane helps the tee hold its shape, and an on-trend shade such as pistachio sets it apart from basic tees. It is in stock in Afumați with no minimum order, so you can cost a small first batch. For the price per kg to use in your own costing, ask for a quote or check the stock list.
The figures in the examples are hypothetical and only illustrate the calculation. They are not Alteks Tricot prices: we quote the price per kg of each article on request, usually the same working day. Ask for a quote
Frequently asked questions
What margin should a t-shirt brand aim for?
There is no universal figure; it depends on your sales channels, marketing cost and volume. Calculate margin after all per-order costs, not just production cost, and check that what remains covers the company's monthly fixed costs.
How often should I recalculate my price?
Redo the calculation whenever a major cost changes: fabric price, the workshop's rate, shipping or advertising cost. As a routine, a review every season or before every large restock shows you in time whether your margin has been eroded.
Can I sell cheaply at first to win customers?
You can use a clearly time-limited launch discount, but avoid a base price below cost. Customers get used to the initial price, and raising it later is harder to explain than ending a temporary promotion.
