## Pricing Sublimation for Profit

Share on Social Media
• 1
Share

So now that we have a pretty good representation of our cost to produce the items from the previous blog post, we need to figure out the price of the product to reach our goals. In this pricing, 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 and/or taxes etc. To get to that final figure there are several variations of pricing techniques that you could spend hours researching and trying to wrap your head around. Instead, let’s explore two common methods, noting my personal recommendation.

The first is a cost plus markup method. This method is typically used by someone with an accounting or numbers based background. In the purest form, you plug your cost to produce from above and then add a markup percentage to that which will satisfy your overhead and profit needs. So, for the mouse pad example, let’s say our markup percentage was 60%. You take the \$7 and divide by .40 and come up with a sales price of \$17.50 as your sell price. Now plug that into your spreadsheet and you have the selling price for all of your products. EASY!

The problem with the first method is that many times you are not going to be making as much as you could on some items and you will be priced right out of the market on others, like the mouse pad example. But on the flip side, maybe you are selling phone cases that cost you \$4.00 to produce. With the cost plus method you would be selling those at \$10.00 each, but if you did some market research you would find that people are willing to pay \$20.00 each for a phone case, so you are leaving a ten dollar bill on the table every time you sell one!

This is the part that truly sets sublimation apart from other analog decorating methods. How can you add extra value to your product to increase your profit? See value is a perceived number and honestly, as humans, we have no idea what it costs people to make most things we buy. Does the Cadillac really cost that much more to make than the Ford? Not really, but yet people are willing to pay more for the Cadillac in most cases because of its perceived value. So, this is where you have to think about pricing sublimation differently that for example screen printing or pad printing. You should not have a price list that gives the customer price breaks depending on the quantity purchased. With sublimation, you can gain some efficiency with quantity, but because there is no front end setup, those efficiencies are only in buying of the base product and pressing more at one time.

In sublimation, it’s necessary to come up with creative ways to add value.  The first value-added tool you should use is personalization. This should be something you sell to your customers. Instead of having 1,000 mouse pads with a single color logo, the customer can spend a little more for full-color mouse pads, bought in smaller quantities that are personalized to fit all of their needs. Maybe, each of their top customers gets their own mouse pad with their name on it. Or it might be an award plaque that has the image of the person winning the award on it as opposed to just some boring gold letters.

The second way to add perceived value is to describe your product differently, so the customer sees it as being of more valuable. For example, if you are selling garments, you would not be selling a T-Shirt, you would be selling moisture-wicking active wear garment that is decorated to last the life of the garment. Signage is another good example. You are not selling a simple sign; rather it is a full-color marketing tool that allows the company to show off their brand while still directing someone to the restroom.

Armed with the above information, it is my hope that everyone can become a profitable sublimation decorator. It just takes a little different way of thinking, a little market research and being creative in your marketing strategy.

• Dear Aaron,

we want to publish your aticle ‘Decoding 3D Sublimation’ in SUBLIMATION IDEAS magazine and look forward for your permission.