Pricing Sublimation for Profit

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 second method is market value method. This method takes more time and research, but in my opinion is the better way to determine your selling price. Start with a percentage value that is needed to cover your bills and take that percentage and add it to your cost to produce. So let’s say you needed 25% to cover your bills, you would take the $7 cost, times 1.25 and come up with a figure of $8.75 each. Then you would go out and do some research and determine what the market will buy a similar product for. Let’s take the mouse pad example again, the average price you discover people are willing to pay for this product that is sublimated and delivered to their door is $15.00. You set your price at that level and continue to track the trends. Are they selling faster than you can make them? Well, maybe move the price up a bit! Are they sitting on a shelf getting dusty? Maybe, it is time for a sale when you sell them for $10 each for a limited time. This method is much more flexible and allows you to maximize your profits.

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!

Adding Extra Value to Your Offering

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.

    THANK YOU in advance for your editorial support.

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