How to price decorated merch without eroding your margin

Most margin isn't lost on the big decisions. It's lost on costs left out of the quote: freight, a digitising fee, bagging, the courier to the client. Each one is small, and together they can take a job from healthy to break-even.

Here's a way to build a price that holds up.

1. Start from landed cost, not garment cost

Landed cost is everything it costs you to get the finished product into the client's hands. For a decorated garment that usually includes:

• The blank: the supplier's price for the style, colour and size.
• Freight in: getting blanks to you or to your decorator.
• Currency: if you buy in another currency, the exchange rate you'll actually pay, plus a buffer.
• Decoration: the decorator's per-unit price for the method, positions and colours or stitch count.
• One-off setup: screens, digitising or artwork preparation.
• Finishing: folding, bagging, labelling or kitting.
• Delivery out: the freight to the client, or to each of their locations.

2. Spread fixed costs over the real quantity

Setup and delivery are fixed per job, not per unit. That's why small runs cost more per piece, and why your price breaks need to reflect it.

Here's an illustrative example for 100 embroidered hoodies:

• Blank: $22.00
• Freight in: $1.10
• Embroidery: $6.50
• Digitising ($60 ÷ 100): $0.60
• Bagging: $0.40
• Delivery out ($45 ÷ 100): $0.45

Landed cost: $31.05 per hoodie.

At 50 units, the same fixed costs are spread over half the quantity. Digitising becomes $1.20 and delivery $0.90, so landed cost rises to $32.10. The same unit price at 50 units earns you less.

3. Know whether you mean markup or margin

This is the most common pricing mistake. A 35% markup on $31.05 gives a price of $41.92, but that's only a 26% margin. To make a 35% margin, divide cost by 0.65: $31.05 ÷ 0.65 = $47.77.

Decide which number your business runs on, and make sure everyone who quotes uses the same one.

4. Price the extras on purpose

Every extra position, extra colour, name or number adds cost. Price each one as a line, not as a favour. The same goes for rush jobs, split deliveries and small-run surcharges. Clients generally accept a clearly itemised extra more readily than an unexplained total.

5. Check margin before you send

Before any quote goes out, check the margin at every price break. If a break falls below your floor, change the break rather than hoping the client picks a bigger quantity.

In BrandKit, quotes are built from supplier catalogue costs, landed-cost rules and each decorator's rate card, and the margin is shown on every line before the quote is sent.