Starting your own print-on-demand business is a fun, enjoyable endeavor that lets you express all your creativity while building a lucrative, yet low-risk venture. However, conceptualizing the vision for your brand and designs is just half the battle. Things can get tricky once money enters the discussion.
While the model is among today’s most cost-efficient methods in the e-commerce world, it can be challenging to price your POD products without scaring off your target customers and still get your desired profits. Plus, you’ll possibly be competing with dozens of other brands in your niche, so standing out is a must. This all-inclusive guide will go over the steps you’ll have to take when pricing your POD products to ensure your price tags would ideally sell your items and your brand.
Let’s get started!
A Quick Dive Into POD
In case you’re not quite familiar with POD, aka print on demand, it’s one of the most innovative business models widely used in the e-commerce landscape nowadays. Gone are the days when starting a clothing or merch business meant buying dozens of sewing and printing equipment, renting a warehouse, and hiring people for every function. With print on demand, you can run your own business; whether it be apparel, accessories, or home decor, without shelling out thousands of dollars that you’re not sure you’ll ever get back.
Brands powered by the POD model work with print-on-demand service providers like Awkward Styles, who handle the sourcing, printing, and shipping of the products. Simply put, they do all the heavy lifting, allowing business owners to focus on growing their brands. Once your online store is connected to your print-on-demand partner’s website, they will fulfill all the orders that would come in and make sure your dear shoppers receive them. Without worrying about inventory and high upfront costs, POD lets you turn your dream business into a reality with the help of some creativity and the right strategies.
Why Product Pricing Matters
Speaking of the right strategies, pricing is one of the most important aspects you’ll have to focus on as you craft the blueprint for your POD brand. First, it is the most prominent representation of your brand positioning. Are you catering to a high-end market? Or do you wish to offer more budget-friendly solutions to low to middle-income class consumers?
Whichever market segment you’d want to focus on, you have to make sure that your price tags aren’t too high enough to scare them away, and are not too low for them to think your products won’t last a day. It’s finding the balance between ensuring your prices are enticing enough and that they reflect the hard work poured into the creation of your items.
Furthermore, your pricing strategy would determine your profit margins. Some business owners price their products low to make as many sales as possible, while some price their items high, ensuring high-profit margins for every product sold. This would depend on many other factors, which we’ll discuss later.
Finally, your pricing is one of your target shoppers’ first indicators of how you compare to your competitors. In the e-commerce world where there are endless options available to consumers, the price will always be among their considerations when comparing your products to that of brands x, y, and z’s.
Factors to Consider When Pricing Your Products
Now, without further ado, let’s go over the factors you’ll have to consider when pricing your print-on-demand products.
The Cost of Production
Of course, one of the first things you have to take note of when pricing your items is the overall cost of production. Determining the production cost in print on demand is much easier because the unit prices are readily available in most POD providers’ product catalogs–just like this necklace, for example. Your print-on-demand partner may charge additional costs for custom printing and packaging, but these extra charges are often calculated in a standardized manner.
The production cost, however, is just your starting point. You’ll have to add a few cents or dollars to the unit price depending on the other factors we’ll discuss below.
Your Shipping Costs
High shipping costs are a deal breaker for many online shoppers. This is why most POD business owners factor in the shipping costs before deciding on the final price of their products. Consumers want to know how much they’ll be paying in total–not just your items–before hitting the checkout button. In fact, about 44% of online shoppers abandoned their carts for this very reason.
Moreover, knowing your shipping costs lets you strategize your promos or purchase incentives. For instance, you can offer free shipping discounts for bulk orders when you know you can still profit despite the discounted shipping fee.
Website/E-Commerce Marketplace Costs and Fees
The bulk of your operations will take place online so you need to make sure that you have an excellent website or e-commerce store and a foolproof ordering system. And, of course, these would cost you a few bucks.
E-commerce platforms like Shopify and WooCommerce have different plans and extensions that determine the overall functionality of your store’s website. You can check out this guide to compare the setting up costs for these platforms. Meanwhile, online marketplaces like Etsy collect listing and transaction fees for every sale you make on their site. (This blog has everything you need to know about Etsy’s updated pricing structure.)
When adding your website fees to your pricing equation, you can start by determining your target number of units sold or overall sales for the month. Make sure that when you subtract the costs and fees from your revenues, you’ll still get your desired profit margin.
Your CRM Tools, Extensions, and Subscriptions
Another set of fees you’ll have to consider is your customer relationship management (CRM) tools and other subscriptions. CRM software like Hubspot allow e-commerce business owners to streamline their online operations while growing their stores and accomplishing their KPIs. However, some of them do come with a hefty price tag so you really have to make sure you can maximize their features for your store.
If you’re on e-commerce platforms like WooCommerce and Shopify, chances are you’ll also be subscribing to some additional extensions to improve the functionalities of your website–whether it be for analytics, easy checkout process, or lead capture. Again, these are expenses you must consider when coming up with your final product prices so you won’t end up paying more than you earn.
The Market Demand and Competition
A quick economics 101 refresher: prices fall when the supply of a good exceeds the demand. When the demand for the product or good surpasses the supply, the prices go up. This law of supply and demand still applies to goods and services in the e-commerce world.
When you research your pricing strategy, make sure you get a good grasp of the current market demand for your products. If the market is saturated with items and designs similar to your brand’s style, it may be a good idea to price your products strategically so you’ll have a fighting chance. You should also study how your direct and secondary competitors price their products. From there, there are two ways you can go about your brand positioning and pricing strategy.
One is by presenting your products as the more affordable or budget-friendly option. This would entice shoppers who are looking for the same items offered by your competitors for lower prices but still want to get the best value for their money.
Another is by positioning your products as the superior, higher quality option. This would attract customers who wouldn’t mind spending a few bucks more for the same item but with better quality and brand reputation. Of course, you can’t simply pick a strategy between these two and put up your price tags. You’ll have to determine the perceived value you want for your product and make sure they’re shown in your branding and marketing strategy. We’ll tackle these two factors further below.
Your Brand’s Image and Perceived Value
Coming up with a pricing strategy isn’t just about the figures and tangibles. Your brand’s image and your product’s perceived value will play a significant role in convincing your target consumers that your price tags make sense. Just think about how a $170 bag can be sold for $1700 when labeled luxury–that’s the power of branding, which names like Louis Vuitton have proven.
Establishing your brand’s image should be one of your priorities the moment you set up your online store, decide on your brand’s name, and craft your logo. This should shine right in your target consumers’ first impression of your business. For instance, if you’re selling streetwear and your target consumers are free-spirited Gen Zs, consisting of high schoolers and college students looking for affordable fits, you can use bold, vibrant colors in your branding accompanied by silly fonts and eye-catching graphics.
Meanwhile, if you’re selling POD jewelry and your target shoppers are career-oriented women looking for classy pieces to complement their everyday look, you can use minimalist colors and fonts along with dainty or delicate design elements in your logo and online storefronts.
Now, defining your products’ perceived value is about finding the perfect balance between your brand’s image and the current prices of the item in the market. For example, shirts aren’t generally considered expensive items. If you’re going for the budget-friendly path, you can price them around $19.99 to $24.99. But if you’re positioning your brand as a higher-end one compared to your competitors, you can price your shirts at around $25 to $50 tops.
The Marketing Costs
Apart from your store’s look, your brand name, and your logo, one thing that would solidify your brand’s image and your product’s perceived value is your marketing strategy. The social media platforms you use, the look and vibe of your product photos and ads, the influencers you work with, and the loyalty programs you have for your shoppers will be your target consumers’ way of telling if your pricing is justified by the overall experience they can get from your brand.
However, just like the CRM software and e-commerce platforms we discussed earlier, all these things come with a price tag–from the specific marketing tools you use to the boosting fees set by different social media platforms. You have to make sure that when you compute your KPIs and financials for your pricing strategy, these costs are accounted for.
Your Desired Profit Margins
Once you’re set with the brand image you wish to establish, and you’ve calculated all the expenses you’ll incur–from the products’ unit costs to your website fees and marketing tools, it’s time to finalize your desired profit margins. The idea is when all these factors are taken into account, how much will you earn and take home given your prices? This part is entirely up to you and your money goals. Make sure that when you add your desired profit margins to the equation, your prices are still as enticing as possible to your target consumers.
Now that we’ve gone over the factors let’s discuss some of the most important ones in detail to do your research and planning much more manageable!
Researching Market Demand and Competition
Market research can be one of the most tedious parts of starting a business. However, it’s also one of the most important.
Identifying Your Target Market
The process starts, of course, by identifying your target market. This isn’t as simple as choosing a specific age group, gender, or location. You’ll have to pinpoint a particular market segment by considering different demographic information (e.g., age, race, gender, income class, occupation, family background, etc.), studying their psychographics, and coming up with consumer personas or customer avatars that can help you better scrutinize their shopping behaviors and motivations.
Understanding the Pricing Strategies of Your Competitors
As mentioned earlier, you’ll need to consider both your direct or primary competitors and the secondary ones. Direct competitors offer the same kinds of products in the same niche or market segment. Indirect or secondary competitors, on the other hand, are those who offer alternatives or substitutes. They don’t necessarily offer the same products, but they satisfy the same pain points of your consumers. Understanding how these businesses price their products and their success in the market would help you position your products strategically.
Assessing Market Demand for Your Products
The demand for a specific product can change from time to time. Thus, this entails keeping tabs on the market and staying updated on external factors that can affect the demand for your offerings, such as emerging trends, both in the online and physical world.
Creating a Perceived Value for Your Brand
As we’ve discussed earlier, creating a perceived value for your products is striking the right balance between your brand image and the current market prices. These are some key factors you have to consider when establishing your brand’s perceived value:
The Power of Aesthetics
Just like in the examples earlier, you have to ensure that your visuals–from your color schemes, typography, and images–align with your branding. Whether aiming for that expensive look or the more budget-friendly store vibe, keep your aesthetic consistent across all your marketing efforts and website pages.
Choosing Your Ambassadors Wisely
The image and reputation of your ambassadors should also be aligned with your brand’s perceived value. For instance, if you’re positioning your brand as high-end, you should work with macro influencers known for their luxurious lifestyles or even celebrities that resonate with your target market. Meanwhile, if you want your items to be seen as affordable yet functional and stylish pieces, you can work with micro-influencers on TikTok or IG who their followers trust for their product recommendations.
Selling the Whole Experience
Now, to make sure that your target market understands your desired perceived value for your brand, you have to sell them the whole experience. Your marketing efforts should show how your consumers are supposed to feel the moment they receive your product, open their parcels, and wear your pieces. Aside from getting influencers or brand ambassadors, you can utilize user-generated content (UGC) and many other advertising formats to ensure this translates well into your overall marketing strategy.
Reviews and Adjustments
No, the job isn’t over once you’ve set your prices. Because the e-commerce world is an ever-evolving space, and there will always be external factors directly (and indirectly) affecting your target consumers, you must keep reviewing and adjusting your prices.
Here are some things to consider as you make changes to your pricing strategy:
The Current Trends in the Market
Do you have an item the internet world has slept on but is now selling like hotcakes? Are there viral posts or content that can potentially increase the demand for your products? Trends come and go, but you should never let an opportunity slip by. By keeping tabs on what’s new or hot in the market, you can find a window or momentum where you can set your prices for a particular product higher or offer your items in bulk.
The Economic Landscape
Economic factors like inflation, tax increases, and the like all influence consumers’ purchase decisions. As a business owner, it’s vital that you’re updated with these things to make sure your prices won’t drive away your target market.
Changes in Your Target Market’s Shopping Habits
Conducting surveys on your consumers’ shopping habits from time to time can help you recalibrate your prices. These can be a great source of information for future marketing initiatives and new product offerings. Try to study their current motivations and if there are any changes in their pain points–psychographics change over time, so this should be an ongoing effort.
That’s a Wrap!
Product pricing can be a tricky and intimidating task, but it doesn’t have to be. We hope these tips help you ensure that your price tags radiate the vision you have for your brand while attracting your target consumers. By equipping yourself with the correct information and being mindful of the trends in your niche, you’ll surely come up with prices that effectively sell your extraordinary items. Happy pricing!
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