How to price your merch

The formula

Every merch price comes down to one line:

Retail price = cost per sold item + the profit you want from that order

Two words get mixed up here, and they change the math:

• Margin is profit divided by the retail price. It tells you how much of each sale you keep.
• Markup is profit divided by the cost. It tells you how far above cost you priced.

Take the example on the Merch5 home page: a tee costs about $12 to print and ship and sells for $34, leaving $22. That is a 65% margin and a 183% markup. Same shirt, same money, two very different-looking numbers. When you compare advice from different sources, check which one they mean.

Step 1: Find your real cost per sold item

The cost that matters is what one sold item costs you, all in. What goes into it depends on how you make the merch.

Print on demand

Each item is made after someone pays, so the cost is per order and you never pay for unsold stock. Add up:

• Production and shipping for that product. On Merch5 this is shown next to each product while you set the price, so you see your margin before you publish.
• Payment processing, if your platform does not already include it. Fourthwall's pricing guide lists card fees of 2.9% + $0.30, about $1.03 on a $25 product.
• The platform's cut, if it takes one. Merch5 takes 0% of your margin; check the terms on any platform you compare.

Bulk order

With a bulk run, divide what you paid by the items you expect to sell, not the items you ordered. Say you buy 100 shirts at an assumed $8 each, $800 in total. If you sell all 100, each one cost $8. If you sell 60, each sold shirt cost you $13.33, before mailers, postage and your time. Leftovers are part of the price. Our guide to what a merch line costs breaks down every line of a bulk budget.

Step 2: Choose a profit target in dollars

Published margin targets vary a lot, because each source counts costs differently:

• Printful's guide to print-on-demand margins puts most sellers at 20% to 40%.
• Fourthwall's pricing guide recommends keeping at least a 20% margin and at least $10 profit per item.
• Spreadshop's t-shirt pricing guide says sellers typically make $5 to $15 per t-shirt.

For a first store, think in dollars rather than percentages. A small audience means a few dozen orders, not thousands, so each one has to be worth the posts, the replies and the design time. Decide what one order should earn you, then check the percentage.

Here is what different prices leave on a tee that costs $12 to print and ship, the figure from the Merch5 home page. Check the real cost of your product in the dashboard before you use it.

Illustration based on a $12 production and shipping cost. Payment fees, if your platform charges them separately, come off the profit.

Step 3: Check what your market pays

The formula gives you a floor. The market tells you where the ceiling is. Spreadshop calls $25 to $30 standard t-shirt pricing, with premium tees selling for $30 to $40 and up. Then look closer to home:

• Open the stores of three to five creators, bands or businesses your audience also follows, and write down what they charge for a tee and a hoodie.
• Note what is included: free shipping, a sticker, a limited run.
• Place yourself in that range rather than below it.

Pricing under everyone else rarely sells more merch. People buy it for the connection to you, not for the blank, and a price that looks cheap can make the design look cheap too. Compete on the design and the story behind it.

Step 4: Build a price ladder, not a single price

Most first stores carry two or three products. Give each one a clear job:

• The entry item, such as a mug or a tote. No sizes to pick, the lowest price, an easy gift.
• The core item, almost always the t-shirt. This is the price people judge your store by.
• The premium item, usually a hoodie or a sweatshirt. It costs more to make, so it needs its own math. Do not just double the tee price.

Run the formula separately for each product, then look at the list as a whole. The gaps between prices should feel obvious, with the hoodie clearly the "big" purchase. Our guide to the best products for a first drop covers which items to start with. To see how a finished price list looks, open a demo store such as Corner Cup Coffee or the indie game demo.

Step 5: Pick a price style and keep it

Should a shirt be $25 or $24.99? The sources split. Spreadshop recommends charm pricing just below a round number. Fourthwall recommends clean round prices and points out that $25 earns $2.50 more per sale than $22.50 at similar demand. Both work. What looks careless is a mix, so choose one style for the whole store.

Step 6: Leave room for discounts before you need them

A discount comes straight out of your profit, not out of the cost. Here is what happens to the $34 tee with a $12 cost:

A 20% discount costs you about a third of your profit on this shirt; half off leaves almost nothing. Fourthwall suggests 10% to 20% for standard promotions and keeping deeper cuts for clearance. If you price at cost plus a dollar, you can never run a sale, give a member discount or send a free shirt to the person who designed it.

Step 7: Decide how shipping looks to the buyer

Buyers judge the total at checkout, not the price on the product page. Fourthwall's example: a $25 product with $8 shipping shows the customer $33. Whether you fold shipping into the price or show it separately, look at your store as a buyer would, through to the last step, and make sure the total still feels fair for what they get.

Step 8: Handle extended sizes openly

Larger sizes often cost more to make. Fourthwall's rule of thumb: if sizes differ by $1 to $2, keep one price; if the gap is $3 to $4 or more, add a $2 to $5 upcharge for 2XL and up, and say so in the product description. Never hide it. A surprise at checkout loses the sale and the goodwill.

How pricing changes by seller

The formula is the same for everyone. The profit you aim for is not.

Worked examples: podcasts, bands, coffee shops, sports teams and employee swag.

When to change a price

Set prices once, then leave them alone long enough to learn something. Good reasons to change them:

• Your costs changed. Recheck the margin whenever the production cost of a product moves.
• A design is limited or in high demand. A limited design can carry a higher price; Fourthwall suggests 10% to 20% above standard items for limited editions.
• One product never sells. Before you cut its price, ask whether the product or the design is the problem. A tote nobody wants does not sell at any price.

Change one price at a time and give it a few weeks, so you know what made the difference.

Pricing mistakes that cost first stores

• Pricing from the blank, not the brand. A $12 cost does not make a $15 shirt. Your audience is paying for your design and your name.
• Forgetting the leftovers. In a bulk run, unsold sizes raise the real cost of every sold item.
• No room for a sale. Without margin you cannot discount, bundle or give one away.
• A different price style on every product. $24.99 next to $30 next to $27.50 looks unplanned.
• Hidden upcharges. Extended-size and shipping costs belong on the product page, not as a surprise at checkout.

Pricing is only half the money question; the other half is what you spend before the first sale. On Merch5, opening and running the store costs $0 and printing and shipping are charged out of each paid order. See plans and pricing for the one thing paid plans add: branded packaging.