Drop shipping is currently one of the most profitable business models for merchants simply because its core concepts take the responsibility of shipping and manufacturing out of your hands. It is a low-risk business model as compared to wholesaling, and with the right partners, such as suppliers, you might just get good margins off of the products that you sell.
But, of course, the success of your business relies heavily on the popularity of the niche you choose. So, our topic question for this article is can you make money drop shipping t-shirts?
If you’re looking to sell t-shirts online then we’ve prepared a detailed breakdown of the ins and outs of this line of business including everything that you should expect to encounter along the way. Read on if you’re interested!
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E-Commerce Clothing Sales
Let’s lay down all the details first and then you decide should you get excited about a t-shirt drop shipping business or not. First of all, we already know that there’s an endless demand for t-shirts all over the world.
But, with such a high demand for t-shirts also means a lot of competition. We must admit, the t-shirt business can be brutal and you must do a lot of work on your product to get it to stand out. Just how big is the t-shirt business and what does the future look like?
It turns out that the e-commerce sales of clothing amounted to $504.6 billion in 2018. It’s on track to grow to more than $700 billion by 2023 and the apparel, as well as the accessories, category is responsible for about $130 billion of that.
Just imagine the possibilities for a t-shirt drop shipping business if you do all the right things starting today. The t-shirt printing industry in itself is expected to reach $10 billion by 2025.
Many people are looking at starting a t-shirt drop shipping business because A) you won’t need a lot of capital, B) all you need is your creativity, C) they are relatively simple to produce and customize, and D) as mentioned, the demand will be endless.
T-shirts are comfortable and fun. That's why people love wearing them.
Costs To Consider When Drop Shipping
You have every reason to be excited about the potential of the t-shirt industry but let’s talk about the cost of doing business. As a drop shipper, you might not worry about manufacturing and shipping, but you’re going to have to put your business in the digital space. You know how it gets online, it can get really competitive. You’re going to have to fight for your share.
You’re going to have to consider:
- Web development/web hosting costs
- Your E-commerce platform
- Capital for your marketing expenditures
- Designing your t-shirt so it will stand out from the crowd
If you’re a graphic designer yourself then you can save a ton of money in the execution of your t-shirt designs. But, if you’re not, then you’re going to have to find the right partner to realize them. That is easier said than done.
Graphic designers are not cheap but are worthy investments. You’re going to have to do a lot of trial and error. Finding the right designs from the get-go is a luxury, and maybe just a bit lucky. With that being said, there are affordable graphic design companies that can provide quality work at a good price.
Aside from the costs that you’re going to have to prepare for, knowing what kind of t-shirts you want to put out there in the market is also a huge part of the process. Once your designs are ready then you’re halfway there.
Your website is going to be invaluable to your e-commerce business because that’s where you’re going to interact with your clients and hopefully convert them. An e-commerce website with about 100 to 1000 products can cost you from $5,000 to $50,000 to develop. That’s for small to medium-sized businesses, which will most likely be your category for a startup in the t-shirt drop shipping category.
That expense includes website development, design, and a few other upfront costs. Furthermore, maintaining an e-commerce website could cost you thousands a year.
You can also go for a cheaper option like opening a drop shipping store on an e-commerce platform like Shopify. You can try it out for a 14-day trial run to start off with.
Developing a basic Shopify website should cost you about $500 to $2,000 but don’t set your expectations too high on the quality. Shopify’s pricing ranges from $29 to $299 a month for your e-commerce store.
Other e-commerce stores you may try are WooCommerce, BigCommerce, and Magento.
Lastly, what are the marketing expenditures that you need to prepare for? Let’s just say that you need to at least allocate 5% for your revenue in order to keep your position in the market and about 10% to 12% for growing your drop shipping business if you’re really looking to scale.
Crunching the numbers can be a bit challenging but it’s all part of the business and we should know them to heart to succeed.
Is Drop Shipping T-Shirts Profitable?
So, with all that said and done, how much margin or profits should you expect out of your drop shipping business?
First of all, a good profit margin is considered to be around 20% or more. Take note that a lot of factors affect your margins. If you choose to sell high-end shirts then your profits should be higher but that doesn’t mean that you’ll earn a lot. If you choose to sell low-end t-shirts then you’ll most likely have lower margins too, but there’s a chance that you’ll sell a lot more.
The formula to calculate your margins is ((Price – Cost) / Price) x 100. You should also learn how to observe your competitors and learn from the ones who are doing well. There are t-shirt drop shipping businesses that enjoy fantastic profit margins!
Some of the most successful t-shirt drop shipping companies today are Printful, Printify, Print Aura, Teespring, Gotten, Custom Cat, and Lulu xPress. If you study them closely you’ll notice that they all have a quick and excellent shipping process, give their customers a chance to customize, have a wide array of options, and have user-friendly websites.
In general, a drop shipping business may grow in about six to twelve months. That’s if all goes well. It’s all up to you. You may temper your expectations and start small but build up your business slowly or if you have the funds to spend as capital then you can be as aggressive as you want.
Some drop shippers go full-time on their successful businesses after about a year.
It’s always important to have some capital, even if you just want to start slow with your t-shirt drop shipping business. With a solid idea, hard work, and a knack for learning the tricks of the trade of e-commerce, anyone can be successful.
The drop shipping industry is not even at its prime and it will continue to grow. So, now is our time to grow with it. Be sure to invest in quality designs because ultimately — creative t-shirts are what sell. You'll need to be tenacious when it comes to marketing and timing is everything. Good luck!