Business Profit

Business Profit Tab

The T-Quoter allows you two options on how to price your goods so that you make money. They are the General Markup and the Targeted Markup. We will look at the General Markup first.

GENERAL MARKUP

The General Markup profit method is the more basic of the two options. It allows you to select the Markup Percentage (as seen in Figure 1) that you would like to markup all of your expenses. This means that your labor, the garments, overhead, equipment expenses, etc. are all marked up a set amount.

Do not confuse the Markup Percent with Profit Margin. These are 2 totally different items. The Markup Percent is what you want to markup your order expenses, which is then added to the expenses. This gives you the total customer cost for the order. The Profit Margin is by what percentage you are making money over the total order as a whole.

**Fig. 1** The Business Profit tab allows you to select how you want the T-Quoter to charge so that your business makes a profit. There are 2 options available. The General Markup and the Targeted Markup. Above we see the General Markup.

For example, a 25% markup will multiply your costs by 25%. Note that if you want to make a 25% profit margin you will need to set the General Markup in the T-Quoter to a value of 33.33%. This is because the program takes all of its costs and will then add 25% of the expenses to the expenses which results in the total end customer order cost. This is not the same as the "profit margin" explained above which actually is a percentage of the order total that is profit. Hence, a 25% profit margin on an order that is $100 is $25 (25% of the $100). However a 25% markup on the order expenses is only a 20% profit margin ($80 expenses x 25% markup = $20. This results in $100 end customer cost. So, you made $20 on the order which is only a 20% profit margin.). Here is a quick reference chart to help you determine the markup rate needed to achieve a certain profit margin on your orders.

Markup and Profit Margin Chart

You need to Markup Your Order by this Amount	To Achieve a Profit Margin of this Amount
11%	10%
17.6%	15%
25%	20%
33.3%	25%
50%	33.3%
66.6%	40%
100%	50%

TARGETED MARKUP

The Target Markup method of making a profit allows you much more flexibility in how the T-Quoter markups up individual garments. As you can see in Fig. 2 above you have several data areas you must fill in for the T-Quoter to correctly quote out jobs for your shop. These are as follows:

**Fig.2** The Business Profit tab allows you to select how you want the T-Quoter to charge so that your business makes a profit. There are 2 options available. The General Markup and the Targeted Markup. Above we see the General Markup.

Target Profit Per Year - This is the target amount that you would like to see the business net after paying all of your overhead, labor, garment purchases, etc. for the year. Be realistic when setting this amount. If you are only printing on weekends and you put $100,000 in for your Target Profit you will price yourself out of the local market. The higher the Target Profit amount the higher the prices of your printed garments will become.
Product Markup Ranges and Percentages - This is a much more detailed section to fill out, but allows you greater control over your markups for each individual garment. It works like this:
- There are 8 different "Ranges" that you can customize. Each range has From and To dollar amounts that are user adjustable. i.e. in the example in Fig. 2 Range 1 has a price range of $.01 - $1.99. Range 2 has a price range of $2.00-$4.99.
- Markup Percent - The Markup Percent is how much you want to markup any garment that falls into that From/To price range. i.e. in the example in Fig. 2 any item that falls into the $.01-$1.99 price range will be marked up 100%. This means that if a shirt costs you $1.50 then that garment will be marked up 100% and added to your bottom line profitability. i.e. in our example the profit margin is 100% for this price range - which means you make $1.50 on every shirt that you sell. For Range 2 our price range is $2.00-$4.99 and the percentage of markup is 75%. So, if a garment costs $3.00 our cost, then the T-Quoter will mark the garment up $2.25 (making the garment cost to the custom $5.25 before printing costs.

Typically you will markup lower priced goods more than you will higher priced goods. An inexpensive $1.50 white T-shirt can be marked up quite a bit more than can a $ 12.00 hooded sweatshirt. Also, traditionally as the price of the garment goes up, the lower the markup becomes. You can't markup a $50.00 jacket 100% and still expect to sell a lot of them. (If you can, then go at it!) So, generally the higher the price of the garment the lower its markup percentage will end up being.

Note: There is no one specific answer for what you should markup your items or what price ranges you should set for each markup percentage. You will need to decide on what price ranges you want each markup to be associated with an what that markup percentage will be for that price range.

In Conclusion

As you can see, the Targeted Markup allows you much greater control and flexibility over the General Markup. Choose one that best suits your business model and stick with it. You can switch at any time between the two Business Profit models without any ill effects to your T-Quoter. After switching, the next quote you produce will use the active profit model that was chosen. So , you can flip-flop between the two if you like. However, it is suggested that you choose one model and stick with it because you will be better able to see how your percentages and profit margins are working in relation to your profit model.