Upsell breakdown

Pricing Strategies for SFX Graphics

Josh Ellsworth

Josh is the VP of sales, dealer channel for Stahls'. He deals in the sales and implementation of heat-applied, apparel-decorating systems with a focus on customization. He holds skills in the production, sale, and marketing of customized apparel. He presents seminars at trade shows and contributes articles to trade publications, like Printwear magazine.

Business owners are always looking for ways to make the sale or, in some cases, make more money on the sale. One of the most effective ways to make more money on a sale is to upsell the customer to a more profitable product.

With apparel decorating one of my favorite ways to upsell into more profit is to take a customer’s design and elevate it. Special-effects print techniques can take a $15 customized garment for a group and turn it into a $20-plus garment with little additional cost. Many an article has covered the different ways to produce special effects, but now it’s time to sell them. Let’s explore a strategy to make this additional revenue a reality.

Three-tiered approach

In order to make more money, one strategy is to try to sell some additional items such as shorts, hats, etc. While a decent strategy, it’s more likely to sell an upgrade to the garment that they’ve already committed to purchase; their primary interest. Make more money on the sale already in-hand by upgrading the print. To do so, it’s best to be prepared with a strategy in place that applies to everyone who quotes orders and sells to customers. 

For example, with this decorating discipline, order a range of special effect heat transfer films and group them by cost and perceived value. For this exercise and to keep things simple for selling we’ll group into three tiers.

Tier One: Basic—the garment with a basic color as priced above.

Tier Two: SFX Upgrade—group materials that are similar in cost together that offer a more attractive result than a basic design. For this exercise, we’ll use a smooth glitter and a fashionable electric/metallic media.

Tier Three: SFX Ultimate Upgrade—incorporate effects at a higher perceived value, most of which are more costly to produce from a cost of materials and labor standpoint. For this exercise, we’ll use a true glitter flake material and a glow-in-the-dark.

Now that we’ve established some easy sales specs and guidelines, let’s look at profit scenarios across our examples each category.

Tier One: Basic

Consider a basic design suited for a cross country team’s order for a group of 12 team members. This scenario/quantity is most profitably produced with a vinyl cutter, heat press and heat transfer film. The finished result is soft on the garment, durable and should satisfy the team. Will it satisfy profits? Let’s break down the cost to produce the job.

The design is 10" X 14", requiring approximately four yards of material for the 12 shirts. At $6.20 per yard, the total cost of material to produce the job is $24.80. If we estimate the shirts at $2.50 each (or $30 total), the total cost of materials rings in at $54.80. This type of job takes approximately one hour to complete (five minutes per shirt), so we’ll estimate the labor at $10.50. 

Our final calculation looks like this: 

$10.50 (labor) + $54.80 (cost of materials) = $65.30 total cost

We’ll price the basic design at $15 per shirt to this group of 12.

$15 x 12 shirts = $180 revenue - $65.30 in cost = $114.70 profit on the total job.

Tier Two: SFX Upgrades 

Examples of “tier two” graphics, price the pictured electric fashion film (top) and smooth glitter media at a 25 percent higher rate than the basic graphic. (All images courtesy the author)

Fashion Film Electric

The 10" X 14" design will still require approximately four yards of material for the 12 shirts, but the upgraded media, at $9.31 per yard, brings the material cost up to $37.24. We’ll use the same $2.50-per-unit shirts ($30 total) and have a total cost of materials of $67.24. The labor is the same; one hour at about $10.50. For the tier two upgrade, the pricing scenario looks as such: 

$10.50 (labor) + $67.24 (materials) = $77.74 total cost

We’ll price the tier two upgraded design for 25 percent more than the basic design, at $18.75 per shirt.

$18.75 x 12 shirts = $225 revenue - $77.74 in cost = $147.26 profit on the total job; $32.56 more profit than the basic order.

Smooth Glitter

I mentioned grouping similarly-priced effects in the same tier for simplicity’s sake. To see how it prices out with media that is similar to but not exactly comparable in price, take a look at how a smooth glitter would look in terms of profit. The 10" X 14" design requiring four yards of material costs $41.40 since the price per yard goes up about $1 per yard at $10.35 per yard. With all of the other variables static from the other scenario, the total cost of material and labor is $81.90. Since it’s a tier two upgrade, we’ll still only charge 25 percent more than the basic design or $18.75 per shirt to a group of 12.

$18.75 x 12 shirts = $225 revenue - $81.90 in cost = $143.10 profit on the total job; we’re still making $28.40 more profit than the basic order.

Although this means we’re making $4.16 less than the other tier two option, the pricing scale makes it easier to communicate to customers.

Tier Three: SFX Ultimate Upgrades 

Glitter flake media is a slightly more specialty design than smooth glitter. It also takes longer to weed than other materials. Even with increased labor, when priced and sold appropriately, this special effect can fetch more than $60 more profit than a basic design.

Glitter Flake 

We’ll apply the consistent variables to the following scenario: 4 yards of material; shirts at $2.50 each ($30 total). However, glitter flake media requires additional labor as it takes longer to weed. We’ll estimate the job to take 1.5 hours to complete; $10.50 per hour x 1.5 hours = $15.75. The media also costs more; at $11.40 per yard, the total cost of material to produce the job is $45.60.

$15.75 (labor) + $75.60 (total materials) = $91.35 total cost

We’ll price the tier three design for 50 percent more than the basic design, at $22.50 per shirt ($15 + 50%). 

$22.50 x 12 shirts = $270 revenue - $91.35 in cost = $178.65 profit on the total job;

$63.95 more profit than the basic order (and more than $30 above tier two options).

Glow-in-the-dark media has a high-perceived value. Sales staff can pitch this as a bargain at $22.50 and realize more than $70 additional profit.

Glow in the Dark

Applying the consistent variables to this last example, we’ll adjust for the increased media cost at $9.28 per yard or $37.12 total.

$10.50 (labor) + $67.12 (total materials) = $77.12 total cost. 

We’ll price the tier three design for 50 percent more than the basic design, at $22.50 per shirt ($15 + 50%).

$22.50 x 12 shirts = $270 revenue – 77.12 total cost = $192.88 profit; $78.18 more profit than the basic order (more than $40 above tier two options).

Meaning in the math

In all instances, we’re dropping between $28 and $78 more to the bottom line per job simply by upgrading the graphic. If we sell equal amounts of each special effect styles, we’ll average $40.62 more in profit per job—that’s $4,062 over the course of 100 successful upsells. Further, the customer is getting an experience through simple options to choose something that may help their garments stand out.

In order to execute this strategy it’s very important to equip sales staff with the right tools. As a final review, lets’ look at what sales professionals need to make this successful:

Each sales rep should have one set of shirts labeled with the SFX upgrade level and additional charge over a basic design. 

Equip them with color swatches of in-stock and special order options. Press some small color squares on the back of each corresponding shirt to represent the colors that are available in inventory for quick turn jobs. If desired you can also apply colors that are available by special order.

Provide a quick pricing review and ensure complete understanding. Spend some time educating your team on upgrade price levels and consider making a quick reference sales sheet that details how to calculate up-charges for each level.

Good luck on the quest to additional bottom line profits with special effect print techniques. A sound strategy, good samples and educated sales staff will prove to be critical in making this endeavor work for any shop.