Turning good ideas into money is something that has tempted and teased entrepreneurs for a long time. That’s what makes starting a T-shirt business so appealing. And with the internet’s power to connect good ideas and customers like never before, it’s even more enticing.
So if you’ve been looking for a way to bring your creativity to fruition and are ready to join the world of eCommerce, a T-shirt business might be the way to go.
But let’s focus on something more important when running your new T-shirt empire: how to make money.
Manage your cash flow
It doesn’t matter what business you run, all businesses have a common rule: manage your cash flow. Just because you’re starting a T-shirt business on the internet doesn’t mean you can dodge one of the fundamental laws of business.
Let’s begin with the assumption that you have sourced a T-shirt supplier. For now, we’ll pretend that each T-shirt costs you a wholesale price of $5. This might not be accurate, but you can adjust for facts later.
A standard retail markup is between two and three times the wholesale acquisition cost. That means that you’d need to set a retail price of $10 to $15 per T-shirt, were you running a brick-and-mortar enterprise.
However, your online store has different rules. Many budding entrepreneurs assume that their fixed costs are going to be lower — especially when starting a T-shirt business via drop-shipping. You don’t need to pay for the rent of a storefront, you’re not holding inventory, and you’re not paying the salary of a staff, at least in the beginning.
What does a shirt with a clever slogan or snazzy graphic fetch online these days? Make sure you know the answer to that. Do some research online, even check out Amazon for info. If you see a $16.99 shirt, it’s right on par with where it needs to be if the supplier is selling shirts for $5.
Now, let’s get started.
Decide where you’re going to sell
You have a bunch of options. Amazon accounts for about 50 percent of all online sales. It’s the 800-pound gorilla, and it’s a great place to begin when you’re starting a T-shirt business.
The main problem with selling on Amazon is that selling T-shirts online is extremely competitive. If you’re a competitive person and love a challenge, then you’re in the right business.
In fact, you can use the Merch by Amazon Platform to sell your T-shirt design, but here’s the problem. Remember our double to triple markup for healthy retail? Amazon’s cost to you is around $12, which makes $16.99 a difficult price to match if you want to maintain cash flow (which you do).
If you sell yours for $19.99 instead (Amazon’s recommended price), you ring in about $8 per shirt. That’s doable, if you can scale it — and Amazon is great at scale.
Another option is starting a T-shirt business via your own website. GoDaddy GoCentral Online Store makes it simple to set up your own eCommerce venture. If you go this route, you get to set the price and maintain total creative control.
More importantly — I can’t stress this enough — you own the customer relationship. When you sell on Amazon or any other platform, you’re winning them the customer. You get a slice of the pie, but you aren’t the owner.
If you do a great job, they remember you, not Amazon. And here’s another reason why this matters: customer acquisition is expensive.
When you sell on Amazon, they take a portion of the sale in exchange for bringing you the customer. And you pay that on every single sale. When you own the customer relationship, you pay it once and then have the chance to remarket to your customer later at a much lower price.
Another big benefit of setting up your own store: stability. Amazon and other hosting platforms are notoriously fickle. Mess up once and they can ban you for life.
Let’s go with our own eCommerce store, then.
Use smart marketing strategies when starting a T-shirt business
Now that you have your store set up to your liking and your clever designs are all listed, it’s time to start making sales (and more importantly, money).
Remember how competitive we said the marketplace was when you’re starting a T-shirt business? Well, hopefully you’ve got a healthy budget for digital marketing so you can start driving traffic to your website.
In the digital marketing business, there are two types of marketing: inbound and outbound. Outbound is when you go out and get the customer (telemarketing, advertising, etc.). Inbound is when the customer comes to you. Sounds pretty nice, right?
The easiest way to kick-start your inbound marketing is with a smart blogging strategy. To make sure your inbound marketing strategies, like blogging, are effective, consider investing in software that can analyze your leads and help you determine how you might tweak your strategy to increase the number of customers you attract.
But before you sit down and start blogging, you’re going to need to stop for a second and think about content marketing. That’s the fun content you can create — like videos, infographics, slideshows, articles and so on — to actively sell your product and your business.
You have to create great content when you’re starting a T-shirt business. You’re small. You’re the cocky upstart. That means you’re behind the eight ball, and you need to have a rockstar blog with a solid SEO content marketing strategy behind it. Start with a detailed keyword research strategy and incorporate SEO fundamentals from day one.
These two SEO tools can help you write killer content from the start. And now … be patient. SEO takes a while to kick in, but know that you’re setting your site up for long-term success.
Get your sales funnel flowing
OK, so now you have your blog set up and optimized with these five simple on page optimization tips. Great! Customers are slowly trickling in. What do you do now? It’s time to leverage that investment of time and money to … make more money!
You’re going to want to set up what’s called a sales funnel. That’s the path your customer is heading down. You begin by getting their attention, and slowly you get them to buy something … and then something more expensive later on.
Email marketing campaigns are an effective way to keep customers coming back. It might seem old-fashioned, but email converts extremely well. And because you were smart and built your own site, you own the relationship with the customer, which means you can nurture them all the way down that funnel (with the help of targeted emails) to the big sale you need.
That’s it! These are the techniques you need to focus on when starting a T-shirt business that will actually make money. Keep an eye on your profit margin. Remember that you’ve got to keep the cash flowing, and don’t forget to market yourself. Best of luck to you!