Tuesday, September 28, 2010

Screen versus Digital. Where are the profits?

The question always comes to this.  Where do I make money and what is my best return on investment.  That is what needs to be looked at before you can determine how to invest in your future. 



The question of screen print versus direct-to-garment equipment is buzzing through the industry.  There is an allure the digital side of life.  Cleanliness, space constrictions, coolness of the art are all big selling points for that investment.  That being said, is there money to be made with these systems?  Probably.  However, is it the same market?  Probably not.





Below is the cost of a typical screen print job on 100 white shirts in 2 colors.  We are presuming an owner-operated shop.

Job costs
Per item
100 pieces
Shirt
$1.25
$125.00
Screens (2)
$1.00
$1.00
Artwork (2 color)
$1.00
$1.00
Consumables
$0.50(100)
$50.00
Total cost on the job
$177.00



Sales PricePer shirt100 pieces
Shirt
$4.00
$400.00
Screens
$20.00
Artwork
$20.00
Printing
$2.00
$200.00
Total sale price of the job
$640.00



How much did you make? $640 - $177= $463.00
Monthly Lease payment of a $10,000        $217.00
Final net on one order?                               $246.00

This puts the total cost to the customer at $6.40 per shirt.  



This is the same job on a digital printer.  100 pieces on white in 2 colors.  Owner-operated shop.


Job costs
Per item
100 pieces
Shirt
$1.50
$150.00
Artwork (2 color)
$1.00
$1.00
Consumables
$1.00(100)
$100.00
Total cost on the job
$250.00



Sales PricePer shirt100 pieces
Shirt
$4.00
$400.00
Artwork
$20.00
Printing
$2.00
$200.00
Total sale price of the job
$620.00



How much did you make? $640 - $250= $390.00
Monthly Lease payment of a $20,000 $425.00
Final net on one order? --- $35.00



This puts the total cost to the customer at $6.20 per shirt.  In order to get the same return on the job, the price to the end user has to be $9.00 per shirt.




What happens on a dark garment?  Here are the comparison scenarios again.  The differences are amazing.



This is the same job on a digital printer.  100 pieces on dark in 2 colors.  Owner-operated shop.


Job costs
Per item
100 pieces
Shirt
$2.50
$250.00
Artwork (2 color)
$1.00
$1.00
Consumables
$3.50(100)
$350.00
Total cost on the job
$600.00



Sales PricePer shirt100 pieces
Shirt
$6.00
$600.00
Artwork
$20.00
Printing
$3.00
$300.00
Total sale price of the job
$920.00




How much did you make? $920 - $600= $320.00
Monthly Lease payment of a $20,000 $425.00
Final net on one order? --- $105.00

This puts the total cost to the customer at $6.20 per shirt.  In order to get the same return on the job, the price to the end user has to be $18.68 per shirt.






Screen print  100 pieces on dark in 2 colors.  Owner-operated shop.


Job costs
Per item
100 pieces
Shirt
$2.50
$250.00
Screens (2)
$1.00
$1.00
Artwork (2 color)
$1.00
$1.00
Consumables
$0.50(100)
$50.00
Total cost on the job
$302.00



Sales PricePer shirt100 pieces
Shirt
$6.00
$600.00
Screens
$20.00
Artwork
$20.00
Printing with flash charge
$3
$300.00
Total sale price of the job
$940.00



How much did you make? $940 - $302= $638.00
Monthly Lease payment of a $10,000 $217.00
Final net on one order? $421.00

This puts the total cost to the customer at $9.40 per shirt.  





The thing we have not talked about is time.  To screen 100 shirts on white in 2 color takes 2 hours.  To digitally print the same takes 2 hours.



Black is another story.  With screen it is still less than 2 hours.  With digital you are now at 4.  



So, for some final analysis, to make a lease payment on a digital machine required 2x the work.  It also takes 2x the time to produce the work.   Doesn’t sound that profitable.

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