If you are into the custom apparel business, you probably have heard about Direct-To-Garment (DTG) printing. You may have seen YouTube videos promoting its high-profit margin as if it is a magical device that prints money. Well, what most custom t-shirt apparel entrepreneurs do not consider is the ‘hidden’ costs that come with owning a DTG machine.
Let’s get down to the real cost of owning a DTG printer.
The Initial Investment
The upfront cost when going DTG can be overwhelming for a fledgling business as the equipment needed is expensive. The printer itself is going to cost you anywhere between $16,000 to $250,000, depending on your business model. For this article’s purpose, let us use the Epson F2100 as an example, so it will cost $17,995 retail.
On top of that, you also need to purchase:
- a Pre-Treatment Machine (around $3,500)
- a Heat Press (about $1,500)
- a computer (starting price from $1,200)
- the RIP software (around $950)
Altogether you are looking at a total of at least $25,145 in upfront cost, not including blanks purchasing, lease payment, bills, labor costs, and ink costs. This leads us to our next point.
Ink & Maintenance Costs
DTG ink is expensive, as in $220 for 20 oz expensive (based on Epson F2100 ink price). While the CYMK inks take a while to run out, the white ink runs out much quicker, therefore it needs to be refilled sooner than you might expect.
But before you buy bulks of white ink, you have to know that white ink has to be shaken regularly so that the ink stays emulsified. If you pull the emulsified chunks through your print heads, you will clog the print head and will cost you hundreds of dollars to replace them if they are damaged. It will cause your shirts to be printed in streaks.
What most DTG buyers thought they had bought into was a “plug and play” machine without any desire to do any form of maintenance. That could not be farther from the truth.
Leaving your machine unattended for a couple of days is a costly mistake. You need to run regular cleaning cycles, clean your print heads every day, make sure your capping station is moist overnight, clean the wiper blade and so on. All these small maintenance tasks will prevent you from paying up to hundreds, maybe thousands of dollars in replacing parts.
Making Enough Money
To get a better picture of how much you can make, you have to calculate your Returns on Investment (ROI) according to your business model.
Let’s make some calculations:
Theoretically, if you can constantly produce 96 shirts daily and charge retail prices for your shirts, you only need 27.5 days to achieve ROI. Realistically, DTG customers order between 10 to 50 per .
Let us compare the pricing for an order size of 50 shirts with 4 colors between DTG and screen printing.
For DTG, the number of colors does not affect the price, which makes it great for printing complex artwork with many colors. In screen printing, a screen setup cost is involved and can be quite costly with more colors. Hence for small orders, screen printing is not as profitable as DTG, which does not require any setup costs, achieves ROI faster when charging retail and takes a shorter amount of time to print.
What happens when the order volume is larger, say 500 shirts?
For the purpose of this article, we used the Workhorse Cutlass 6-color-8-station ($34,250) and the Workhorse Odyssey Press 4-color-4-station ($4,000) as reference for automated and manual screen printing respectively.
With screen printing, the large order volume can easily cover the setup cost and ink costs, which is pretty much fixed. The production time is also much faster; manual screen printers can produce up to 500 shirts per 8-hour shift while automatic screen printers can produce up to 5,000 shirts in the same amount of time.
Unless you have a good SOP and print management software, it is much more practical for a screen printer to receive 5 large orders to achieve its ROI than 100 small orders.
For DTG, the production speed is fixed and prints relatively slower than screen printing, hence you are limited to a certain amount of shirts per 8-hour shift. In this case, it takes up to 5 days to complete the 500-shirt order, which is 1/5 of the speed of a manual screen printer. This makes DTG highly disadvantageous to compete with screen printing.
Since it is more expensive to print DTG, it is better to close 50 small orders with custom artwork rather than 5 large orders with simple designs.
Labor Cost
Even if you are a one-person business, you still need to calculate your labor cost to get a better idea on the amount of profit you can generate.
- Sales Time – the time you spend on finding your customers are all labor costs. For example, are they walk-in customers, or did you meet them at a networking event? Did you spend a day on outbound phone calls before you found this one customer?
- Accounting Time – how much time did you spend on creating a quote/proposal, calling vendors about your order, making your invoice?
- Shipping & Handling – packing and shipping are just part of handling costs. Are you using branded boxes? Mailing labels? How will you deliver your orders?
Many little things go into processing a sales order. Is it still going to be profitable for you? YES, it almost certainly is, but you have to do a realistic assessment of the labor costs involved.
Conclusion
There is a growing market for the custom apparel business to flourish with the help of DTG. For small orders with complex artwork and a wide spectrum of colors catering to custom apparel customers, DTG can easily meet this demand.
The challenge is to work out the ROI by factoring in the costs incurred by the equipment needed, maintenance and labor. You would need to sell your items at a higher price, making DTG more suited for retail and fulfillment of promotional products rather than wholesale.
On the other hand, screen printing is more profitable with large-volume orders up to hundreds and thousands, and still can be sold at wholesale price.
Once you are informed of the full cost of owning a DTG, you can make the right decisions to save on costs and earn more profit for your business.
