If you are into the custom apparel business, you probably have heard much about direct-to-garment (DTG) printing. You may have seen YouTube videos promoting its impressive print quality and the high profit margins you can earn – as though DTG is a magical MacGuffin that prints money to your benefit. Unfortunately, most custom t-shirt apparel entrepreneurs seem to forget about the ‘hidden’ costs of using a DTG printer.
Let’s get down to the real costs of owning a DTG printer.
The Initial Investment
The upfront cost of DTG can be overwhelming for a fledgling business as the equipment and supplies needed are expensive. Depending on your business model, the DTG printer will cost anywhere between $10,000 and $250,000.
While you have budget-friendly, entry-level options, these printers mainly cater to newcomers to the apparel decoration industry. Many of these printers lack more advanced capabilities that enable you to reach a wider customer base.
For example, most entry-level printers can’t print reliably on dark garments; most cater solely to light-colored garments. While you can still print on dark garments, you might have to use more ink to ensure the colors of the design stand out. This can cost you significantly in the long run.
Moreover, entry-level printers have slower print speeds than the popular mid-range printers. Again, these are meant for newcomers to DTG printing who only get small order sizes that go anywhere between 5 to 30 pieces per order. Getting multiple entry-level printers might seem like a good idea, but trust us when we say it can be more costly than simply switching to a mid-range printer (and scaling appropriately as your shop grows).
Testing the waters with an entry-level printer or two may be a good idea if you’re already an established print shop with decent orders. However, once demand increases, you’ll need to upgrade to keep up with said demand or risk losing customers.
Key Considerations
For this article, let’s take the Epson SureColor F2100 – a well-known and reliable DTG printer – as an example, which now costs $11,995 at retail price.
On top of that, you also need to purchase:
- a pre-treatment machine for pretreating garments before printing (at least $1,995; high-quality automatic pre-treatment machines can cost above $3,500)
- a reliable heat press (about $500 and above, depending on the size)
- a computer (starting price from $1,200, excluding design software licenses)
- design software ($55/month for Adobe Creative Cloud and all its applications, including Photoshop, or $660 annually)
- consumables for the DTG printer and pre-treatment machine (at least $500 for a starter kit without any equipment)
- various platens and other accessories for printing on different sizes or materials (price varies, but let’s assume you paid $500 for a professional DTG accessory kit)
- the raster image processing (RIP) software for accurately printing the design to the garment (at least $500 for a professional license)
Altogether, you are looking at a total of at least $17,350 in upfront costs, which hasn’t included other aspects like purchasing blanks, lease payments, bills, labor, and ink costs. You could buy a starter kit that comes with a DTG printer and all the tools you need to start off, but you’ll be paying around the same price, if not a little more.
This leads us to our next point.
Ink & Maintenance Costs
DTG ink is expensive, as it can cost up to $220 or more just for a 600ml cartridge for the Epson F2100. While the CYMK inks take a while to run out, the white ink runs out much faster as you’ll need it for your underbase per shirt printed. You’ll find that you’ll be refilling white ink a lot more often than you initially thought.
But before you buy bulks of white ink, you must 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 can clog them up, costing you hundreds of dollars to replace them when they’re damaged while causing ink streaks to be printed.
What most DTG buyers thought they had bought into was a “plug and play” machine without needing to do any form of maintenance. That could not be farther from the truth! The best printing results come from printers that get regular maintenance to ensure the best quality prints.
Leaving your machine unattended for a couple of days is a costly mistake. You must run regular cleaning cycles, clean your print heads daily, ensure your capping station is moist overnight, 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 better understand 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 your ROI. Realistically, DTG customers place between 10 to 50 garments per order, but you can go a little further with some extra elbow grease. However, note that it might not be the most effective way to profit.
Small Order Comparisons
Now let’s compare the pricing for an order size of 50 shirts with 4 colors between DTG and screen printing. We’ll start with screen printing.
Now, let’s compare this to DTG printing. We’ll also use the $17,350 figure we got earlier to find your ROI, assuming you’re using that setup to conduct your DTG printing business.
For DTG, the number of colors doesn’t affect the overall price, nor do you need to worry about a lengthy setup process, which makes it great for quickly printing complex artwork with varying colors. You can also see that screen printing is not as profitable as DTG for small-volume orders, especially with the lengthy setup process needed before you can start printing anything.
But what happens when the order volume is larger, say 500 shirts?
Large Volume Comparisons
For our next example, we’ll use the Workhorse Cutlass 6-color-8-station (estimated at $40,500) and the Workhorse Odyssey Press 4-color-4-station (around $4,600) as a reference point for automated and manual screen printing, respectively, for a 4-color order.
Much like the earlier DTG example, we’ll find the ROI for each machine by dividing its cost by the profit from an order.
With screen printing, the large order volume can easily cover all your setup and ink costs, which are your fixed expenses. The production time is also much faster and more efficient; manual screen printers can easily produce up to 500 shirts in an 8-hour shift, while automatic screen printers can quickly produce 5,000 shirts or more in that same timeframe.
Unless you have a good SOP and print management software, it’s much more practical (and cost-effective) for a screen printer to receive five large orders to achieve its ROI than 100 smaller orders.
For DTG, we’ll take the screen printing price per shirt from the above example ($8.50) and make a comparison with DTG’s to see how long you’ll need to achieve your ROI with DTG.
DTG’s production speed is fixed, and its print speed is relatively slower than screen printing. Hence, you’re limited to printing a fixed number of shirts in an 8-hour shift. In this case, it takes up to five days (if not longer) 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.
There are ways you can still improve your ROI, but they aren’t very cost-effective solutions. The simplest method is to raise your prices, but you can lose customers as a result. The other way would be to acquire more effective equipment to boost productivity, but that only increases the time needed to achieve your ROI.
Since it’s more expensive to print DTG, it’s better to close 50 small orders with custom artwork than complete 5 large orders with simple designs.
Labor Costs
Even if you are a one-person business, you need to calculate your labor costs to better understand your profitability. Labor costs aren’t solely tied to costs associated with staffing and payrolls.
- How much time do you need to find new customers? How many walk-in customers do you get? Are you able to find new ones through networking or at events? Did you spend a day on outbound phone calls before you found this one customer?
- How much time did you spend on accounting matters? Does it take long to prepare a quote/proposal? How often do you contact your vendors/suppliers?
- How much time do you spend with shipping/fulfillment? Which shipping providers do you use?
Many little things go into processing and completing a sales order. Is it still going to be profitable for you? We can almost certainly say the answer is yes, but you should have a realistic assessment of the labor costs involved. What’s reasonable within your business budget, for example? You’ll have to think of this with your business partner(s).
Conclusion
There is still demand for DTG within the apparel decoration industry. For small orders with complex artwork and a wide spectrum of colors catering to custom apparel customers, DTG can easily meet this demand while delivering high-quality prints.
The challenge is working out your ROI by factoring in the costs incurred by your equipment, maintenance, and labor concerns. Given its slower printing speed and pricey equipment and consumables, DTG is well-suited for small retail orders and the fulfillment of promotional products. On the other hand, screen printing is more profitable with large-volume orders up to hundreds, if not thousands, and still be sold at wholesale prices.
Once you know the full cost of owning a DTG printer, you can make smarter decisions to manage your expenses while generating healthy profits with every order you complete.
