Digital Dollars & Sense: Does Inkjet Garment Printing make Financial Sense?
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Does Inkjet Garment Printing Make Financial Sense?

Does Inkjet Garment Printing Make Financial SenseThere is a lot of commotion these days about inkjet garment printing and how it is going to take over the screen printing industry. Although I agree that it is definitely going to change the way we do and perceive our businesses it is going to be a few years before digital garment printing takes a very large piece of screen printing's pie - but it is coming and quickly.

So, what does this mean to you? Is this just a fad, or is it really an idea who's time has come to pass? I believe that, although the technology really is still in its infancy for our industry, it is definitely here to stay and will impact garment decorators of all types. Is it really possible, like the old saying goes, to "have your cake and eat it too" with digital garment printing?

Digital Inkjet Garment Printing technology is definitely a lot different than screen printing. With screen printing you can get started for a very nominal amount of upfront capital, but it is a very exacting science with screen meshes, emulsions, color separations, and more. So, if you have the time to devote to developing your printing skills but don't have a lot of money you can easily get started in screen printing. It is almost the opposite with digital garment printing. The upfront capital costs will run you from $11,000 (on the low side of the spectrum) to over $150,000 for the most expensive units but, although there is a learning curve, it is much less than screen printing or embroidery.

This means that unless you already have an existing customer base either by screen printing, embroidery, or promotional products distribution that are currently purchasing products from you, then you might have a much tougher time making a go of this technology. I am not saying that you couldn't start a whole new business based just on this technology, but having an existing customer base makes it much easier to lay out the money to get into digital garment printing because you can convert over existing jobs to the new technology.

Let's assume that your total capital investment is going to cost you about $20,000 for your new digital garment printer and setup. On a 5 year lease this is going to run you about $425 depending on your credit rating. So, the real question is can you afford the $425 a month payment on the inkjet garment printer AND make money to live on. This is what we will explore.

Exploring the Digital Divide
In screen printing when people want short run, multiple color designs printed on a shirt they end up either having to pay an outrageous amount of money for the shirts and screens or they opt down to just a single color or two to save money. The beauty of inkjet garment printing technology is that you can do only a single shirt, or a whole bunch of shirt - all with a single color or in full color with no screens, no chemicals, no setups and your cost is virtually the same as it is for a single shirt as it is for 500 shirts. So, how does this translate for us into dollars and sense?

Let's assume that we are printing on a white 100% cotton T-Shirt that is going to cost us $1.50. This cost is going to be the same whether we are screen printing the shirt or digitally printing the shirt. In most examples the cost of the ink for digitally printed shirts is going to be about $1.00 per imprint (based on the Brother GT-541 machine) with a print rate of about one garment per minute produced (add another 30 seconds for the curing of the ink under a heat press). Now, this is where the tricky part comes in. Let's take a look at two sample jobs for both digitally printing and screen printing - a 2 color print and 4 color print for both 12 shirts and 50 shirts.

The Sample Jobs
We are going to assume that setup times for the screen printing are 30 minutes per color (which on average it should be as an industry standard) and print rates of 80 shirts per hour for the 2 color design and 60 shirts per hour for the 4 color design.

We are of course ignoring at this point the time it takes to print out the film positives, coat the screen, etc. to keep our example simple. However, let's now total out the costs for each of our printing jobs in the table below assuming:

Per color Setup and Teardown per Screen: 30 minutes
Print rates of 80 shirts per hour for 2 color and 60 shirts per hour for 4 color jobs
Ink cost for screen printing of $.04 per color and $1.00 per print for digital prints
Screen costs (including film positives, mesh, labor, etc) = $10.00 each

12 Shirt Order
  2 Color Design 4 Color Design Digitally Printed
Shirt Cost: $ 18.00 $18.00 $18.00
Screen Cost: $20.00 $40.00 n/a
Setup Time: 60 min/$40.00 120 min/$80.00 5 min/$3.33
Printing Time (labor): 9 min/ $6.00 12 min/$8.00 18 min/$12.00
Ink Cost: $.96 $1.92 $12.00
Total Cost: $84.96 $147.92 $45.33
Cost per Unit: $7.08 $12.33 $3.78

Just in costs you can see that on the 12 shirt order the digitally printed shirt is almost HALF of what the 2 color design would cost you and is 3.3 times less expensive than the 4 color job and we haven't included a profit into the shirts yet at this point! Now, what would you sell all these shirts for? That's entirely your decision, however, you can see that there is a built in profit margin in the digitally printed shirts already of $3.30 over the 2 color design and $8.55 on the 4 color design. What does this mean? YOU CAN MAKE SOME REAL MONEY WITH DIGITAL GARMENT PRINTING.

You might be saying, that's nice. But what about bigger orders like 50 shirts? Let's do the same analysis on the 50 shirt order:

50 Shirt Order
  2 Color Design 4 Color Design Digitally Printed
Shirt Cost: $ 75.00 $ 75.00 $ 75.00
Screen Cost: $20.00 $40.00 n/a
Setup Time: 60 min/$40.00 120 min/$80.00 5 min/$3.33
Printing Time (labor): 37.5 min/ $25.00 50 min/$33.33 75 min/$50.00
Ink Cost: $4.00 $8.00 $50.00
Total Cost: $164.00 $236.33 $178.33
Cost per Unit: $3.28 $4.73 $3.57

It would appear that the 50 shirt order that was 2 colors would be better served if it was printed manually however let's take a closer look at the times. In the manually printed job it would take a total of 97.5 minutes to print the job. The digital job, by contrast, would only take 80 minutes to print. How much is our time worth in this example? $40.00 per hour. So, the 17.5 minute difference translates into an additional $11.67 difference in favor of the digitally printed garments, or, $.23 cents additional cost per manually printed shirts. This brings the total for the manually printed shirts to $3.51 per shirt compared to $3.57 for the digitally printed shirts. So, how much is $.06 worth to you if you don't have to deal with the messy inks, chemicals, reclaiming?

The Big Question
The big question is it really worth the expense? Can you sell enough shirts to make the monthly payments? The one expense we didn't factor into the above equation was the monthly payments on the machines because we don't know how much was spent on the manual screen printing equipment as compared to the digital equipment. But, the real question is what is the ROI on your investment?

Taking the above calculations and figuring a lease payment of $425.00 per month and selling the shirts for on average at a price of $8.00 each you would need to sell 100 shirts a month to make the lease payments ($8.00-$3.78 cost= $4.22 - then $425/$4.22=100 shirts). At $9.00 per shirt it works out to only 82 shirts to cover your lease payment. Every shirt above and beyond that is money in the bank.

So, is digital garment printing for you? That depends again on your volume of shirts you are currently doing and how many you can run on a digital inkjet garment printer. If you can print 500 shirt a month this translates into an additional $1688.00 in your pocket. The more shirts per month the more you can make. You also need to remember that if you are printing 12 shirts you had better not be selling the shirts for $8.00 each but for a higher margin around $12.00 - $15.00 per shirt. Why? How much would you need to charge if you screen printed them? That's the numbers you have to look at. So, selling your 12 shirts at $12.00 each nets you a total of $8.22 per shirt or $98.44 for 18 minutes of work. Translation: $328 per hour if you are printing 12 shirt orders!

The Conclusion
The real conclusion of digital garment printing is not if you are going to do it, but when are you going to jump into the digital waters and start making money. There is a whole new market available for those who see the opportunity to print shirts digitally. There are so many businesses and groups that would love to have full color or multi-color printed garments that can't afford the pricing that screen printing requires. Now, your customers can have their cake and eat it too - while you make money...

Written by Brian Walker of Direct2Shirt.com - www.direct2shirt.com

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