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Clothing Business Profit Margin

Clothing Business Profit Margin

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Clothing Business Profit Margin Calculator
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To set up a successful business, figuring out its profit margin is essential. With this data, you can create profit-making strategies for your clothing business and ensure its long-term growth.

What is a good profit margin for clothing and t-shirt business?

A good profit margin for the clothing and t-shirt business is 30-60%. However, it might vary according to your clothing niche, target market, competition, and business model.

The profit margin for a clothing and t-shirt business is the percentage of the money you earn by selling a product over your manufacturing and purchasing costs.

For example, your manufacturing cost of a t-shirt is ₹200, and you sell that item for ₹250, so your profit is ₹50 for one t-shirt. Now, if you are selling 100 t-shirts, you can earn a profit of ₹5000.

How to calculate clothing business profit margin using Qikink’s calculator?

To calculate clothing business profit margin, use the above Profit Margin Calculator. Here are a few steps to follow:

  • Select Category: Under the select category column, you will find multiple clothing ranges, from where you need to choose the niche you want to find your profit margin for.
  • Clothing products: Next, you need to select a particular clothing product, like t-shirts, crop tops, shirts, etc., that you want to sell and measure your profit margin.
  • Quantity: To understand your profit margin, you must insert the quantity of items. This will help in calculating your overall profit margin for the number of items you put for sale.
  • Product type: Here, you can choose either plain t-shirts or printed t-shirts, and each of these categories will have a different pricing model and GST charges.
  • Selling price: Set the selling price for each clothing item, and the calculator will find out your profits according to that.
  • Shipping charges: Your customers may place a prepaid order or a COD order. You need to select either of them on the calculator and pay the respective charges.

After you input all these details into the Profit Margin Calculator, it will generate a profit margin for your clothing niche. 

Clothing and T-Shirt Profit Margin Formula

Profit margin = ((Selling Price) – (Product Price + Product’s GST + Printing Cost+ Printing GST + Shipping)

Product: For example, you want to sell a unisex t-shirt classic product, which usually starts from ₹160 per piece. GST on the product is (5% of ₹160) ₹8.

Printing: If you want plain t-shirts, you need to pay a handling charge of ₹20 + 18% GST. And for printed t-shirts, you pay a printing charge of ₹100(min) + GST. Here, we are considering printed t-shirts for our example, and the printing GST is (5% of ₹100) ₹5. 

Shipping: Additionally, you need to calculate the shipping charge which is ₹50 for prepaid orders and ₹100 (shipping ₹50 + COD charge ₹50) for COD orders inclusive of GST. We will consider the order as prepaid and pay ₹50 for shipping.

Selling price: Finally, you then set a selling price of ₹549 each after considering all your costs, including printing costs, GST, and shipping charges.

Now, let us put all the inputs in our Profit Margin Calculator to measure our clothing business profit margin.

Profit margin = ((Selling Price) – (Product Price + Product’s GST + Printing Cost+ Printing GST + Shipping)

Profit Margin = ((549) – (160 + 8 + 100 + 5 + 50)) = ₹226

So you have a profit margin of ₹226 upon selling a unisex t-shirt classic product.

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