Hi all!
Apologies if this has been covered before, and thanks in advance to anybody that can offer some assistance!
I use Printful (the print-on-demand service), and I’ve just had my first order placed. The customer paid £22.51 in total (covering the cost of the item itself, plus the postage costs). Shortly after I requested the fulfilment of this order, my banking app has a new entry in the “Pending Transactions” list, with a payout to Printful; but it’s showing as £26.99 instead.
Please help me understand how I’m paying out more than I’m being paid?
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Hey there, @Kincoran . Thanks for taking the time to reach out to the Shopify Community with your question around product production costs! It’s great to meet you!
Based on the information you’ve shared, it sounds like you haven’t adjusted the price of these products in your store yet. Is this correct? The reason why I assume this is because it definitely does cost some capital to produce the clothing post-order, but the standard practice to be able to absorb this cost without much impact is to increase the price of the clothing in your store so they it easily covers the cost of production. This is something nearly all PoD-using businesses do, or should be doing, to ensure they’re earning more than what they’re spending on production.
It’s likely that Printful charges a particular amount for their production costs, so you’ll want to make sure you adjust your product prices to account for that. Once you’ve adjusted your product prices, you should be good to go!
Are you new to print on demand business? What sort of products are you selling?
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Hi @Imogen_1 ,
Thanks for getting back to me!
I’ve set my prices on Printful (which have a decent mark-up over the production cost). My problem is that I’m getting charged my country’s VAT amount (UK = 20%) on the final amount that my customer has paid. So (just using rounded numbers for the simplicity of example):
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Customer chooses one of my products to buy…
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Customer pays £15 (£10 production cost + my £5 mark-up).
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Customer also pays £3 shipping.
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So the customer’s final Amount to pay is £18.
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Customer finishes the order, and that £18 gets sent to me via Shopify.
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But my bill to Printful is £21.60 (because the customer’s end amount is being taxed, rather than just the production costs, or even just the production costs + the shipping costs)
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This means that there’s no possible way for me to charge enough on top of production costs to make any profit, because it’s THAT final amount that’s getting taxed.
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Printful have a video on their website explaining that how those taxes are collected will change if I get VAT registered - but that’s for businesses bringing in £85,000 a year or more - and I’m only just starting off. So that’s not an option.
So, is this whole match-up (Shopify + Printful) only intended for businesses that are already hitting the ground running, making a decent income already/elsewhere?
My other question (and apologies if this is something very simple that I’ve just been missing from the start): Should I instead have different prices set on Printful to the ones that I have set on Shopify? E.g. if I create a product on Printful with a production cost of £10, and rather than add the extra £5 there (on Printful) I instead add that mark-up on my Spotify account/store’s product section…
(To answer your questions at the end, I’m trying to selling clothes and accessories, and yes I’m quite new to this for the most part; other than having used some other PoD sites that instead have you act more as a designer than as a shop-owner).
Thanks so much for your time.
Hey again, @Kincoran . Thanks a bunch for follow up with me here! You’ve got a few questions here, so I’m happy to dig in and discuss them with you. Just to set some expectations, Printful is a third party service, so our support scope may be a bit limited. There may be times where I may refer you to speaking to their support team directly for better information than what I can provide.
First, it would be incredibly odd for you to not be able to generate a profit at all using Printful. I believe that there may be some confusion around the pricing of your products, and the role VAT plays with your orders. With VAT charges occurring in Printful, I can’t say much about those, as they’re the ones charging that value. However, I’ve worked with several other merchants in the past who were just starting out who were able to get a VAT number and not run into this issue. I strongly recommend connecting with Printful around your questions with VAT and these charges - they’ll be able to explain things in greater detail than we can here when it comes to managing their charges. But, based on my experience, this should be an issue that you can resolve and not have to be worried about, as many folks start off with no capital with a Shopify + Printful business.
Based on helping folks with setting up Printful in the past, I definitely recommend updating and increasing your prices directly within Shopify, and not within Printful. I suggest this because your customers will be charged whatever price you charge them via Shopify, and then the cost that is set to produce the product within printful is what you will be charged by them. Increasing your prices directly within Shopify is how other businesses using PoD and dropshipping drive profits, for example. In theory, doing this should help prevent you being charged VAT charges on the mark-up you have set in Printful. I’d consider removing that Printful mark-up.
You should be able to have different prices within Printful and Shopify. Ideally, you price in Shopify is higher to ensure you’re collecting as much profit as you can from your sales to pay for product, and to pay yourself!
Let me know if this information helped clear things up a bit. I’ll keep my eyes peeled for your reply.
Hi again @Imogen_1 ,
Thanks again for your on-going help, I genuinely appreciate it!
So, half of my problems and questions have been cleared-up: Long story short, the first orders I had were baseball caps - which require a file digitisation cost to me the first time around (which I didn’t know about), on top of everything else. Through a combination of both (A) bad luck on my part, and (B) also a fair bit of idiocy on my part, because I had just so happened to have chosen an amount of mark-up that was identical (to the penny) as this “File Digitisation” addition to my bill, I’d illogically allowed myself to assume that (despite it being a weird name for it) what was showing as “File Digitisation” must for some reason be the mark-up that I’d put on. And it was this digitisation item on the bill that was also being VAT-taxed (since it was, technically, also a part of the production cost of the hat itself). THAT was what made it look like whatever mark-up I chose was being VAT-taxed, too (which would mean that nothing I could ever increase my retail price up to would ever break even, even if I charged a billion pounds per hat).
So thank you for baring with me through my own silly mess, there. But on to a question that I have regarding your advice last time:
When I try to set independent prices on Printful and Shopify (putting the mark-up on my Shopify prices only, and leaving my Printful prices low, as recommended) my Printful prices seem to automatically adjust themselves up to match the Shopify prices. Is there a way to prevent that, that you know of?
Thanks again!
Hey there, @Kincoran . Thanks for following up with us here! Appreciate you providing that explanation. I think it had more to do with bad luck than anything else, but I’m glad you’re got things figured out in regards to those first few orders! So odd that the digitisation fee matched up with your mark-up. Wild!
If Printful is updating product prices to match what you have showing in Shopify, this is likely a consistency practice, and not intended to be an issue, and likely can’t be prevented within Shopify. However, you mentioned in your previous posts that the price your being charged by Printful is seemingly accounting for the price you set for your customers. From my understanding, Printful should be charging you a cost for production that is independent from the prices you set for your customers. With Printful being third party, we can’t say much about how their billing and charges work, as we wouldn’t want to provide incorrect information.
As long as Printful isn’t charging you based on the selling price you have set in Shopify (and in turn the selling price Printful sees), then there’s no issue with the prices updating to match. However, if Printful is billing you production costs based on the price you’re selling the products for, then I recommend reaching out to Printful support to clear up any confusion around how their billing works. I wish I could provide more insight into their billing schemes, but it’s not something we’re able to do since it’s a third party billing you for those charges.
i can’t believe how much prinful charges. Even for mugs! It’s an insane amount and no customer would pay this much for something. I just made a £30.00 loss. I’m thinking of getting my stuff printed independently from printers and handling shipping myself. Waste of time and money.