So a couple months ago we took a risk and started offering a product that no other manufacturer creates on demand. What we’ve learned since then can have a huge financial impact on your store by driving sales and creating huge profits. Read on to find out exactly what we learned and how you can apply it to your clothing line.
The new products we started offering is apparel and hats with embroidered patches sewn onto them. Sure, you’ve seen these products before, but you were never able to create them on demand for dropshipping! In fact, embroidered patches are insanely popular products whether they are on hoodies or on hats, which is part of the reason we were inspired to offer this service to our brand parnters. What we didn’t realize, is that not only are these new products super on point aesthetically, they provide absolutely crushing margins compared with traditional embroidery and dropshipping methods.
Don’t Underestimate The Value Of Product Mix For Your Clothing Line
As you are building out your clothing line and online store, it’s important to understand how different products and offerings can create different value for your customers and your business. You’ve probably heard the term “loss leader” before, which is a great example of how balancing a product mix can work. A Loss Leader is a product that a business sells at break even or even a loss in order to attract new customers or to attract customers then upsell them to additional or different products that are profitable. Now, we aren’t advocating for you to go and create loss leaders, as you should only do so with great care, we are talking about the exact opposite, creating products that have insanely high margins.
Embroidered Patches Combat One Of The Most Challenging Problems With Print On Demand
Print on demand clearly has it’s benefits, but it also has drawbacks. Most notably, margins, especially within apparel. Traditional mass production of apparel can support very strong margins, but the margins tend to shrink when you move to on demand production. In order to combat that you need to carefully think through your product mix so that you also have products that can continue to drive great margins for you.
How Embroidered Patches Crush Margins Vs Traditional Embroidery
Let’s compare a few popular products/styles to see how patches stack up to traditional embroidery in on demand production.
| Product | Embroidery Cost | Embroidery Price | Embroidery Margin | Patch Cost | Patch Price | Patch Margin | Difference in Margin | Difference in Profit |
|---|---|---|---|---|---|---|---|---|
| Premium Snapback Hat | $17.00 | $34.00 | 50% | $9.50 | $34.00 | 72% | +22% | +$7.50 |
| Comfort Colors Heavyweight Shirt | $16.00 | $32.00 | 50% | $8.00 | $32.00 | 75% | +25% | +$8.00 |
| Independent Camo Hoodie | $36.25 | $72.50 | 50% | $29.50 | $72.50 | 59% | +9% | +$6.75 |
As you can see, using patches can significantly increase margins, especially with headwear or less expensive products like t shirts.
3 key factors to consider for patches
In addition to the financial benefits listed above, there are also non financial considerations for patches:
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- Aesthetics – Patches have a raised aesthetic and tend to sit on top of the garment or hat. For headwear, it’s similar to a puff embroidery affect.
- Placements – While embroidered patches share some similar placements to printing and traditional embroidery, there are some interesting new patch placement options, especially on hoodies and sleeves that are worth considering. Additionally, your one patch can be used in multiple products so it’s easy to
- Timing & stock – One drawback to custom patches is that they must be created in batches (50 minimum) and they take 2 -3 weeks to make.
It’s important to plan wisely with patches and closely monitor your stock or activate automatic stock management to ensure you don’t run out.
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