The short version, on the assumptions set out below: print-on-demand costs per shirt are dominated by about $17 of fixed cost that leaves the building on every order regardless of your price. A $19.99 tee nets you 29 cents after fees and a returns reserve. The same shirt at $34.99 nets $13.42. The extra fifteen dollars of price costs you barely two dollars to collect, which is the whole argument for pricing up.
Below is the full chain, worked line by line, with every assumption stated so you can substitute your own.
How much does a print-on-demand shirt actually cost to sell?
On a $26.99 tee with a $12 base cost and $4.75 postage, Etsy's listing fee, 6.5% transaction fee and 3% plus $0.25 processing take a further $3.01. After a 3% returns reserve you keep $6.42, or about 24%. Roughly $17 of that cost is fixed regardless of your price.
The assumptions, stated up front
These are the inputs for every figure below. They are a plausible mid-market setup, not a claim about your shop.
Base cost: $12.00. One printed mid-weight cotton tee, front print, from a provider in the middle of the market. Cheap blanks go lower and heavyweight garment-dyed goes considerably higher, which is one of the reasons choosing a print provider deserves more thought than a price comparison.
Printer's postage: $4.75. A single item shipped domestically within the United States. Extra items in the same order are usually much cheaper, and international is much more.
Etsy listing fee: $0.20. Charged when you list, and again each time the listing renews after a sale.
Etsy transaction fee: 6.5% of the order total, and the order total includes whatever the buyer paid for delivery.
Payment processing: 3% + $0.25. That is the United States rate. Processing rates differ by country and some countries carry an additional regulatory operating fee, so check yours rather than borrowing this one.
Returns and reprints: 3% of revenue, held back as a reserve. This is the number most likely to be wrong for you, and the one worth measuring rather than assuming.
Delivery is free to the buyer in all three cases, which is to say the postage is inside the price.
Print-on-demand costs per shirt, worked end to end
| Line | $19.99 shirt | $26.99 shirt | $34.99 shirt |
|---|---|---|---|
| Buyer pays | $19.99 | $26.99 | $34.99 |
| Base cost | −$12.00 | −$12.00 | −$12.00 |
| Printer's postage | −$4.75 | −$4.75 | −$4.75 |
| Listing fee | −$0.20 | −$0.20 | −$0.20 |
| Transaction fee at 6.5% | −$1.30 | −$1.75 | −$2.27 |
| Processing at 3% + $0.25 | −$0.85 | −$1.06 | −$1.30 |
| Left before returns | $0.89 | $7.23 | $14.47 |
| Returns reserve at 3% | −$0.60 | −$0.81 | −$1.05 |
| Net per shirt | $0.29 | $6.42 | $13.42 |
| Net margin | 1.5% | 23.8% | 38.4% |
The shape of that table is the point. The costs that scale with price — the two percentage fees — are small. The costs that do not scale at all — the base cost, the postage, the listing fee, the twenty-five cents — are large and identical across all three columns.
Which means the marginal fifteen dollars between the cheap shirt and the expensive one is nearly all yours. You keep $13.13 of it, because the only extra costs are the two percentages and the slightly larger returns reserve. To rerun the marketplace side with your own price and country, check the Etsy fees on an order before you commit to a price point.
Why the cheap shirt is usually the worst business
Twenty-nine cents a shirt is not a margin, it is a rounding error. Consider what has to go right to collect it: the design has to be good, the listing has to rank, the photograph has to convert, the printer has to get it right, the post has to arrive, and the customer has to be happy. That is the same amount of work the $34.99 shirt requires, for one forty-sixth of the return.
Then consider what happens when one of those goes wrong. A single order that has to be refunded costs you $16.75 in goods and postage you have already paid the printer and cannot get back. At $0.29 a shirt you need 58 clean sales to absorb one refund. At $13.42 a shirt you need one and a quarter.
That is the real argument, and it has nothing to do with greed. A thin margin is not merely a small margin. It is a margin with no capacity to absorb the ordinary failures of a business that ships physical objects made by machines and delivered by strangers.
There is a second-order effect too. At twenty-nine cents you cannot afford to send a replacement to a customer who is upset about something that was not your fault, so you argue instead, and the review reflects that. At thirteen dollars you replace it, say sorry, and keep the five-star average that decides whether the listing keeps its traffic.
Free delivery is not free, and Etsy taxes it either way
Free delivery is a pricing decision dressed as a generosity. The postage still costs $4.75 and it still comes out of the same pot; the only question is which line of the receipt it appears on.
What surprises people is that splitting it out saves nothing. Etsy's 6.5% transaction fee applies to the order total including the delivery the buyer paid. Charge $19.99 plus $4.99 postage and the fee is 6.5% of $24.98, which is $1.62. Charge $24.98 with free delivery and the fee is 6.5% of $24.98, which is $1.62. The processing fee behaves the same way. The two structures are arithmetically identical.
So the choice is not about fees at all. It is about the fact that a listing with free delivery is treated more favourably in search in the markets where Etsy promotes it, and that shoppers comparing two similar listings reliably prefer the one without a postage line. Given identical arithmetic, take the version that converts better.
The genuine saving on postage is elsewhere: a second item in the same order usually ships for a fraction of the first. If your catalogue encourages two-item orders, that is worth more than any fee optimisation available to you.
What Offsite Ads does to a thin margin
When Etsy places your listing in an advertisement on another platform and the click results in a sale, Etsy charges an Offsite Ads fee on the order total. It is 15% for shops below the revenue threshold and 12% for shops above it, and shops above that threshold cannot opt out. Rates and thresholds change, so confirm the current figures against Etsy's own fee page before you plan around them.
| Line | $19.99 shirt | $26.99 shirt | $34.99 shirt |
|---|---|---|---|
| Net on an ordinary order | $0.29 | $6.42 | $13.42 |
| Offsite Ads fee at 15% | −$3.00 | −$4.05 | −$5.25 |
| Net on an ad-attributed order | −$2.71 | $2.37 | $8.17 |
The $19.99 shirt loses money every time Etsy successfully advertises it. Not "makes less" — loses. And because your net on an ordinary order is twenty-nine cents, it takes roughly nine full-price sales to pay for one advertised one. If more than about one order in ten arrives through Offsite Ads, that product is running at a loss and the sales figure on your dashboard is telling you the opposite.
The $34.99 shirt takes the same charge and still clears eight dollars. It is not that the expensive shirt is immune to fees. It is that a percentage fee is survivable only when there is a margin for it to be a percentage of.
There is a cheaper source of orders than paid placement, and it is the one most sellers under-use. A listing eligible for the right searches gets traffic it does not pay a percentage on, which is why the thirteen Etsy tags on a listing are worth more attention than the ads dashboard.
The numbers most likely to be wrong for you
Your actual base cost. Providers price by garment, colour, size and print size, and 2XL and above almost always carry a surcharge. If your bestseller skews large, your average base cost is higher than the figure on the product page you read once.
Your actual postage. The $4.75 is domestic and single-item. International and multi-item orders both move it substantially, so if a meaningful share of your sales cross a border, your average is not the number on the price list.
Your actual returns rate. Three per cent is a placeholder. Apparel returns run higher than most categories because of sizing, and a shop selling one heavily size-dependent product can sit well above that. Work it out from your own last hundred orders; it is the single input with the most power to change the answer.
Rather than rebuild the table by hand each time one of those moves, work out the print-on-demand profit on your own numbers instead of borrowing mine.
What to do next
Two calculations, ten minutes, before you set a price rather than after the first refund arrives.
Start with the Etsy fee calculator. Enter your selling price, your delivery charge and your country, and it returns the listing, transaction and processing fees on that specific order — including the part people get wrong, which is that the percentage applies to postage too.
Then take that figure into the print-on-demand profit calculator along with your real base cost, your printer's postage and your measured returns rate. It gives you the bottom two rows of the table above for your own product, which is the number that should decide what you list.
The conclusion is not "charge $34.99 for everything". It is that fixed costs in this business are large enough that price is the only lever with real leverage. If a product cannot support a price with a workable margin, the answer is a different product, a different base garment or a different market — not a thinner slice.