The Race to the Bottom: Why Being the Cheapest Print Shop Is a Losing Strategy

Every print shop has heard some version of this:

“The other guy can do it cheaper.”

And when business is slow—or when you really want the order—the temptation is obvious.

Lower the price.

Maybe knock 50 cents off each shirt. Reduce the setup charge. Eat the artwork fee. Give away shipping. Match the competitor's quote.

Whatever it takes to get the job.

Sometimes that makes sense. Pricing is competitive, and no shop operates in a vacuum.

But when lowering your price becomes your primary strategy for winning work, you've entered a race that's very difficult to win.

The race to the bottom.

And the problem with that race is simple:

Eventually, somebody is willing to work for less than you are.

Being Busy Doesn't Mean You're Making Money

One of the most dangerous things that can happen to a print shop is having plenty of work while making very little money.

The presses are running.

Embroidery machines are humming.

DTF transfers are coming off the printer.

Employees are putting in overtime.

Orders are stacked everywhere.

From the outside, the business looks successful.

But there's an important question:

Are those jobs actually profitable?

A shop can produce hundreds of orders every month and still struggle with cash flow if those orders aren't priced correctly.

That's why understanding your real costs is so important.

Garments are only part of the equation.

There is also labor, ink, thread, film, screens, transfers, equipment, spoilage, freight, utilities, software, rent, credit-card fees, administrative time, artwork, customer service, and dozens of other expenses involved in producing an order.

If you're pricing primarily by looking at what another shop charges, you may have no idea whether the price you're matching actually works for your business.

See how better reporting helps you understand costs, margins, and job profitability.

Your Competitor's Price Doesn't Tell You Their Costs

This is where competitive pricing can become dangerous.

A customer tells you another shop quoted $8.75.

You're at $9.50.

So you match $8.75.

But what do you actually know about that competitor?

Probably very little.

They may purchase garments at a different price.

Their equipment may already be paid for.

Their labor costs may be lower.

They may be operating from a building they own.

They may be running automated equipment while you're running manual equipment.

They may have dramatically different overhead.

They might even be losing money on the job.

Yet their price suddenly becomes the benchmark for yours.

That's not really pricing.

That's guessing.

A better starting point is understanding what it costs your shop to produce the job and what margin you need for the business to remain healthy.

The Cheapest Customer Can Be the Most Expensive Customer

There's another problem with competing primarily on price.

You start attracting customers who buy primarily on price.

That may sound obvious, but think about what happens next.

If someone chose your shop because you were $100 cheaper than the competition, what happens when another shop comes along that's $75 cheaper than you?

Their loyalty may disappear pretty quickly.

Price-sensitive customers aren't necessarily bad customers. Every buyer has a budget.

But if price is the only reason they chose you, you haven't given them much reason to stay.

That's why successful shops compete on more than the number at the bottom of the quote.

They compete on things like:

• Reliability

• Quality

• Communication

• Turnaround time

• Consistency

• Expertise

• Convenience

• Service

When those things matter to the customer, price becomes one part of the decision instead of the entire decision.

“But I Need to Keep the Press Running”

This is another argument we've heard many times.

The thinking goes something like this:

"I'd rather take the job cheap than have the equipment sitting there doing nothing."

And there are situations where that can make sense.

If you have unused production capacity and understand exactly what the job contributes toward overhead, taking lower-margin work can be a deliberate business decision.

The important word is deliberate.

There's a huge difference between:

"We know our numbers, we have available capacity, and this job still contributes enough margin to make it worthwhile."

and:

"We're slow, so let's knock 20% off and hope we make something."

One is a pricing strategy.

The other is desperation.

And desperation is rarely a good foundation for pricing.

Discounting Can Become a Habit

The first discount is usually easy.

Then the customer comes back.

Now they expect the same price.

Then another customer wants it.

Then salespeople start using discounts to close orders.

Before long, the exception becomes the normal price.

Meanwhile, your costs continue moving in the opposite direction.

Wages increase.

Garment costs change.

Shipping increases.

Equipment gets more expensive.

Software, insurance, and utilities go up.

If your costs are rising while your prices are constantly being pushed downward, eventually something has to give.

Usually it's your margin.

And once margins become thin enough, every mistake becomes much more expensive.

One misprinted dozen shirts.

One rush shipment.

One employee spending two extra hours fixing artwork.

One customer changing an order after production starts.

Suddenly the profit from the job is gone.

Efficiency Is a Better Weapon Than Discounting

There's another way to compete.

Instead of constantly asking:

“How can we charge less?”

Ask:

“How can we produce this more efficiently?”

Those are very different questions.

If it takes your staff 25 minutes to enter an order that could take five minutes, that's a cost.

If purchasing has to hunt through emails to figure out what garments need to be ordered, that's a cost.

If production loses time because artwork hasn't been approved, that's a cost.

If employees constantly interrupt each other asking about order status, that's a cost.

If a job gets produced twice because somebody was working from outdated information, that's definitely a cost.

This is where organization becomes directly connected to profitability.

Learn how to organize a screen printing shop for growth.

Reducing those hidden costs can allow you to offer competitive pricing without sacrificing the margin you need to survive.

Know Which Jobs Actually Make Money

Not every type of work contributes equally to your business.

You may discover that your embroidery department performs extremely well on certain order sizes.

Maybe small screen-printing orders are eating far more setup time than you realized.

Maybe rush jobs are profitable—but only when the rush charge is actually applied.

Maybe a customer who spends $100,000 per year isn't nearly as profitable as another customer spending $40,000 because of revisions, rush orders, special handling, and administrative time.

You can't improve what you can't see.

That's why shops need more than sales totals.

They need visibility into what's actually happening inside the business.

Revenue tells you how much money came through the door.

Profitability tells you whether it was worth doing the work.

Those are not the same thing.

Stop Selling the Same Thing as Everyone Else

There's another way to escape the race to the bottom:

Make it harder to compare your business based solely on price.

If two companies appear identical, price becomes an easy deciding factor.

But they're rarely identical.

Maybe your shop has better artwork capabilities.

Maybe you specialize in difficult embroidery.

Maybe your turnaround is more dependable.

Maybe customers can approve artwork online.

Maybe you communicate better.

Maybe you handle company stores, fulfillment, or repeat programs.

Maybe you've been printing for 30 years and know how to prevent problems before they happen.

Those things have value.

But customers can't value something they don't know about.

Your sales process needs to communicate why doing business with your shop is different.

Otherwise, you're just another quote sitting next to three other quotes.

Sometimes You Should Let the Job Go

This may be one of the hardest lessons in business.

You don't have to win every order.

If you've calculated the job properly, know what it costs to produce, and a competitor is willing to do it for substantially less, sometimes the right answer is simply:

Let them have it.

That doesn't mean your pricing should never be questioned.

Maybe your process is inefficient.

Maybe your garment costs are too high.

Maybe your production times need improvement.

Maybe your pricing model needs adjustment.

Those things are worth investigating.

But automatically lowering your price every time someone produces a cheaper quote isn't a strategy.

Eventually you reach a number where winning the order is worse than losing it.

Compete on Value, Not Just Price

There will always be someone willing to print a shirt cheaper.

There will always be a competitor running a promotion.

There will always be someone working from their garage with lower overhead.

And there will probably always be somebody who simply doesn't know they're underpricing their work.

You can't control any of that.

What you can control is how efficiently your shop operates, how accurately you price work, how well you communicate, how consistently you deliver, and how much value customers receive from doing business with you.

That's a much stronger position than simply trying to be the cheapest shop in town.

Because the goal isn't to win every order.

The goal is to win the right orders at prices that allow your business to remain healthy, invest in its people and equipment, and continue serving customers for years to come.

Get Better Visibility Into Your Shop

PriceIt helps screen printing, embroidery, DTG, DTF, and promotional products businesses manage estimating, orders, production, purchasing, artwork, scheduling, reporting, and more in one connected system.

When your information is organized and your team can see what's happening throughout the business, it's easier to make decisions based on real information instead of guesswork.

Schedule Your Personalized PriceIt Demo

About PriceIt Software

For more than 25 years, PriceIt Software has helped screen printing, embroidery, DTG, DTF, and promotional products businesses become more organized, efficient, and profitable. Backed by more than 35 years of hands-on experience in the decorated apparel industry, PriceIt combines real-world shop knowledge with powerful software built specifically for the industry.