Print-on-demand t-shirt sellers eat fees twice
Every print-on-demand seller knows the feeling: you list a t-shirt at $24, it sells, and somehow you walk away with under $4. The reason isn't mysterious — it's structural. POD shops absorb two layers of overhead that single-source sellers don't: a fulfillment supplier (Printify, Printful, Gelato) takes their cut on cost, and Etsy takes their cut on revenue. Both stacks compound on every order.
Where every dollar of a $24 t-shirt sale goes
Run the typical scenario: $24 shirt + $5.50 shipping charged = $29.50 gross. Etsy's stack on that gross order:
- Listing fee: $0.20
- Transaction fee (6.5% of $29.50): $1.92
- Payment processing (3% + $0.25): $1.14
- Off-Site Ads at 15%: $4.43
That's $7.69 in Etsy fees. Then your supplier takes $11 for the shirt itself and $5.50 for shipping. Net profit: $5.31. Margin on the item: 22% — but that includes none of your design time, marketing time, or customer service.
The 15% Off-Site Ads fee is the single largest line item, and it's often the difference between a profitable POD shop and a loss leader.
The common mistake: matching your competitors' prices
POD shops often anchor pricing on what other Etsy sellers charge for similar shirts. The problem is that the cheapest supplier on Etsy may be running unsustainable economics — or selling at scale where the $100 Off-Site Ads cap helps them but won't help you yet. Pricing is not a vote.
The other failure mode is absorbing shipping: charging "free shipping" by rolling it into the item price. That actually increases your transaction fee (because the 6.5% applies to the higher item price), and you don't save anything on processing.
How to fix it
- Charge shipping separately. It still gets the 6.5% transaction fee, but the buyer's perception of the price stays lower, which lifts conversion.
- Test opting out of Off-Site Ads while you're still under $10,000 in trailing 12-month revenue. Many POD shops find that organic Etsy search drives more orders than the OSA fee is worth.
- Negotiate supplier rates if you're moving meaningful volume. A $1 reduction in fulfillment cost passes through directly to net profit.
- Raise prices in $2 increments. POD t-shirt buyers are not as price-sensitive as the dashboard suggests; testing matters.
POD operators with multiple product lines should also model POD mugs — the margin profile is similar but the unit economics shift.