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Looking Ahead to 2010 (Shirts)

Looking Ahead to 2010 (Shirts)


Nov 16, 2009 / By: Michael Spielman
Category: Ministry Updates

Last Thursday, I joined Brodie McClain and Larry Lucas for our year-end board meeting. Our primary focus was to come up with an action plan for 2010 that would help ensure Abort73's financial viability after a rather difficult economic year. After much prayer and deliberation, we arrived at a number of critical decisions which I believe will help us be better stewards of all God has blessed us with. All of those decisions will be disclosed in the weeks to come. For now, I want to highlight the portion of our summary document that deals with T-shirt sales:   

When it comes to Abort73 T-shirts, volume has always been our primary objective. Making money was never the issue. We wanted to get as many T-shirts out the door as possible – by selling them at an absolute bare minimum and often selling them at a loss. Four years later, it has become apparent that our T-shirt model must now evolve. Though sales have increased dramatically each year, our bottom line has not. As a result, our expectation for 2010 is to sell less shirts but to more carefully price them – ensuring that they become self-sustaining and do not continue to hamstring our broader ministry operations by consuming so much of our cash reserve. We will carry fewer quantities of each shirt, which will increase the per-shirt production cost shirt but will significantly limit the amount of cash tied up in inventory. We will cap our on-hand inventory at 2,000 shirts, so that at any given time, we will not have more than 2,000 shirts in stock (currently we have more than 4,300 shirts in stock). We accept the fact that certain designs may be sold out for extended periods of time.

For 2009, we have sold an average of 861 shirts per month on the website. Our 2010 target will be 800 shirts a month. The price structure will be set so as to make $4 for every shirt ordered. For now, we’ll assume that we can sell 80% of our shirts at full price. The other 20% may have to be sold at cost or given away. That means if we order 100 shirts, our $400 net profit will actually be tied to just eighty shirts. If 100 shirts cost us $6 each, then selling 80 shirts at $12.50 would yield a $4 net profit for each shirt ordered. If we can sell all the shirts at full price, all the better, but we’ll price them so that our profit margin is only dependent upon selling 80% of the shirts ordered. In order to maintain a fixed T-shirt price across our line, the price will be determined based on the cost of our most expensive shirts to produce. Where comparable colors are available, we may substitute Tultex shirts for American Apparel – as a means of keeping the per shirt price down. At this point, $12 - $14 is the likely T-shirt price for 2010. Selling 9,600 shirts for the year, with a net profit of $4 per shirt, would yield $38,400. Roughly $6,000 will go to pay for a new quarter-time position to oversee all aspects of sales and order fulfillment. The balance will be invested towards the purchase of more shirts and towards advertising on Facebook or in print.

Selling 800 shirts a month at $12 yields $9600. Of that...

$500 will go to salary
$450 will go to credit card fees
$300 will go to shipping supplies (bags, brochures, labels, ink)
$5600 will go to replace shirts sold
$1750 will go to advertising
$1000 will go back into general ministry fund

Our goal will be to introduce a new design every 2 months – to keep the product line fresh and keep people coming back.

We will keep an eye on the viability of this model over the next two years, with an eye towards the possible elimination of shirt sales altogether if it continues to disproportionately consume resources.

Michael Spielman is the founder and director of Abort73.com. Subscribe to Michael's Substack for his latest articles and recordings. His book, Love the Least (A Lot), is available as a free download. Abort73 is part of Loxafamosity Ministries, a 501c3, Christian education corporation. If you have been helped by the information available at Abort73.com, please consider making a donation.

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