How much profit can you actually make selling print on demand products? I’ve seen or received that question dozens of times over the last couple years since I started my print on demand Etsy business. Another question that I’ve gotten several times on the POD Insights YouTube channel is how to set up your finances as a print on demand seller and whether you need business accounts. In this episode we’re going to start with the basics of profit for selling print on demand, and then we’ll talk about business accounts that can help you keep your business finances separate from your personal finances, and even help add to your bottom line. 

POD Profits for Etsy 

We’re going to start with a walk-thru of how you profit by selling print on demand products. Specifically we’re going to talk about profits for selling either on a marketplace like Etsy or Amazon seller central and through your own website. Print on demand also includes marketplaces and programs like Redbubble and Amazon Merch on Demand, but those do not involve running the whole business. They pay you royalties or commission when your designs sell, so everything you receive is profit and income that you have to report in your taxes, whether you count it as business income or personal income. The difference with selling on Etsy, Amazon Seller Central, or your own website is that what you receive is revenue, not profit. All that means is that your business expenses need to be subtracted or deducted from what you receive in order to calculate your profit. And in terms of expenses, the most direct expense you have as a print on demand seller is the fulfillment cost of each order you receive, and any fees that you pay to the platform for each order. 

No matter which platform you sell on, when someone buys a product from you, you receive the funds from the platform, minus fees. The fees you pay on each order will vary by platform, with selling on your own site using a service like Shopify generally having the lowest fees per order when compared to Etsy and Amazon Seller Central. I focus on Etsy most because that is where I’m most experienced. When you make a sale on Etsy, they will deduct fees based on the amount of the sale as both a general transaction fee as well as a payment processing fee, and they will charge a listing fee to relist your product. The transaction fee is 6.5%, the payment processing fee varies by country but it’s 3.0% plus $0.25 per order, and the listing fee is $0.20. So for example, if you sell a t-shirt for $22, the total Etsy fees you will pay will be $2.54. Etsy automatically deducts these fees and the remaining revenue of $19.46 is placed in your Etsy seller account until the next payout to your bank account. A similar process occurs on other selling platforms, where you receive your revenue minus fees from your orders. 

But of course you also have to get those orders fulfilled quickly, and when you have a print on demand partner like Printify or Printful, you have to pay the cost to fulfill the order as soon as it’s placed. Fulfillment cost consists of the product cost and shipping cost, and sometimes tax is also charged. That’s a whole other conversation, but if you’re a seller in the United States you can file generic sales tax exemptions that will apply to multiple states so that you’re not paying sales tax on your orders. Let’s continue with the same example and keep it simple. You sold a t-shirt on Etsy for $22 and have $19.46 remaining after Etsy fees. The fulfillment cost for the order is $9.00 plus $4.00 shipping or $13 total. This will leave you with a final profit of $6.46 or 29%. This is a good target profit margin for a product like a t-shirt. Certain products will allow higher profit margins in the 30-40% range, while others like generic t-shirts may go as low as 25%. If you sell a range of products, it should average out to around 30%, not accounting for overhead expenses like paying for a subscription to a keyword research tool or graphic editing software. 

Based on a profit before overhead of 30%, that means if you do $100,000 in total sales revenue, you can expect to end up with a profit of about $30,000. Depending on what you might be expecting and how experienced in print on demand selling you are at the moment, that may sound high or low to you. Print on Demand is not a get rich quick scheme. It’s a business model that has long-term profit potential but does not have sky-high profit margins. It takes volume and time to build the business into a significant source of income.

Why Business Banking

First, let me address the business structure question because that is also a separate conversation. I can’t tell you whether running your business as a sole proprietor or starting an LLC is the right choice for you. I can, however, tell you that you don’t need to have a formal business entity in order to have business financial accounts such as a business checking account or credit card. In fact, I would argue these accounts are an essential part of running your business, and I would go as far as to say that, in the US at least, they are easy to establish. I don’t mean to say it’s difficult outside of the US, I just don’t personally know because I only have experience opening business accounts in the US. 

To run your print on demand business, you’re going to need a checking account and a credit or debit card. While print on demand does not require significant up-front costs to start your business, you do need to have accounts that allow your cash flow to work. You need a place for order revenue to go and that’s where the checking account comes in. And you need a way to pay for order fulfillment costs, and that’s where a credit or debit card comes in. Some platforms like Printify also allow you to upload funds to your account using PayPal, so you can add funds to use for order fulfillment cost if you’d rather not use a credit or debit card. However if you do that, you’ll be missing out on some benefits of using a credit card that offers rewards. 

Speaking of rewards – there are two main benefits to having business accounts. The biggest benefit is the separation of your personal and business finances. When you file your taxes, you will need to repot the revenue and expenses from your business in order to determine the taxable income. It’s much easier to keep track of both if the transactions are in separate accounts from all your personal finances. And if you ever have to provide proof of anything, you can obtain the necessary transaction records much more easily if they are separate. 

The second benefit is the rewards you can earn – both for your cash balance in the form of interest in a business checking account, and in the form of credit card rewards. Online business checking accounts offer some nice interest yields depending on which one you choose, but it’s possible to earn 1-2% interest on the balance in your checking account. This is free money – you need a place to keep the revenue from your business while it’s waiting to pay for things like order fulfillment cost or be withdrawn to your personal bank account as income. A business checking account gives you that place to keep your business revenue separate while also paying you interest on the growing balance. Each month your balance will grow because you are paying out less than you’re taking in. How much will depend on your profit margins, but that balance will grow until you withdraw some of it to your personal account, and in the meantime it can earn you some additional income from interest. Business credit cards can also offer some significant rewards because businesses, even a one-person print on demand business, can have high expenses – in many cases, higher than what you will spend on personal credit cards. But again, this is spending you are going to do no matter what payment method you use, so you might as well earn rewards. We’ll talk more in a second about this but just a quick example – if you use a credit card that pays 2.0% cashback on all purchases for $1,000 in order fulfillment expenses, you will receive $20 cash back. By using that card to pay an expense you had to pay no matter what, you added $20 to your bottom line. I’ll talk more about the scale of this when we cover credit cards in depth in just a moment, but you get the point. 

So those are the main reasons to get yourself set up with business banking accounts. One thing that’s important for you to do is compare what’s available. Interest rates and signup bonuses change frequently, so comparing what is out there at the time that you are interested in opening accounts is a must. There are websites that provide comparisons as well to help save you time in your research. Sites like NerdWallet and WalletHub all have articles that compare business checking accounts and business credit cards and even let you filter results based on features you’re looking for. I recommend checking them out and of course I will link to them in the blogpost for this episode. Now let’s talk a bit more about checking and credit cards, and I’ll also mention a couple of each that I recommend for consideration. 

Business Checking

Before we dig into more about the products that I’ve used and what I recommend, I have three things that I want to mention. First, I want to be super-clear that I’m not a financial advisor or accountant and you definitely should do your own research. The products I’m mentioning are not the only options and they may not be perfect for everyone. I also want to mention that I will include links to the products I recommend in the blogpost for this episode – check the episode description for a link. I have a referral link for some of the products and if I do, I will include both my referral link and a regular public link so you can see if there is a difference between the referral sign up bonus offer and the public one. Sometimes the referral offer is better and sometimes it’s not, so it’s worth checking both if you’re interested to see which is the best deal. And lastly I want to mention again that I only have experience in the US and I don’t know about specific types of accounts that are available outside the US. Ok with that disclaimer out of the way, let’s talk about business checking. 

In my opinion, business checking accounts with the traditional “big banks” like Capital One and Chase are not currently the best option for a print on demand business, especially new ones. Of course, these banks have the benefit of having physical locations where you can go talk to someone or use their ATM and make deposits or withdrawals in person. However, none of that is really necessary in a print on demand business where we are doing everything online. In addition, the business checking accounts with these banks generally have monthly maintenance fees unless you meet certain requirements, and the requirements can be hard to meet for a new business. For example, as of January 2023, the lowest tier of Chase business checking account called “Chase Business Complete Banking” costs $15 per month unless you have a $2,000 minimum daily balance or have $2,000 in net monthly purchases on a Chase Ink business credit card, or $2,000 in deposits from Chase payment solutions, or link a Chase private client checking account. The only requirement I could see meeting early on might be if you also got a Chase Ink business credit card and used it to pay all your expenses each month, which can exceed $2,000 relatively early on but not when you first start your business. Oh, and there’s also the issue of interest…Chase doesn’t pay any interest on their business checking accounts at all. Now this is just one example but most of the larger national banks have similar issues and I don’t recommend them for starting a new business with very little capital like a print on demand online business. 

Thankfully, as I mentioned there really is no need to have in-person banking for your online business. Online business checking accounts provide everything that you will need to receive and transfer funds, they offer zero fees or they have lower requirements to waive fees, and they can also pay interest on your monthly balance – all good things for a new business with little existing capital. I have two recommendations for you to check out and I have accounts with both of them. 

American Express business checking is my first recommendation and it’s my current favorite business checking account. It’s a great option especially if you’re already an AMEX customer of their personal or business credit cards, or if you’d like to get one of their business credit cards – one of which is also a recommendation of mine but more on that later. The AMEX business checking account was very easy to open, and there are zero monthly maintenance fees and no minimum balance, so you don’t have to worry about fees or keeping a certain amount in the account. It also pays interest, currently 1.3% APY on balances up to $500k but of course that can change pretty quickly so definitely compare current rates. Another interesting feature is that you can redeem AMEX Membership Rewards points into your checking account at a rate of $0.01 per point, which is a higher redemption rate than if you used your points as a statement credit, so it also gives you another option for redeeming points if you have a card that earns them. My Etsy earnings are deposited weekly into my AMEX account, and I then use the account to make payments on my business credit cards, and when I’m ready to remove some of the balance as personal income, it’s very simple to transfer funds out to my personal accounts. I can see my business checking account in my online account with my other AMEX accounts, but they also have a dedicated AMEX business mobile app as well and I use that to check for deposits and set up transfers. All in all, I’m really happy with it because it provides exactly what this type of business needs. 

The second business checking account I would recommend taking a look at is BlueVine. They offer an online business checking account that offers zero monthly fees and no minimum balance. It also pays a higher rate of interest, currently 2.0%, but there are monthly account activities you have to meet in order to get the interest. The requirements to each interest each month are to either spend $500 using your BlueVine debit card or receive at least $2,500 in deposits into the account each month (cash deposits don’t count but ACH deposits from Etsy will count). For reference, if you would have to do about $2,800 in sales to actually get a payout of $2,500 after Etsy fees, and if you sell a t-shirt for $20 that would be 140 orders per month. Of course, if you sell more expensive products like sweatshirts for say $34 each, that would only be 83 orders per month. If you sell a mix of products, it will be someone in between. Of course if you sell very low-priced items exclusively like stickers then your monthly order volume will need to be much higher to get to a $2,500 payout. For example if you sell stickers for an average price of $7 then you would need 400 orders per month to receive a $2,500 payout. But anyway – the point is that it’s not a totally unreasonable requirement to get $2,500 in monthly deposits and earn the interest with BlueVine, but if you’re just starting out, it could be a while before you earn interest and that’s why I think the AMEX checking account is the best option for a new business. If you already have at least $2,500 in monthly payouts, then BlueVine will currently pay you a higher interest rate and it offers all the same simple features including easy transfers and a mobile app. 

Those are my two recommendations for a business checking account, now let’s talk about business credit cards. 

Business Credit Cards

There’s a saying on Wall Street that there’s “no such thing as a free lunch” meaning something is always expected of you if you receive something for free, even if it’s not monetary. However I personally think that credit card cashback is the closest thing to free money that exists. I’ve already said it but you can earn money back just for paying expenses that you’re going to pay no matter what, without any annual fees. To me that’s free money. 

The key to a business credit card, or any credit card, for that matter, is that you should not use it to pay for more than what you expect to receive in revenue for the next 30 days. Basically, don’t over-extend yourself by making purchases before you have the funds. If you only use your business credit card for order fulfillment expenses and a few overhead expenses like a subscription for a keyword research tool or source of graphics, then you will be fine. The great thing about order fulfillment expenses is that you’ve actually already received the revenue for the order, it’s just going into your checking account and waiting to pay your monthly credit card bill…not to mention earning you interest in the meantime if you take advantage of an interest-bearing checking account. At the same time, you can earn cashback on the purchases from your credit card. A secondary benefit of a business credit card is that most banks who issue business credit cards do not report the account information to personal credit bureaus – at least in the US. That means that your spending on the business credit card won’t impact your personal credit score. Of course, you are personally liable to pay the balance on the card just the same as your personal accounts, but it’s still a benefit to keep it separated. Let’s talk about a few options that I recommend for a business credit card. 

My first recommendation is the first business credit card that I got, the American Express Blue business cashback card. It offers 2.0% cashback on all purchases for the first $50,000 each year, and 1% after that. Cashback cards that have a flat rewards percentage for all spending are a good fit for print on demand order fulfillment, because that is our highest expense and it does not fit into any specific credit card categories that have a higher available cashback rate on any card available in the US that I could find. The AMEX blue card has no annual fee, however it does have a foreign transaction fee so if you make international purchases it may not be the best option for you. However I want to point out that if you pay for order fulfillment with print providers in other countries, that is not considered a foreign transaction because you’re paying the print on demand platform, not the specific print provider. For example, I’m located in the US and I use Printify to have orders fulfilled by print providers in Canada, the UK, and Australia every month, but they all come through as domestic charges from Printify on my credit card, so at least you don’t have to worry about that. However if you have an individual print provider located in another country and you directly pay them outside of a platform like Printify, that could be a foreign transaction. For example I use the print provider Duplium through Printify for some of my Canada orders. Because the charge is coming from Printify, it’s not a foreign transaction. However if I were to submit orders directly to Duplium outside of Printify, the charge would come from Duplium which is a business based in Canada, and that would be a foreign transaction. The limitation of 2.0% cashback to $50,000 in spend each year should not be an issue for most new print on demand businesses, but if you’re an established seller with higher than $50,000 in annual spend, there are other options that are likely a better fit. Don’t think you’ll get to $50k in spend? Well, let’s think about that. If you sell 100 t-shirts per month with an average order cost of $13, you will spend $15,600 per year. But if you also sell products like sweatshirts and hoodies that cost more, your monthly spend can increase significantly. For example only 50 sweatshirt orders per month will cost about $1,100 in fulfillment cost with Printify Premium pricing and one of the lowest cost print providers available. You also have to factor in that sales and order fulfillment expenses can be exponentially higher in Q4 during the holidays. For example I’ve spent over $5k in order fulfillment in just one month in Q4. But if your business is new you should be able to get a few years of use out of this card before hitting the $50k spend limit. Just to finish the example – if you did spend around $15k for the year in order fulfillment expenses, that would provide you with $300 in cash back using this card. That’s $300 you would not have if you used your cash funds to pay for order fulfillment. Printify Premium costs $300 per year, so your cash back could pay for something that also helps your business. 

My second option is a new one that I believe only became available in the last two years, and that’s the PayPal business cashback Mastercard. This card is available directly from PayPal and you need to have a PayPal business account, which is easy to create. This card offers 2.0% flat cashback on all purchases, but there is no spend limit. You can earn 2.0% on unlimited purchases each year, which makes it a terrific option for established businesses spending higher amounts per year, or if you want to have a card that you know won’t be limited as your business grows. There is no annual fee, but it does also have a foreign transaction fee if that matters to you. But again, I think this is a great no-annual-fee option for print on demand sellers that provides a simple cash rewards structure. Your cash rewards can be redeemed into your PayPal account and then either transferred out or used as a payment on the credit card. 

Another option out there if you learn towards Chase credit cards is the Chase Ink unlimited cashback card. This one offers a flat 1.5% cashback on unlimited purchases, so it does not have a spend limit for cashback but the rate is a half point less than my first two recommendations. But if you already have Chase accounts and would like to keep your business accounts with Chase as well, this is good option. Chase also has Ink business cards that offer higher rewards on specific categories, however they don’t have any specific categories that would apply to order fulfillment expenses, which is our highest expense. 

Lastly let’s talk about a couple options with CapitalOne. CapitalOne offers the Spark business cashback cards, and the main benefit they offer that my other recommendations don’t is that there is no foreign transaction fee. However there are some other differences to be aware of as well. The Spark Cash Plus card offers unlimited 2% cash back on all purchases, however there is a $150 annual fee and it is a charge card, not a credit card. This means that you have no preset spending limit, but you must pay the balance in full each month. CapitalOne also offers a Spark Cash Select card which offers 1.5% unlimited cash back with no annual fee, no foreign transaction fee, and it functions as a regular credit card. However, you actually don’t have to spend a huge amount per year for the 2.0% cashback of the Spark Cash Plus card to be a better value, even with the annual fee. The break even point is $30k, so if you spend over $30k per year the Plus card with 2.0% cashback will actually give you a higher reward even after factoring in the $150 annual fee. However, the reward is no better than the PayPal business cashback Mastercard which has zero annual fee, so that one is a better value than the Spark Plus card unless you need a card with no foreign transaction fee. 

Those are all my recommendations for business credit cards that provide cash rewards on your expenses, but they’re by no means the only options out there so I want to again reiterate the importance of doing some research of your own. Once you do make a decision, in my experience the application process for a business credit card will be fairly easy. There are a couple things to be aware of though. If you’re a sole proprietor and you don’t have a tax ID number for your business, then you will use your personal social security number on the application. This however is the only impact the account will have on your credit because most banks do not report business credit card accounts to personal credit bureaus. So there will be an inquiry on your credit file but no new account or balance information will be reported. You will still use your business name on the account in addition to your personal name. Additionally, there will be a couple of questions about the type of business you are running and your annual revenue. On my applications I have indicated that I am a retail clothing business. Some banks have more specific categories that fit our business better, but most do not so retail clothing or apparel is close enough. For annual revenue it is fine to use an estimate and it doesn’t have to be a high number. On my first business credit card application I estimated $15,000 in annual revenue. Remember that’s not profit, just total sales revenue and at that point in time I had a couple months of $1,000 in total sales so I just took an educated guess. Some banks allow you to update these estimates later on in order to consider you for credit limit increases. Other than those couple of things, applying is just as simple as applying for a personal card and most banks give you an immediate answer. 

Conclusion

I hope you found some helpful information in this review of profit and business banking for print on demand. Don’t forget to subscribe on your favorite platform and head over to podinsights.net to check out links to resources. And visit me on YouTube on the POD Insights channel and on Twitter for video guides, selling tips and product reviews. Also a quick reminder if you want to submit a question to be included on an upcoming episode, use the contact me form on the bottom of the homepage on podinsights.net or post your question in a comment on YouTube. 

Thanks for listening.