Pricing Embroidery Work
If you are just starting out in an embroidery craft business, one of the hardest things to come up with is how you will price your embroidery work and designs. There are many questions you need to ask yourself when it comes to what you will charge to your customers.
A few things to consider
- Charging too low won’t make you any money.
- Charging too high, won’t give you any business pricing yourself out of the market.
- And, forgetting to add in the cost of your time is doing the work all for free.
When it comes to pricing there is the fear of not making a profit. I totally get it, it’s hard and awkward when you first set out to ask someone for money, for the work you did and the time you put in it. Especially if you aren’t used to running a business. Asking someone to pay a price for something that maybe started out as a hobby might seem strange.
Trust me though, in time, this will no longer be a worry, and it will come naturally to simply just state the price.
There are two ways I approach pricing when it comes to pricing the embroidery work that I do for others.
Cost per Stitches: If you are just starting out and are not sure of what to charge, the easiest way is to use the Cost per Stitches method. Basically, charging $1 per 1,000 stitches in an embroidery design or artwork. You can simply look up how many stitches are in your overall design, for example, say it 9,870 stitches, and then round it up to 10,000 X $1 = $10.
Most people are satisfied with this approach when first starting out becomes it seems reasonably fair. And you are making a little extra money to take your craft to the next level and continue your craft habits.
This is all fine and dandy, especially if something has on average around 15,000 stitches, you would make $15.
But what if something has only 3,000 stitches? Certainly charging $3 is a great price for the customer, but at that price for you, this barely covers the cost of stabilizer in the hoop, the thread used, and wear and tear on the machine. Plus, how long did that 3,000 stitches take you to create from start to finish?
When you think of all of these factors, $3 is hardly worth it.
The Cost per Stitches method is great to use if you are not in business. However, I recommend having a base price for any item up to a 10,000 stitches threshold – say $10 and then once the customer meets a threshold, you apply the cost by stitches method to determine the additional amount above the threshold to charge.
Cost Analysis Method
The second method is a Cost Analysis method. This method is a little more in-depth. It factors your time, your machine use, electricity, and internet usage design costs, and more.
There are several pricing embroidery work cost calculators on the web. You can run a google search to help you determine this cost analysis method to make your embroidery business more profitable.
You may discover your cost per 1,000 stitches is more along with $1.25 per 1,000. This all depends on the time you spend and overall hours per week working on your business. When you make the switch from hobby to business, you’ll definitely want to consider all of these things when determining your price.
Set Pricing Embroidery Work
You may decide to not use the cost per stitches method or cost analysis method. I understand that one seems almost too low and the other seems almost too difficult to calculate.
You may find this is the case and you may want to do set pricing. This would be a set price for a certain type of work you do on any one customer item.
For instance, for all names (up to 8-10 characters) you may charge $10. And you may also set the design to be no larger than a certain set of inches or that the stitch area is no larger than 4 inches tall by 5 inches wide. I’d do this within reason.
If you put a name on a bag that is only 7 letters long, and the entire name only takes up about 5 inches wide and 2 inches high, you are likely to still be less than 10,000 stitches overall.
Stay with me here… If you take the cost per stitch method into consideration, that name on the bag may on be at around only 3,000 stitches. Therefore you are making money on a 3-5 minute stitch-out time.
At the cost per stitch that is $3, but your set price of $10 makes stitching that name worth it. And that could be easier done at around a total of 10 minutes of time, (depending on your skill) to enter the name in your software, send it to your machine, and then stitch it out.
So if you do three names on three bags in an hour’s time, that puts you at making approximately around $30 per hour before you subtract expenses. Not too bad.
If you get faster, your rate of pay goes up by the hour, and hopefully your workload or customers’ increases.
Now all of sudden you are profitable and set up to run a sustainable embroidery business.
For applique items or shirt designs that require more time to stitch, more stitches, and thread changes, the fabric you supply, you could set a base price for those specific items, then add on set pricing fees for an additional thread change, hooping, custom name addition, etc.
Pricing to Competition
Choosing to set the pricing and evaluate along with the cost per 1,000 I think you will find that you are in range with your competitors and those in the market.
However, it is possible to notice a local competitor changes their price every time you yours. My advice on this is to just ignore it. Even if a customer brings it to your attention. I’m speaking from experience here, and a couple of things will happen. First, they will price themselves out of business, or two they raise their back to match yours.
Focus on your business, and not theirs. If you are $1-$2 more than them, so what. Your customer service, delivery time, or overall business practices may outweigh theirs and justify your cost. Also, don’t be that kind of competitor. I believe there is enough work and business for everyone. So focus on yours first.
And, if they are always watching your business and what you do, chances are they aren’t really paying attention to their own, and they are likely to pay for that in one way or another.
When it comes to pricing embroidery work, the best advice I can give is to make sure it is profitable from the start. And if you aren’t, get there. Start a new pricing embroidery work system for the next month or year to roll on the new pricing with customers effective a certain date.
Always always always have great customer service. My favorite thing is to UNDER promise and OVER deliver.
Meaning, never promise something faster than you think you can do it, and in fact, give yourself extra time for mistakes or delays (UNDER promise) and always surprise or excite your customer (OVER deliver).
If you deliver something earlier than you said you would, this gets them excited. They appreciate your work even more, and will more than likely return to your business, and in the end, your customer service and product quality will always be worth any price you set.
Do you have any tips or methods for pricing embroidery work in your business?