What should I charge for my embroidery?
When you're running your own embroidery or digitizing business you may be doing an array of jobs with varying levels of difficulty. So how do you come up with a price for your embroidery? In this article we'll look at all the factors to consider when charging your customers.
What should influence my quote?
Everyone has different circumstances and like any business decision, you need to consider your own needs as well as the prevailing industry prices. Ask yourself:
- Do I have any competitors near by?
- What are their basic charges?
- Is the job urgent?
- How quickly can I do the job?
- How big is the job?
- If a large job, is it practical for me to do or should I outsource it?
- Is it a job I have had little experience with (potentially difficult) or is it a simple job?
- Am I supplying the garments or items to be embroidered? Or is the customer? Are they of reasonable quality?
- Will I be digitizing the designs or will the customer provide them?
- Do I need to have artwork digitized elsewhere (outsourced)?
- Am I likely to get ongoing work from this customer?
There are quite a few variables to consider but with experience you'll learn to assess the above in a matter of moments when quoting.
Why will customer's choose my service?
There are multiple factors that might influence a customer to accept or reject your quotation. These usually have nothing to do with the job at hand or your ability to complete it. Ask yourself:
- Does the customer like me? (Sometimes people just don't gel together!)
- When I invite customers into my sewing/embroidery room, what is their first impression?
- Does my work environment look organized?
- Has a competitor quoted lower than I'm prepared to go?
- Am I quoting too low?
Don't take on work simply because it's there. It must be profitable for you to do it. Of course if this continually happens then you may need to review your charges.
What should I charge?
Quoting based on stitch count
A very common way to price your embroidery is to use the stitch-count of the design to be embroidered. Charging a price for every 1,000 stitches can give you a scalable starting point. Typically the cost per 1,000 stitches can vary from as little as 50 cents to $4.00 depending on the size of the design, the number of colour changes and the number of garments to be embroidered. Usually as the number or size of the stitch count increases the cost per 1,000 stitches goes down.
Quoting based on time
Another option is to consider the actual hours involved in the job at hand. With this method, you simply need to set an hourly rate that meets your requirements. This figure should include a portion to help cover your overheads as well as the hourly profit you wish to make. Both methods can be rather unbalanced sometimes. For example, using an hourly rate on jobs with a high stitch count really takes less time for you. The machine continues to stitch while you are free to attend to other tasks.
By contrast, charging by stitch count for small embroidery designs on garments that are problematic to hoop can work against you. Having said that I still prefer to use the stitch count method but I base it on a sliding scale as shown in the table on the following page.
Factoring in your equipment
Remember, the investment in your embroidery equipment is a cost and should be factored into your quotes regardless of what method of quoting you choose. If you are considering a serious home-based business then we do recommend consulting with your accountant to ensure you don't miss out on many of the tax benefits you can legitimately claim. Your accountant will in most cases be able to help you establish a true picture of your business overheads.
Of course, the greatest thing about a home-based embroidery business is that the overheads are incredibly low with little to no rent and in most cases no other wages to pay. Remember, this is your advantage and gives you the ability to have a competitive yet very profitable embroidery business.
Running a successful home-based embroidery business with one or more home embroidery machines is simply hard work. The limitations and the lack of efficiency will almost certainly make you lose interest and possibly money. Sadly, we have seen many people give up on their home-based embroidery business because they were led to believe it could be easily done on a home embroidery machine. On the bright side however, we have helped hundreds of home embroiderers around Australia move up to a Brother PR multi-needle machine. Many are now earning a nice income while doing the embroidery they love!
A practical example
Betty has asked you to embroider 5 polo shirts for her son’s new painting business. She has provided a simple logo (easily created in design software) including text that is arced around the logo. It takes you about 30 minutes to digitize the logo and test sew the design (yes, test sew). The completed design has 6,000 stitches and 5 colour changes in total.
Ordinarily, you could charge a fixed setup fee for the design of around $50. In this example we'll focus on the quoting methods you can use to charge Betty for the variable costs.
Assessing the job
A job like this may require about one hour of machine time on a multi-needle machine. It's easy to determine by doing the math. On a Brother PR machine, at an average machine speed of 700 spm (stitches per minute), the stitching time per shirt will be about 9 minutes. This means 5 shirts will take technically about 45 minutes. Factor in the colour set up on the machine. The initial hooping of the first shirt. The removal, inspection, folding and repackaging and you could well expect the job to take about 1 hour to complete. Remember, once the first shirt is stitching you can commence hooping the second shirt. There is no need to babysit the machine, as you will not need to change the thread colours because the machine does it automatically.
Charging by the hour
Obviously if there is 1 hour of work involved you will likely charge for 1 hour of labour. Your hourly rate is up to you to determine and it can certainly be influenced by what your customers are prepared to pay and that can vary from area to area. Factoring in your overheads and consumables, I would think that an hourly rate of $40 to $50 would be a minimum to aim for.
If you charged $50, Betty has paid $10 per shirt, which is within reason.
Typical charging rates
If we calculate the cost per 1,000 stitches in the above scenario we can see it's $1.66 per 1,000 stitches. This is within the usual range of charges.
Let's compare this to our guide to charges, in the table below and see how it stacks up. The following table is a general guide only and you may need to adjust it according to your specific circumstances.
|No. of garments||1,000–2,000 stitches||2,000–5,000 stitches||5,000–10,000 stitches||10,001+ stitches|
Examples of typical quotes
5 Shirts @ 6,000 stitches = $12 per shirt for a total of $60
Total stitching time on a PR650 at 700spm (average) would be approximately 45 minutes.
This equals an hourly rate of $80.
This is far more than we calculated using the hourly rate but we have only shown the actual stitching time and not the colour setup and other miscellaneous factors which would bring it back to about $60 per hour.
The benefit of using the sliding scale is that it is tangible and easy for a customer to understand and accept. It makes it easier for you to have consistency in quoting and you will notice with the following examples that the hourly rate remains relatively constant.
15 Caps @ 3,500 stitches (3.5 x $2.00) = $7.00 per cap for a total of $105.
Total stitching time on a PR650 at 600spm would be approximately 105 minutes.
(1.75 hours) This equals an hourly rate of $60.
8 jacket backs @ 23,000 stitches (23 x $1.50) = $34.50 per jacket for a total of $276
Total stitching time on a PR650 @ 700 spm (average) would be approximately 263 minutes.
(4.4 hours) This equals an hourly rate of $61.
Jenny's urgent order
25 Promo bags @ 9,400 stitches (9.4 x $1.25) = $11.75 per bag for a total of $293.75
Total stitching time on a PR650 @ 700 spm (average) would be approximately 336 minutes
(5.6 hours) This equals an hourly rate of $52.
These are just some examples of basic charges and do not include the profit you might reasonably expect to make on set up fees or the sales of apparel, caps and bags. The strength of a home-based embroidery business is in its ability to provide quick turnaround and specialize in small runs. Larger embroidery businesses will almost always be more competitive on large orders because they typically have what we call multi-head machines. For example a 12-head embroidery machine can stitch 12 identical embroidery designs at once. This would take you at least 12 times longer in actual stitching time.