What Should You Charge For Your Embroidery?

All new embroiders struggle with what a reasonable price is to charge for their embroidery once they start selling their work. Pricing for custom made items, like embroidery always presents a challenge to the creator. Knowing what to charge customers for custom embroidery work is one of the skills you need to establish when starting a business to sell embroidery. Pricing is not difficult and once your figure out your costs and develop a pricing formula, you will want to stick to it so your prices are consistent from job to job.

Identify Your Costs

If you don't have a handle on what your embroidery costs, you can't effectively price it and know if you are making a profit or losing money. Some of the things to consider in the total cost or your embroidery are direct costs, such as: Design or Digitizing cost, Top & Bobbin thread, Stabilizer, Blanks (what your are embroidering on if you provided it), Labor costs (your time is worth something), and packaging costs (bags and boxes). You also need to include indirect and overhead costs, such as: marketing, website, rent, listing fees, utilities and other indirect business expenses. If you have difficulty calculating these, your accountant should be able to help.

Know Your Value

Know the value of your time. If you value your labor at $25/hour you need to start timing your embroidery jobs to see how long they take for you can figure your labor costs. For a 15 min job you would need to charge about $6.25 in labor costs.

Identify Your Profit Margins

I figured out my costs, now what do I sell my embroidery for? A simple way is to take your total costs and figure out what you want your margin to be?

• If you want to make a 50% profit margin, take your total costs and divide by .5
• If you would like a 60% margin, take total costs / .4 to get your selling price

Find Your Cost Per Stitch

Another way to price your embroidery that may be more simple is to figure out your cost per stitch on a few jobs and find your average cost per stitch. You can then mark that up and present customers with a price per stitch that you can apply to any job. Don't forget to add in the cost of the item you are embroidering to the per stitch price if you are providing it.

Setup Costs

What about embroidery set up costs? A lot of embroidery time is consumed with set up: digitizing, hooping, changing thread colors. All of this should be part of your cost equation. Many embroiderers will charge a flat set up fee that covers all of these costs.

The Market & Competition

The last thing to take into account is your market and competitors. If you have figure out a selling price that gives you a fair profit but the market won't bear it, they you will need to find a lower cost way to do it, lower your profit margins, or find a different product you can make a fair profit on. Same thing goes with a competitor selling a lower price. Sometimes you just can't compete because your competitor doesn't know all their costs and is selling their products too low. Let them lose money and find a product they don't sell or differentiate yourself in a way that separates your form them.

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