You have sunk your heels deep into the world of embroidery!
Were you one of those shops that thought, "heck we are already screen printing, why not start an embroidery department?"
Or you might be an established embroider and you are looking to take your business to the next level.
Whether you have a single head machine or are running an entire fleet of embroidery machines you have chosen to tackle one of the finest decoration methods in the world of decorating.
You might be scratching your head at night about digitizing and sew outs, having nightmares of that 30,000 stitch run that had a zillion thread breaks. It is important to talk dollars and cents when it comes to embroidery.
Let's talk about pricing.
First and foremost, as a disclaimer, this article will not give you the exact price guide you should charge for embroidery. Rather, it will outline a few key factors that should go into making your price.
You will need to do some basic calculations to ensure that you are constantly making money when your machines are running. This is calculated by figuring your overhead and labor costs divided by the time you are operating.
If you are in contract embroidery, you might already have rules in place and price sheets you follow. There may be a few takeaways for you as well.
Your automatic press that can print 400 shirts an hour does not exist in the world of embroidery. It is a slower process, it requires an immense amount of detail, focus, and precision. You can give massive price breaks for volume in screen printing, embroidery is different. There is a lot more manual labor involved beyond loading and unloading a shirt.
Say have 12 heads of embroidery. They can only run so fast. You'd be lucky to get 50 pieces done an hour for an average of 5,000 stitches.
Since every garment has to be hooped, loaded, and sewn, there should be fewer price breaks on quantity.
While some shops may give an approximate price for embroidery based on stitches, you should also take into account the complexity of the job and how much work needed to successfully embroider it.
Consider how often your machines will have to stop to cut thread and change color. Or how many threads you'll have to trim after, if your machinery is not equipped to do so.
Or how hard a garment or item is going to be to hoop. Hats might be harder than flats, jackets or bags.
Or what special backing you will need to use.
Or how many sew outs you'll need to do.
Or how many times you might need to re-digitize a job... :/
Unfortunately, there is no price calculator for these little details that hiccup jobs along the way, but your salespeople should be conscious of them when taking a job.
If you took a cross-section of the cost of goods sold in embroidery vs screen printing, you can confidently say that raw goods to be embroidered on are generally more expensive than screen printing goods.
You are sewing on high-end jackets, caps, bags. Maybe even doing split front tackle twill! In screen printing, you can mess up one shirt and quickly replace it, but if you are contracting work, and you damage a few of those North Face Jackets, there goes your profit.
Since your COGS are going to be more expensive, you should be charging more to account for handling them.
Customers understand that embroidery is delicate, and more often than not they are so impressed by your work, they are willing to pay for it. Don't be afraid to raise those prices a bit.
Want to offer free digitizing? Fine, but you better be selling 50 garments minimum, and have simple artwork. The second you sense a picky customer, or are producing a lower amount of goods, charge for a digitizing, set up or tape fee, and set expectations with the customer.
Explain to them the intricacies of digitizing and the limitations you may have. Let them know revisions cost money, and that expense might be incurred to them if they are too picky.
Have flexible pricing for your set up fees, perhaps its rated by easy, medium, or hard.
If you have a 6 head, give better deals when quantities are ordered in multiples of 6. If you only have one single head that can do custom names, charge a premium. There is no reason to put a burden on you and your business for things you cannot do well. There is a cost associated with everything.
A sliding linear scale for more stitches is a bad way to show customers what more stitches cost. With more stitches, comes longer run times more thread breaks and machine error. Make sure customers know that adding more stitches causes great complexity. Your pricing should reflect that.
1. Have set up/digitizing fees based on complexity. (Easy, Medium, Hard)
2. Charge Per 1,000 stitches starting at 5,000 stitches (just an example). Exponentially increase prices as stitches go up since complexity goes up. ($5.00 for 5,000 stitches, 6.50 for 6,000 stitches)
3. Don't over incentivize for quantity breaks unless you have faster production channels. Just because you are doing more pieces, doesn't mean it will necessarily go faster.
4. Charge differently for garment types. This compensates for hooping challenges (Easy, Medium, Hard)
5. Asses pricing based on the raw cost of goods. More expensive items are more expensive to replace, so protect yourself. (Garments that cost you $5-10 cost x, $10-20 cost 1.25x etc)
While this may all sound more complicated, remember that it can be broken down like an a la carte menu. You can use matrix pricing in Printavo to set all these up! Need help, reach out to us!
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