Impressions - August 2014 - 50

talking SHOP

Embroidery Technique

Pricing Practices for Embroidery
Evaluate your pricing regularly to make sure you are hitting your revenue target.
By Deborah Jones, Contributing Writer

f you've been embroidering for a
while, you may have wondered, "If
I'm so busy, why aren't I rich?"
There's little doubt that most of us
could tweak our pricing practices. After
all, prices in all other areas of our lives are
like moving targets, so it's reasonable that
we should evaluate our embroidery pricing regularly to ensure we are hitting our
revenue targets. Of course, to do this, you
ﬁrst must establish a target.
Avoid pricing simply out of habit or
by copying another embroiderer's prices.
Your costs almost certainly are different
and you don't even know whether the
other shop is proﬁtable. Instead, be proactive about your pricing policies; it can
impact your business in a positive way.

WHAT ARE YOU SELLING?
It's a good idea to stop and think about
what you're really selling. You're not selling thread in fabric. You're not selling
logos. You're selling a service combined
with a product, which requires your time,
talent and expertise. All of these things have
value. Unfortunately, many people focus
on their price per thousand stitches, making their embroidery work a commodity
rather than the complex combination that
it really is.
It's generally more proﬁtable to sell
garments or other products, such as bags
or blankets, rather than simply providing
the embroidery. You and your customer
reap several beneﬁts when you recommend products that are familiar to you. If
you choose wisely, you are recommending
and selling a product that:
* has good characteristics for
embroidery
* is long-lasting, and washes and
wears well
* is easily obtainable
* supports a good mark-up.
50

Impressions | August 2014

I advise bundling the price for the embroidery and your recommended product,
allowing you to give your customer a single
price. This is a better pricing strategy than
possibly confusing customers with details
they don't care about anyway. Plus, you
may unknowingly cause them to make incorrect comparisons between your prices
and those of your competitor when you
break down the costs of the embroidery
and garment separately.
The amount of margin that you can
reasonably expect varies between promotional priced items and more upscale garments. For example, you may be able to
double the price of a $10 shirt by adding
the price of embroidery, thus resulting in
the bundled price of the completed garment. This is called keystoning. However,
you're less likely to be able to keystone an
upscale branded shirt that costs $30. Your
margin may be lower, but you still make
a reasonable dollar amount per garment,
plus your embroidery price (Figure 1).

CALCULATING PRICE PER
THOUSAND STITCHES
To add the price for embroidery, most
embroiderers use the price-per-thousandstitches approach. Calculating your price
by stitch count may play a part pricing
formula, but it isn't the whole story.
Here's why:
Let's say that you decided to charge
$1.50 per thousand stitches. Men's shirtcuff monograms can be proﬁtable, but a
300-stitch monogram would only cost

about $0.50 using the price-per-thousandstitches formula. Two pricing policies
should be established: minimum price per
piece and minimum price per order.
For example, let's say that a singlehead
machine owner chooses $7.50 as the minimum price per piece and $17.50 as the
minimum per order. A customer with two
shirt-cuff monograms at $7.50 would pay
$17.50 for the two monograms to meet
the minimum price per order requirement. The customer should bring three
shirts to get the best value.
It's helpful to know the average cost of
producing a thousand stitches in your shop
or studio. Knowing the cost of producing
embroidery can help you price more proﬁtably. In many shops, this cost is more than
the owner imagines. (See "Knowing Your
Cost to Produce Embroidery" to ﬁnd out
how to calculate your cost.)

PRICE LIST ANYONE?
If you ask 100 embroiderers if they have
a price list, most would say that the nature
of custom embroidery doesn't allow price
lists. Certainly, variables must be taken into
account, so I prefer having a price guide.
A well-designed price guide can give your
customers a high level of conﬁdence and
actually help you sell.
A colleague, Frank Gawronksi, illustrates that point by asking the following:
"Do you feel more comfortable getting
into a cab with a meter or a cab without a
meter?" Your price guide is a sort of meter
that gives your customer a base price.

Garment
Cost

Garment
Price

Embroidery

Combined
Price

Selling
Price

$10

$20

$12

$32

$31.95

Figure 1
impressionsmag.com

http://www.impressionsmag.com

Impressions - August 2014

Table of Contents for the Digital Edition of Impressions - August 2014