Are you passionate about embroidery and want to benefit from it? Maybe you make clothes and decide to enter into the world of embroidery as well. Or maybe you just want to open an embroidery services business. Whatever the reason, this article is great for you! 

This article contains useful information about finding the right answer on how much you should charge for embroidering on different items such as shirts, hats, jackets, pants, patches and anything else you like.

How to calculate your embroidery prices?

First, you need to understand that every business has different expenses. Below we cover the usual costs for the machine embroidery business.

#1. The machine cost and other big investments

The first thing you need to calculate is your first and biggest investment: the embroidery machine, the furniture, the first business expenses, the time it takes to learn how to do embroidery and any other costs you may have.

Let’s say you are just starting out and your total costs are 25000$ and you think you will cover these expenses in 5 years.This means a cost of 5000$/year. In one year you work around 1848 hours. This means that 1h is 2.7$

So how long does it take for a machine to embroider? A machine usually does 600 stitches in one minute, but can do more if you use a professional machine. Check your machine to find out how many stitches it does in 1 minute.

#2. Digitizing

If you do custom embroidery, you need to know how to digitize. Not a computer person? You can hire someone to do it for you or even purchase designs online.

#3. Supplies used for the product 

This should cover all the supplies expenses starting with the blanks you embroider on, stabilizer, thread, marking tools, etc

For example, if you embroider a t-shirt, you will need a blank t-shirt ( about  6$); stabilizer (0.5-1$), thread and marking tools (1$); ballpoint needle (0.5$). This gives us a 7.5$

 

#4. Employee Salary - working hours

Maybe you need to pay a salary. Calculate it with all taxes your business needs to pay. Depending on where you live, there are different incomes. So, let’s make it a usual 20$/h, but yours might be less or more.

#5. Shipping costs

This should cover the boxing time and supplies of the product and the cost of shipping or even the time to ship if you deliver yourself. Let’s say 7$

#6. Profit margin

Add how much you want your business to make. You think about a sum and divide it to the working hours in a year. Let’s say 30$/h

#7. Marketing expenses

This is something you need to seriously take in consideration. You need to advertise for your market, locally or online. You need to be known and build trust. This also means maintaining a website, affiliate marketing, platform fees, etc. Let’s say you add 20% of the total cost.

#8. Rent

 If you have your own space then you are lucky, but usually businesses rent the space. So you need to calculate this as well. Your yearly rent divided by the working hours.

#9. Other expenses

The electricity, gas, printing paper, accountant and other expenses you might have. 

 

Competition

I mention the competition only for guidance. Others have different prices. You will need to see what the average of these prices is and stay in that area if possible.

If there are other criteria you need to take into account, please do so, every business is different.

We created a spreadsheet for you with all the criteria above so you can find out the right price for your embroidery projects. 

The first product cost is only for 1 product. If you want to sell multiple items such as birthday boxes or matching shirts, then the second product cost calculator is the best for you.

 

How to use the free calculator?

The calculator chart is created in Google Sheets and can be downloaded for free from here:

Embroidery price calculator

I. Fill the COSTS (colored cells). 

It will calculate for you the cost of investment, cost of supplies and shipping for 1 item, the cost per hour for an employee, the profit per hour, Rent per hour and other costs.

II. 1 Product Price calculator

Next, you need to calculate the 1 product price. Here you need to fill the light purple colored cells. You will see that the prices will automatically be calculated for you.

Here you have the digitization, cost of stitching, employee cost, profit margin, marketing, rent and other costs. After you fill all the colored cells, a total cost will be calculated. This is the final price you should charge for 1 product.

III. Multiple Products calculator

If you sell multiple products in one order (and I encourage you to do so) then the second calculator comes in handy.

As the first calculator, you need to fill all the light purple cells. Here you have to adjust as you need. For example, maybe you digitize once for 2 items, let’s say shirts. So the time remains the same. Or maybe the products have different designs and you need to add more time. 

In the supplies and shipping cells add only the remaining items costs. One will be calculated in the COSTS area.

When you have multiple orders, the employee's time of work will decrease because he/she can make more in the time the machine stitches. Or maybe you have multiple machines. You can make some tests and see how much it takes.

Strategy to optimize your costs:

As you can see there are many variables. So we can’t offer you an exact price because every business is different. After finding out the price it’s time to verify the competition and see if your price is competitive enough..  You must understand that these prices are made with the idea that you have orders all the time.

At first, you might not cover your expenses, but with time, you will. If you are just starting from scratch, maybe not having an employee would help your business to grow and get someone to help you after you start receiving many orders. But how to start an embroidery business will be in another article.

If your prices are too big, try optimizing your costs by offering multiple items in one order. For example, if the customer buys a second product, offer a 10% discount, for 2 items 15% and so on. Use the spreadsheet to know how much of a discount you can make.

This way you encourage people to buy more. This means multiple sales, more money for you. This is a great way to optimize  your profit as well, even if your prices don t need optimization when compared to competition.

As you can see, with our chart you can find out how much to ask for your embroidery, no matter what you embroider: shirts, sweatshirts, hats, keychains, collars, you name it!

 

We hope our article was helpful for you and we can't wait to know what you think! You can ask us questions, contact us in the  comment section below. If you want to be notified when we post a new article, subscribe to our newsletter.

Happy stitching!