Job Costing for Embroidery Profit

Join us on this several part series about arming yourself with top strategies for embroidery pricing, and learning to be flexible. 

Most embroidery shops struggle with knowing what to charge for their embroidery work, and it seems like every shop has a different way to approach the problem.

If you walk into five embroidery shops in town, chances are there will be five different cost/pricing methods used.

Some business owners prefer to shoot from the hip and come up with a price on the spot. Other shops fall into the trap of paralysis by analysis. They spend more time thinking about the perfect price for the job than it was worth. To add to the stress, if the business is new, it seems like so much is riding on correct and accurate pricing.

Typical worry points when pricing:

  • “If I don’t price correctly, I won’t get enough business to pay the bills each month.”
  • “I only get one chance to bid on a job with NO take backs.”
  • “I must price correctly, or the competition will take my clients.”
  • “If the price is too low, I will feel taken advantage of.”
  • “If my price is too high, I will be taking advantage of others.”

What do you believe about money?

Not only that, but we all bring our personal perspective and relationship with money into our pricing decisions.

The lessons our parents taught us about money and our core personalities play out when deciding what we are willing to accept for the work we do and the risks we are willing to take as business owners.

Some people are protective to a fault and let huge opportunities pass them by because their primary goal is to protect their empire at all costs. Others make decisions as if money literally grows on trees.

Lord help the husbands and wives who work together with different money personalities!

Don’t procrastinate, have a written method

Unfortunately, deciding how to price embroidery jobs with a commercial machine can often become a huge procrastination point, but it doesn’t need to be that way.

Understanding embroidery costs is about knowing a few key principals and having some well-founded pricing models on hand. You’ll use these models like a swiss army knife; pulling out the right tool for the job at hand.

With practice, these tools, and a written plan you’ll be able to come up with your price quickly, so you don’t lose any opportunities, and you’ll be able to know what that job will mean to your bottom line.

Keep pricing in perspective | match to your overall goals

First, it’s important to keep pricing in proper perspective. Knowing your goals upfront will help remove the fears and keep your business moving forward.

Learning how to price embroidery and monogramming jobs correctly is only one part of reaching your overall goals.

Business Tip: Pricing perfectly is not the thing that will make or break your business. It’s simply part of the plan which starts with knowing your goals.

Pricing is simply a tool you use to help you reach your business goals and, more importantly, your personal goals. There’s no need to fear getting it a little wrong from time to time. Let mistakes go quickly. In truth, you often won’t even know if you priced a tough job correctly until you look back.

With each month that goes by and lessons learned, you’ll modify your pricing plan and keep moving forward. So, if it takes a while for you to learn which method of pricing works best for which situation, you’ll be fine.

Business Tip: Your profit potential in the embroidery business is only limited by your imagination, so let go of any fears you have about pricing and focus on your goals instead.

Get more information on breaking down costs and understanding shop costs, here.

Tom Rumbaugh

Tom Rumbaugh

Tom Rumbaugh, ColDesi, has 26 years experience in the decorated apparel industry. Having started as an on-site trainer and installer, he has trained and advised over 3,000 apparel startups. He has served in capacities of district sales manager and product manager for industry leaders as well as president and CEO of his own embroidery, direct-to-garment, and screen-printing facilities. Rumbaugh currently provides content, authorship, and promotion for ColDesi Inc. and other group related companies.

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Charlie Fox

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