How do I calculate the price of an embroidery job?

Add up all costs — thread and backing materials, needle depreciation, machine overhead, and labor — then apply a profit margin of 25–40%. A common formula is: (materials + overhead + labor) divided by (1 minus your desired margin). Always include your actual hourly labor rate, not minimum wage.

What profit margin should an embroidery business aim for?

Most professional embroidery businesses target 30–50% gross profit margin on labor-inclusive jobs. On materials-only markups, a 3x to 5x markup is standard. Avoid pricing below a 25% margin — it leaves no room for mistakes, slow periods, or business growth.

How much should I charge per stitch for embroidery?

A common starting point is $0.50 to $1.00 per 1,000 stitches, depending on your market and overhead. A 10,000-stitch left-chest logo would be priced at $5–$10 for stitching alone, then added to garment cost and markup. Use actual cost calculation rather than pure per-stitch pricing for accuracy.

Should I charge a setup fee for embroidery?

Yes — a setup or digitizing fee is standard practice and fully justified. Digitizing a new design takes 30 minutes to 2 hours. A one-time setup fee of $10–$50 for simple designs and $50–$150 for complex ones covers that time. Returning clients reusing an existing file are not charged again.

How do I price embroidery for small orders vs. large orders?

Small orders (1–11 pieces) should be priced higher per piece because setup costs are spread across fewer items. Large orders (50+) can receive 10–20% bulk discounts while remaining profitable. Never discount below your break-even cost per piece regardless of quantity.

How to Price Embroidery Jobs: The Complete Pricing Formula

One of the biggest reasons embroidery businesses fail — or fail to grow — is underpricing. It feels counterintuitive, but charging too little is just as dangerous as losing jobs to higher bids. When you undercharge, you end up too busy to be profitable.

This guide walks you through the exact pricing formula used by professional embroidery shops, covering every cost component and how to set healthy margins.

The Core Pricing Formula

Job Price = (Thread Cost + Backing Cost + Needles + Overhead) + Labor + Margin

Let's break each component down.

Thread Cost

Thread is one of your most tangible costs, and it's one that's easy to undercount.

A typical 40-weight polyester spool holds ~5,500 meters and costs approximately $5–$8. A standard small left-chest logo might use 5,000–15,000 stitches, which translates to roughly 20–50 meters of thread.

Formula: (meters used / meters per spool) × spool cost

Example: 30m used from a $6 spool with 5,500m = $0.033, or about 3 cents per garment

At higher stitch counts (50,000+ for a jacket back), thread costs rise to $0.30–$0.80 per piece. Always calculate this, even if it feels small — it compounds across orders.

Backing (Stabilizer) Cost

Cut-away backing costs roughly $0.05–$0.15 per piece depending on weight. Tear-away is a bit cheaper. Specialty stabilizers for stretchy fabrics cost more.

Don't skip this calculation — it's easy to forget and adds up on large orders.

Needle Depreciation

Embroidery needles should be changed every 4–8 hours of sewing or every 2 million stitches, whichever comes first. A pack of 10 needles costs $6–$10.

At $0.70 per needle / 2M stitches per needle = $0.00000035 per stitch. For a 10,000-stitch logo, that's about 3.5 cents. Not huge, but real.

Overhead Costs

This is where most embroiderers lose track. Overhead includes:

Machine depreciation: A commercial machine costs $15,000–$30,000 and lasts ~10 years. That's $1,500–$3,000 per year, or $125–$250/month.
Rent/space: Even if you work from home, factor in a portion of your utilities and space.
Software: Design software, NeedleKit Pro, etc.
Insurance: Business liability, property.
Marketing: Website, ads, business cards.

Add these up monthly and divide by your production volume to get a per-head overhead figure. For a part-time operation doing 100 pieces/month, overhead might be $2–$3 per piece. For a high-volume shop doing 2,000 pieces/month, it drops to $0.25–$0.50 per piece.

Labor Cost

This is your most important — and most commonly undervalued — cost.

Steps to calculate:

Decide your desired hourly rate (minimum: $25/hr, typically $40–$75/hr for skilled embroidery work)
Track your actual time per job: setup, hooping, trimming, inspection
Divide time by quantity to get per-piece minutes

Example: Setup takes 20 min, run time is 3 min/piece for 12 pieces, cleanup/trim takes 15 min. Total time = 20 + (3×12) + 15 = 71 min. Per piece = 71/12 = 5.9 min. At $40/hr: 5.9 min × ($40/60) = $3.93 per piece labor

For machine auto-running time, you can factor a lower effective rate since you're doing other things while the machine runs.

Profit Margin

After covering all costs, you need margin — not just to survive, but to grow. Industry standard for embroidery businesses ranges from 25% to 60% depending on market position.

A simple markup approach:

Apply a 3× to 5× markup on materials only (thread, backing, garment)
Or apply a 25–40% margin on total cost

Example full calculation:

Thread: $0.08
Backing: $0.08
Needles: $0.04
Overhead: $1.50
Labor: $3.93
Total cost: ~$5.63
At 40% margin: $9.38 per piece
Minimum price with 12pc order: $112.56

Stitch Count Pricing

Many professional shops use a stitch count pricing model:

| Stitch Count | Suggested Price Range | |---|---| | 0–5,000 | $4 – $6 | | 5,001–10,000 | $6 – $9 | | 10,001–20,000 | $9 – $14 | | 20,001–50,000 | $14 – $25 | | 50,001–100,000 | $25 – $45 |

These are per-piece prices and assume you're supplying the garments or marking up garments separately.

Bulk Discounts

Most shops offer tiered pricing to incentivize larger orders:

| Quantity | Discount | |---|---| | 1–11 | No discount | | 12–23 | 5% | | 24–47 | 10% | | 48–99 | 15% | | 100+ | 20% |

Never discount below your break-even cost. Use the NeedleKit Cost Calculator to quickly model any quantity scenario, including bulk tiers.

Rush Fees

Rush orders mean opportunity cost — you're bumping other jobs. Charge accordingly:

48-hour rush: 25% surcharge
24-hour rush: 50% surcharge
Same-day: Double rate minimum

Creating Professional Quotes

A professional quote should include:

Item description and garment specs
Stitch count estimate
Quantity and per-piece pricing at each tier
Digital proof or reference image
Quote validity period (typically 30 days)
Payment terms (50% deposit, balance on delivery)

NeedleKit's Cost Calculator generates professional PDF quotes in one click, including your logo, line-item breakdown, and bulk pricing tiers.

The Bottom Line

Stop guessing. Start calculating. Every job should have a documented cost breakdown that justifies the price you're charging. When you know your numbers, you negotiate better, quote faster, and grow more profitably.

Try the NeedleKit Cost & Time Calculator free — it does all of this math automatically.