Pricing your hand embroidery

Price hand embroidery from three numbers: what the materials cost you, how long the piece took, and what an hour of your time has to bring in. Multiply your hours by your hourly figure and add the materials. Hand embroidery is not fast, so your time is the main thing you are charging for.

Every dollar figure on this page is a made-up example that shows the arithmetic. None of them is a market rate, and none of the hours is an estimate of how long any design takes. Work out your own numbers with the steps below.

The formula

Price = materials + (hours x your hourly figure)

Hourly figure = pay for yourself + your share of overhead + profit

This follows the way a university extension program teaches small producers to price what they sell direct. A price has to cover your variable costs, which are the materials and the labor in each piece. It has to cover your fixed costs, which are the costs of owning and running your setup. And it has to leave pay for you and money to put back into the work. A price that only covers costs leaves nothing for yourself.

Two ways to charge

Both come from the same numbers. A flat price is the same sum done once and reused.

Step 1: Add up the materials

• Count what you had to buy. One experienced embroiderer costs a project by the whole skeins and spools it needed, on the reasoning that to use part of a spool you had to pay for all of it.
• Include the things that are easy to leave out. Shipping on supplies, needles, and small supplies such as transfer materials all cost money.
• Include the finishing and the packaging. The hoop or frame the piece is sold in is a material. So are packaging and anything printed that goes with it, and those are expensive for a small seller.

Step 2: Time the work

• Keep track of the time each piece takes. You cannot price by the hour without it.
• Expect filled areas to take a lot of time. Filling a space completely with stitches takes a lot of time, even when the space is small and the stitches are simple. An outlined design and a filled design of the same size are very different jobs.
• Count all of it, not only the stitching. Designing, finding and ordering supplies, packaging and mailing are all time you have to be paid for.

Step 3: Work out your hourly figure

The numbers here are examples.

1. Add up a month of overhead. These are the costs you carry whether or not you sell anything: tools and equipment and their repair or replacement, insurance if you have it, and fees such as a booth at a fair. Example: $40.00.
2. Estimate the hours you can charge to pieces in a month. Example: 20 hours. $40.00 / 20 = $2.00 of overhead per hour.
3. Add pay for yourself. The extension advice is that anyone who produces things to sell should have a salary for themselves in the books. Example: $18.00 per hour. $18.00 + $2.00 = $20.00.
4. Add profit. This is the money that goes back into the work, such as replacing what wears out. Example: 10 percent. $20.00 x 1.10 = $22.00 per hour.

Step 4: Price the piece

Example: your record shows 6 hours on a piece, counting everything in step 2, and the materials came to $9.00.

• Time: 6 x $22.00 = $132.00
• Materials: $9.00
• Price: $141.00

If you sell through a card reader or an online payment service, the processor keeps a fee from each sale. Count those fees in your overhead or add them here.

Step 5: Check it against the market

• Look at what buyers pay for similar work. What customers pay for the alternatives is one of the basic questions of market research.
• Do not simply copy other sellers' prices. Charging what everyone else charges is a place to begin, not a place to stay. You need to know your own costs.
• Expect a gap. A price that honestly covers your costs can come out higher than you think the market will bear. An embroiderer who makes something of real value does not necessarily get paid that value.
• Change the piece before you cut your pay. You can bring the hours down with a design that has less filling. You can also match the materials to the purpose of the piece. A kitchen towel does not need the materials a showpiece does.
• Be wary of selling more for less. It is sometimes better to sell fewer pieces at the higher price than more at a lower one. For handwork that matters more, because the hours you have are limited.

Work on a customer's own item

Stitching on a garment the customer brings carries a risk that your own fabric does not. If stitches have to come out of a knit, they can leave visible marks, and it is easy to snip the fabric itself. Agree with the customer before you start on what happens if the item is marked. How to embroider on clothes covers the fabrics, and how to remove stitches covers what unpicking does to them.

Designs you did not draw

This is general information for the United States, not legal advice.

• Patterns are protected. An embroidery design is artwork, and copyright protects original artistic works.
• Stitches and techniques are not. Copyright does not protect ideas, methods or processes, so a stitch cannot be copyrighted.
• A free pattern is not a license to sell. Free patterns are normally offered for personal use. Before you sell pieces stitched from someone else's pattern, read the designer's terms, and ask if they do not cover it. The Copyright Office's advice in cases of doubt is to get permission, and its answer to how is simple: you can ask for it.
• Floss Field's own patterns come with that permission. You may stitch them for yourself and for gifts, and you may sell pieces you have stitched by hand yourself, in small quantities. You may not resell or share the pattern PDF itself. Every pattern carries a line that says so, on its page and in its PDF, and the site's Terms page has the full wording.
• Names and logos belong to someone too. Copyright does not protect names, titles, slogans or short phrases, but these may be protected as trademarks, and logo artwork can be protected by copyright as well. A trademark can be any word, phrase, symbol or design that identifies someone's goods or services. Do not stitch brand logos, team marks or characters for sale without the owner's permission.

Tax in the United States

• Hobby income still counts. The IRS describes a hobby as something you do for enjoyment with no intention of making a profit, and says income from it must be reported.
• Hobby or business depends on the facts. The IRS looks at factors such as whether you run the activity in a businesslike way with complete and accurate records, and whether you put in time and effort to make it profitable. No one factor decides it.
• If you are self-employed, you figure your net profit by subtracting business expenses from business income. You have to file an income tax return if your net earnings from self-employment were $400 or more, and self-employed people generally pay self-employment tax, which is a Social Security and Medicare tax, as well as income tax.
• State and local taxes vary by location. Check with your state and local governments.

Tax rules change. Read the current IRS pages or ask a tax professional before you rely on any of this.

Common mistakes

• Charging for the thread and little else. The most valuable thing in any embroidery project is your time.
• Timing only the stitching. Designing, sourcing, packaging and mailing are part of the job.
• Copying a price without knowing your costs. Run your own numbers first.

If you sell pieces in the hoop, see how to finish a hoop.