(another) Embroidery Start-Up

crafty · June 29th, 2012, 06:24 PM

Hi everyone, I'm new!

Here is my background: I've been working for a small embroidery company for 2 years. I run 3 single-head Amayas (2 big reds and 1 XT) and I've been learning/teaching myself to digitize. I'm not a prodigy but I do know my way around DesignShop. I've taken over a lot of the logo digitizing and I can do basic things like text with my eyes closed.

I've been looking into getting my own machine. I already know I need a commercial machine, after running 1000+ stiches/minute and having 16 needles there is no way a home embroidery machine will keep me happy. There seems to be a huge anti-melco bias here, but thats what I know and that's what I'd like to stay with.

Now the kicker. I'm not interested in doing logo tshirts and hats ect. I love the creative side of embroidery. My question is, is there a market for that type of thing? Or am I just asking for trouble? Without going into my whole business plan: crafty one-of-a-kind type things. I'm not trying for high end, more high-quality handmade etsy-type stuff. I have a craft blog with a moderate following and enough relationships in that realm to attract attention. Is anyone here making money on this kind of thing?

I'm young and planning on having a child or 2 in two years or so, I'd like to get a home business up and running before then so I could work less outside the home and stay home longer.

My fiance and I both have full-time jobs with no plans to quit. I've been on the fence with it for a while. On one hand I really want to jump into this, on the other, this is a lot of money!

Sorry for the ramble

sydney.fedesna · June 29th, 2012, 10:12 PM

Yes! Check out my website www.twosocksdesigns.com and see what I do with my single head Barudan machine. Don't get me wrong, I still do plenty of caps, polos, etc. as that is what pays the bills, but I still get to do what I love, which is equestrian embroidery. So far, it has been fairly lucrative, and I really haven't marketed that much outside of my own stables! People seeing my work in person has been my best selling tool. I am relatively new to all this (just ask the people on this forum), but if you have any specific questions on how I got started, feel free to PM me.

Sydney

sydney.fedesna · June 29th, 2012, 10:14 PM

Also, not sure how much research you have done, but since you are familiar with running machines already, you could probably purchased one used and save some $$$$. Check out what Beacon Funding has to offer - it is a good way to go if you don't have the money to chunk down at once for a machine - its basically like making a car payment every month.

AJST · July 1st, 2012, 11:16 AM

Pardon me if I get a little long winded but... As far as your question:
"I'm not interested in doing logo t-shirts and hats ect. I love the creative side of embroidery. My question is, is there a market for that type of thing? Or am I just asking for trouble? Without going into my whole business plan: crafty one-of-a-kind type things. I'm not trying for high end, more high-quality handmade etsy-type stuff. I have a craft blog with a moderate following and enough relationships in that realm to attract attention. Is anyone here making money on this kind of thing?"

When you get down to the nuts and bolts of an embroidery business, you have to balance the money and time invested, verses income. To get a good quality machine, digitizing software, supplies, and products to stitch on you will be investing between 15 to 20 thousand dollars.

The industry standard for a stitched out logo is about 1 dollar per thousand stitches. That's 10.00 for a 10,000 stitch logo. This price varies and depends on the area in which you are located, your competition, and your clientele.

Digitizing takes time and time is money. I love digitizing and that is what got me started in the business. I have spent 6 to 10 hours or more on a logo, trying to get it perfect and making it stitch just right. Look on the internet and see what prices some ask for digitizing and you will see a huge range. As low as 15 dollars for a any size logo to 7 and 10 dollars per thousand stitches. I charge $5.00 per thousand stitches.

Now taking this all into perspective, and please forgive my arithmetic (I made a D- in High School math and was relieved to get that) let's say that I spend 10 hours to digitize and sew out a 10,000 stitch design on one item...

Sewout = $10.00 for the stitch out at 1 dollar per thousand stitches
Digitizing = $50.00 for the digitizing at 5 dollars per thousand stitches.
Shirt = $5.00 profit for the actual shirt, A good quality polo shirt may cost you $5.00 wholesale, I usually charge my customer double the price.

That is $70.00 per shirt and $65.00 profit for 10 hours of work, or $6.50 per hour. This does not take into account the cost of the machine and other expenses.

Lets apply the same formula to 100 shirts. To sew out a 10,000 stitch design on 100 shirts, that is assuming 10 hours to digitize and 30 hours to stitch out 100 shirts on a single head machine (I may be a little ambitious here),

Sewout = $1,000.00 for the stitch out at 1 dollar per thousand stitches 100 times.
Digitizing = $50.00 for the digitizing at 5 dollars per thousand stitches.
Shirt = $500.00 profit at $5.00 per shirt, A good quality polo shirt may cost you $5.00 wholesale, I usually charge my customer double the price.

That is $21.50 per shirt and $16.50 per shirt profit.... $1,650.00 for 40 hours of work, or $41.25 per hour. This does not take into account the cost of the machine and other expenses.

You probably won't be able to sell the shirts at this price, most embroidery companies will waive the digitizing fee and reduce the price of the shirts and the embroidery to something that the customer will be willing to pay. Let's assume you charge $15.00 per shirt for 100 shirts and waive the digitizing fee. Your profit is $10.00 per shirt minus the $50.00 digitizing fee... $950.00 for 40 hours of work is $23.75 per hour.

Again please forgive my math, but I think I am in the ball park. The bottom line is this. The quantity orders of shirts and hats may support your creative ambitions and pay for the machine while you find your niche in the market. I wouldn't discount them totally.

AJST · July 1st, 2012, 11:17 AM

I have seen a lot of people start up an embroidery business in their homes and build it into a money making enterprise. Most are not going to get rich but working for yourself is a great feeling. On the other hand I have seen some folks try this and fall on their face. If you were to ask me, these are some of the things you need to consider when making this leap.

1. BUY QUALITY EQUIPMENT. I cannot stress this enough. Do your research on the machine and the company you are buying it from. You may end up spending a little more up front but you don't want to think you are saving money and end up spending more time working on the machine and having it repaired than you do sewing. When you talk to owners of different brands of machines you are going to get 10 different opinions of which machine is best. A lot of it is like the argument "Which one is better, Ford or Chevy?" You will have to make up your own mind on that question but just be aware of the question "Which one is better, Mercedes or Yugo?" There are a few companies and jacklegs out there that will sell you a embroidery machine for a song and you will end up with an expensive boat anchor.
2. Make sure that whoever you buy the machine from has a good training and technical support program. Check for a Technician in your area that can service and support the machine.
3. Don't over extend yourself. Unless you are pretty sure of yourself and your machine don't start taking orders before you get the machine. Even if you end up buying the same machine you are familiar with there may be an adjustment and learning curve when buying your own machine and setting up your workspace. Make sure any customers that you are talking to know that you are just starting out and it may take time to get rolling.

sydney.fedesna · July 1st, 2012, 02:16 PM

AJ -

Where are you getting good quality polos for 5.00/each???

Please let me know!

Thank you

EnMartian · July 2nd, 2012, 01:11 PM

Check out Urban Threads. They spotlight businesses that use their designs, and there are people doing crafty stuff like you describe and making a living at it. You will have to develop your market and let people know you're out there, but it can be done.

AJST · July 2nd, 2012, 08:46 PM

I dont recall claiming they were good quality Polos... lol... Just an example, with my math skillls I have to keep it simple.

afaerber · January 16th, 2013, 07:43 PM

Hi Crafty! I was just wondering if you ever took the plunge? I'm new to the site and it sounds like we're are in a similar situation. My plan is to eventually create an etsy store for the creative stuff and also do the bulk logo work. I've been researching for a few months now and I think I'm close to doing it. Just wondered how it's been going for you since last summer.

Annette