Heads up: We built the Inktavo Embroidery Pricing Matrix to help you estimate the profitability of embroidery jobs and the cost of subcontracting jobs. Download your copy here, then scroll below to learn about the popularity and benefits of offering embroidery at your business. 

Embroidery is a decoration method most businesses in the custom-branded merchandise industry offer, either in-house or outsourced. But often, it’s a service that isn’t promoted as heavily as other disciplines like screen printing, heat transfers, or direct-to-film (DTF). 

Even if your shop isn’t highly specialized in embroidery and you subcontract it out to another decorator, promoting this decoration method is a great way to boost your bottom line and help your shop stand out from the competition since it offers certain detail and quality not possible with printed garments. Here’s a look at why it’s worth considering embroidery. 

1. A Change in Demand for Embroidered Products

Even though embroidery is often considered a niche decoration method, consider this: one recent report found that the global embroidery market was valued at more than $3 billion USD and is expected to surpass $5 billion by 2027. There are a few factors most likely contributing to this popularity: 

  1. Increased Customization: The growth of e-commerce and direct-to-consumer businesses has also impacted decorators since it has increased the demand for personalized products. Take a minute and think about how many ads you see a week for a website that will add a logo to a hat, shirt, or tote for you with various fonts, colors, and substrates. Embroidery offers high-quality, durable personalization, and while it might not offer Amazon-level turnarounds, it’s a customization that customers will be willing to wait for. 
  2. Brand Perception: If you print merch for corporate clients, you’ve probably noticed many have moved away from the cheaper swag for their employees. The days of the cheap T-shirt that ends up on the thrift store rack are slowly fading away. Embroidered logos and designs convey a sense of professionalism and longevity, making them appealing to corporate clients and their promotional items.
  3. Fashion Trends: Every few years, an old style considered out-of-date comes back and is labeled “vintage” or “retro.” You could argue that some older styles incorporating embroidery have resurfaced in popularity. 

2. Expanding Your Customer Base with Embroidery 

Typically, you’ve probably seen embroidery on popular products like jackets for sports teams swag for schools, and corporate clients. But there’s opportunity across other customer niches, too. 

  1. Tourism and Hospitality Businesses: Any popular destination location is a great candidate for embroidery, especially if it’s in your local area and you can establish rapport with the owner.Whether that’s a hotel, resort, aquarium, botanic garden, theme park, or any other popular spot that people from out of town frequent, these businesses thrive on selling branded merchandise in their gift shops and online stores.

    Embroidered polos, caps, and tote bags are all perfect products you can offer these customers. Because of their perceived value, you can charge a premium for the decoration method.

  2. Small Businesses and Startups: While smaller businesses and startups won’t have as big a merchandise budget as tourist attractions, they’re still in the business of brand building.Anything you can offer them that establishes a professional image, like embroidered apparel, headwear, and embellished promotional items for their customers, can be a strong contender.
  3. Franchises: These businesses can be slightly more complicated to tap into since they often have particular brand guidelines and colors. However, if your business is skilled at working with chains and larger enterprises, working with a franchise is a profitable niche for embroidered apparel, much like corporate clients.Franchises usually have a larger budget and a more extensive workforce, which means larger orders.

3. Complementing Other Decoration Methods

You can also use embroidery to complement other popular decoration methods like direct-to-film (DTF) and direct-to-garment (DTG) printing:

  1. Mixed Media Designs: Combining embroidery with DTG or DTF creates visually striking and textured designs.
  2. Premium Tier Offerings: Embroidery can be marketed as a premium option for clients looking to elevate their products. A premium product offering is where the “good-better-best” strategy comes into play.
  3. Versatility: While DTG and DTF are great for detailed, colorful prints, embroidery excels with logos and text that require durability.In other words, if your customer needs the text and font to stand out on a garment or accessory, embroidery can be an excellent option.

Now, while adding another service to your menu might sound enticing, here are three big questions to consider before diving headfirst into embroidery:

  • Is it profitable for my shop? 
  • When do I contract out? 
  • When do I say “no”? 

Here’s a deeper dive into all three questions. 

Ensuring Embroidery Jobs are Profitable 

Profitability is critical for any decoration job, and embroidery can get complicated and expensive much faster than heat transfers or a single-color screen print. This is why a cost estimator like the Embroidery Pricing Matrix is useful. Before even crunching the numbers, consider these few factors: 

  1. Design Complexity: Complex designs require more time and resources, which impact labor costs and final job prices.
    Make sure you spell this out for your customer before building a mockup.
  2. Material Costs: While the cost of raw materials for embroidery, like thread, isn’t necessarily expensive, some garments are pricier than they would be for other methods like screen printing.The stitching usually requires heavier-duty fabrics, so if you’re decorating apparel, that’ll mean more expensive items like polos, jackets, and sweatshirts.
  3. Labor Time: Digitization, setup, and actual stitching all factor into the cost of an embroidered design. Subcontracting out, especially digitizing, can speed up some of this process.
  4. Routine Maintenance: Like all your other equipment, routine maintenance of your embroidery machines (if you’re stitching in-house) is key to profitability.Make sure you factor in downtime for maintenance on your monthly schedule so you don’t have machine breakdowns mid-job.

When to Contract Out Embroidery 

If you’re not prepared to make the equipment investment, here are a few reasons why contracting out embroidery work can also be beneficial to you and your team: 

  1. Keeping Up with Demand: If your in-house capacity is constantly maxed out, contracting out embroidery helps you stay on top of orders without sacrificing quality or missing deadlines.
  2. Specialized Orders: For high-volume orders or super detailed jobs, contracting out can save your team labor hours and headaches while still netting a profit.
  3. Training Capacity: Training to run an embroidery machine takes time, and if it’s not possible to factor in that downtime at your shop currently, outsourcing can save you time on crosstraining. It’ll also give you more space to assess whether it’s worth bringing embroidery in-house. 

When to Say “No” 

You’ve probably had other instances where it’s more feasible to refer your customer to someone else instead of taking a job on, which can also happen with embroidery. Much like other decoration methods, here are a few key reasons you might want to pass: 

  1. Short Deadlines: Embroidery is time-consuming and intricate, so if the customer “needs it yesterday,” it’s probably not worth your time. Rushing the job sets you up for errors and could end up costing you more than the job is worth.
  2. Unprofitable Orders: If a quick calculation with the pricing matrix shows that the job doesn’t meet your minimum profitability thresholds, it’s worth reconsidering unless you develop an added fee that works for you and your customer. This is also a slippery slope, though, since making an exception can create unrealistic expectations for future jobs for that customer.
  3. Design Complexity: If the design is too complex for embroidery, suggesting another decoration method is a good idea. You won’t be able to charge a premium fee for an embroidered logo, but if it’s simpler to print it with DTF and you’ll be able to keep the customer, that’s a trade-off. 

If you can use embroidery alongside your other decoration methods, you can maintain a reputation as a shop that offers diverse, high-quality options. Plus, pairing those decoration methods with tools like online stores and production management software can set you and your team up for success. 

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