New custom apparel decoration pricing approach replaces the old stitch-count method of quoting
The National Network of Embroidery Professionals (NNEP) has released the initial findings an embroidery pricing study it recently conducted as part of a live Industry briefing May 6. The data, drawn from embroidery and decorated apparel businesses across the United States, reveals that the majority of shops are operating with incomplete pricing systems, and that most are unaware of this gap.
According to the NNEP study, the average diagnostic score among respondents is 8.1 out of 20. Fifty-one percent scored in what it calls the “Blind Spots” range (0–7), indicating structural pricing gaps. Forty-two percent scored in the “Partial” range (8–15). Seven percent scored “Strong” (16–20).
Custom Embroidery Pricing: More than Just a Stitch Count
“The model we’ve all used for decades for pricing is incomplete,” said Jennifer Cox, president and co-founder of NNEP. “Quoting by stitch count was never designed to produce consistent profitability. Most businesses are finding out they’re losing money more often, and by more dollars, than they ever understood.”
As part of the briefing, NNEP also introduced a new online pricing tool its calls its Embroidery Pricing Diagnostic—a five-driver model developed by NNEP to move the industry from stitch-count quoting to order economics. The five drivers include Production Cost, Real Labor, Intended Profit, Capacity Pressure and End Customer Value.
Pricing Tool Maximizes Customer Embroidery Profitability
When it comes to pricing, Cox noted, the competition for an order is rarely another shop. More often, it is other demands on the customer’s budget—a vehicle repair, an unexpected household expense, a school fee. Customers are not typically comparing quotes across shops. They are deciding whether the order is a current priority.
“What the shop down the road charges is irrelevant,” Cox said. “What matters is how much it costs you to create that order — and whether you’re charging more than it’s costing you.”
According to Cox, a second Industry Briefing is scheduled for June 24, with a small-group Implementation Intensive also planned for August. For more on the NNEP and its new Pricing Diagnostic go to nnep.com/diagnostic.
