Often embroiderers who also operate their hobby as a business, forget to work in the hidden costs when pricing their product.  The most obvious, such as purchases like thread and fabric, is easy, but when your workplace is in your home, you forget to calculate the hidden costs such as electricity and working space.

Then, there is much controversy amongst embroiderers about digitizing pricing. Never criticize someone else's business model, as a business model is unique to the business that created it. What works for one company may or may not work for another. It doesn't matter if someone charges by the stitch, by the design or by the hour. What should be a concern is the quality and value that you receive in exchange for the price paid for the digitizing. There's a lot more to a design than the price; however it seems that many embroiderers focus on price. Naturally, everyone wants the most competitive price possible, which is good business sense. Just be careful not to throw good business sense out the window solely in favour of the best price. Try to create a formula that offers your customers the best price that you can provide while still maintaining a quality design.
 
Beware of the hidden costs of digitizing. The cost of your design isn't how much you paid the digitizing company. That's the smallest part of the price. What matters with a design is production quality and efficiency. Unnecessary color changes, trims, thread breaks and a poorly pathed design can cost you much more in production than the cost of the actual design. While you might have found the best upfront deal, you'll pay for any inefficiency for the life of a design. The best thing I can equate this to is a laser printer. The cost of the printer is your initial out-of-pocket expense; however the cost of the toner is your ongoing expense. Any relationship must be a win-win relationship. You need to receive the best overall design cost, and the digitizing company needs to receive a fair price to ensure that the proper time is placed into every design.

Using Creative DRAWings software eliminates most of the problems mentioned above as it assists you to create a quality design that is pathed to avoid problems such as unnecessary colour changes and trims.  With Creative DRAWings, you get to see what the end product will look like before you as much as thread a needle.  Of course, you'll have to gradually work the price of your software into the pricing of the product, but, you will save considerably in the long run as you won't have to keep on purchasing new designs but you'll be able to merely create them and save them as you go along.

The best advice is to sit down and create a formula which you apply to all the products you sell.  This formula should include hidden costs as well as the obvious ones.  Also include the inevitable such as machine services.  Naturally, you will not come up with a perfect plan with your first effort, but it is advisable to modify your formula as you become more accomplished and aware of factors which you have left out.