Thursday, September 6, 2018

What is stitch count pricing for logo embroidered apparel?

If you have ever shopped for any custom logo embroidered apparel, you have probably noticed a variety of pricing options available for this service. There are a number of different pricing models embroidery companies employ to price their products.  Some companies price by stitch counts, for some the price is included in the polo shirt and yet others use a combination of the two.
Pricing by stitch count has been used by embroidery shops for decades.  In fact, it is probably the most commonly used pricing strategy in the industry.  Many shops have a basic formula for pricing this way that is usually based on price per thousand stitches.
The concept of stitch count pricing is fairly easy to understand.  It operates under the theory that the more stitches it takes to create a logo or image in embroidery, the more it costs.
It’s sound idea and has its basis in cost accounting methodology.  The more stitches it takes to create a logo, the longer it is on the embroidery machine.  It takes more time and time is money, right?  Embroidery machines are expensive.  So the more time it takes to create an image the more it costs.
So once the stitch count is known or estimated, the price can be quoted.  For example, if a logo is 8000 stitches and the price is $1 per thousand.  The price to embroider that logo is $8.
Another reason stitch count pricing is so widely practiced in the industry is because it offers the embroidery shop reasonable certainty that every order will be profitable (assuming they have priced their service properly).  Whether the design is a small one at 5000 stitches or a large one at 45,000 stitches, using this pricing model gives an embroidery shop relative assurances that they are covering their costs and making money on that project.
The problem with this pricing methodology is that pricing by stitch count, is mostly something only the industry insiders understand which makes it very confusing and less transparent for consumers.
The biggest disadvantage to using a stitch count pricing model in my view is transparency.  Customers seeking logo embroidered apparel have no idea how many stitches it takes to create their logo in embroidery.  That puts consumers at a disadvantage in the whole shopping and pricing process.
Therefore, consumers rely on the embroidery shop to tell them how many stitches it is and they have no basis to know if the shop is accurate or if it is inflating that number in order to justify a higher price.
In addition, a customer may get two different stitch count quotes from two different suppliers.  That just adds more confusion for consumers in their buying decision.
Finally, stitch count pricing puts all the attention on price in the customers purchase decision.  It ignores other factors like quality, turnaround time and customer service.  All of which are important factors a customer must consider in a purchase decision.
At Thread Logic, we use a flat pricing model that avoids all the pitfalls of a stitch count pricing model.
For many embroidery shops, pricing by stitch count works for their business model.  It is a tried and true method of pricing a complicated and custom process.  But there are other alternatives to pricing that are more “customer friendly” such as flat pricing that you may wish to explore.
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