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I have been making shirts and stickers for a while now with cut vinyl and heat press. I get enquiries about embroidery from time to time so I thought I'd maybe look into buying a machine.

But after looking into it, what is putting me off is production time and quantity. If I embroider a 10,000 stitch design plus a name it looks like it takes about 20 minutes with setup and alignment time. Three items an hour doesn't look as though it makes buying a $10,000 machine all that viable. Or am I missing something?

alex.
 

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Where it would pay off is when the machine is running continuously, not just 1, 2, or 3 items. For that quantity you may as well contract it out. I have someone do my embroidery, but I plan on bringning it in house once I know I can keep the machine running steady.
 

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I agree with Greg, I started with embroidery and quickly realized, I needed to keep the machine running to make a profit and the payment. I started 13 yrs ago and my payment for a machine was 2x what a single head payment of today. I did alot of contract work for some local shops and still do some today, I suggest you wait tobuy a machine until it will support itself. I' sure you cant post in the referral section for a contract embroider or find someone locally to handle things for you. ..... JB
 

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Definately agree with keeping the machines running.....I have 3 embroidery heads and just finished up 400 hats and 412 Polo`s over the long weekend. It took me 30+ hours to do the hats and a little more to do the Polo`s.
You will really see your profit grow when you have multiple heads, thats when you really start getting items done quicker....its hard to see that with just one head.
I know that when I am at my day job, I am thinking about my machines just sitting there not running when I have stuff already hooped up if I just had sombody to stop by and load the machine and hit start.....hahaahah

Kevin
Special Tees Custom Apparel
 

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Contracting out your embroidery would be, I think, the best option right now. Still, you would be wise to learn something about the process before you start selling jobs and contracting them out.

In this economy, embroidery is really tough. I just moved from my retail shop back to my home shop. I'm getting rid of the embroidery machine, and contracting out large jobs.

I did a good deal of one off items as gifts, and a good deal of customer supplied goods. Without having my own machine, that's not practical anymore.

That was a good source of revenue when the economy was good -- also I had a $14 minimum charge on customer supplied goods, and built that minimum charge into small orders of goods that I supplied. People were very willing to pay that...again, when the economy wasn't in the toilet.

But I digress...my point is, the small orders aren't coming in like they used to, and the large ones have a long sales cycle, so it takes longer to build up that customer base, even in the best economy.

I think it would serve you to wait on the machine purchase, and test the waters by subbing out embroidery jobs.
 

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Definately agree with keeping the machines running.....I have 3 embroidery heads and just finished up 400 hats and 412 Polo`s over the long weekend. It took me 30+ hours to do the hats and a little more to do the Polo`s.
You will really see your profit grow when you have multiple heads, thats when you really start getting items done quicker....its hard to see that with just one head.
I know that when I am at my day job, I am thinking about my machines just sitting there not running when I have stuff already hooped up if I just had sombody to stop by and load the machine and hit start.....hahaahah

Kevin
Special Tees Custom Apparel
Sounds like you have a lot of work. Are all those hats and Polo's one job? At some point do you see yourself leaving your job to do this full time. Not that it isn't already full time.

After getting home from my day job, I probably put another six hours of work in at home for the business I own. I working to hopefully leave my job within the next two years. I dream about the day I'm able to come in and hand them the letter and say, see ya!:D
 

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Discussion Starter #7
Thanks guys. Subbing out seems to be the way to go.

Another idea. Is there a cheaper/smaller machine that I can use for personalizing garments that I have had made by someone else.

I have a contact that might get me regular orders if I get their 13,000 stitch logo sewn by someone else in large batches and then add the personalization myself.

Any ideas?

alex.
 

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Alex when it comes to embroidery machines you truly get what you pay for. You can buy a home machine, but the speed and quality will not be like a commercial machine. The home machines are still $3000 + to purchase. I would find out if you could do the logo in embroidery and then persalize in vinyl. I would approach the customer as this is a cost savings for them to do it this way. It truly is not what you do, but how you sale it that counts. ..... JB
 

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Alex when it comes to embroidery machines you truly get what you pay for. You can buy a home machine, but the speed and quality will not be like a commercial machine. The home machines are still $3000 + to purchase. I would find out if you could do the logo in embroidery and then persalize in vinyl. I would approach the customer as this is a cost savings for them to do it this way. It truly is not what you do, but how you sale it that counts. ..... JB
I never thought of putting the names on in vinyl. I'll try making up some samples and seeing what it looks like.

Thanks
Alex.
 

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Alex,
Any home machine will do names, but as mentioned before,the quality isn't quite the same. If you really want to go that route, get a brother pr600 or babylock 6 needle machine. You can pick up a nice used one for around 4-6 grand and they are real workhorses. I know lots of shops who actually prefer them(I'm one of them). It's also a cheap(relatively speaking of course) way to see if you enjoy it. It will also give you the time you need to learn digitizing for smaller orders if you are so inclined. Some of us make money in large orders, some of us make money in small one of a kind orders. As long as we make money, that's all that counts.
 

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We used to have a factory that ran 24 hours a day with 10 machines, some were 20 heads, the others 12 etc. We ran mostly for fashion houses and lost all that when China was the cheaper option. Now we operate from home with 1 x 6 head and 4 singles. Everyone is doing embroidery and cutting prices to the stage where it is nowhere near profitable. About 2 years ago I bought heat presses etc for sublimation, about a year ago a bought a one colour pad printer, and 6 months ago started offering 1 colour screenptinting. If I hadnt looked ahead and gone with these, I would have been in big trouble. I also supply 90% of my own clothing and pens etc. I try to discourage the customer from bringing their own as I make more on the whole item. I am now looking to add engraving to what I can offer. I am actually trying to sell my one single head industrial machine to be able to do this. Embroidery is a big outlay all round and those needles need to be going continually for at least 12 hours a day to make it worthwhile if that is all you are doing.

Gemais
 

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Sounds like you have a lot of work. Are all those hats and Polo's one job? At some point do you see yourself leaving your job to do this full time. Not that it isn't already full time.

After getting home from my day job, I probably put another six hours of work in at home for the business I own. I working to hopefully leave my job within the next two years. I dream about the day I'm able to come in and hand them the letter and say, see ya!:D
Yes all those Polo`s and Hats were one job....I got hooked up with a big Commercial Construction company close to where I live, and they just happen to be planning their 75th anniversary this year and I was able to get the job to do all of their shirts and hats for their employees. This was definately my biggest order ever, and I hope there are more to come.
I would definately LOVE to be able to do this full time, its just a matter of keeping the work coming in and building a good customer base.
I am planning on moving into Screen Printing maybe by the end of this year or the first of next year for sure....I will be attending the Indianapolis show this weekend and take another look at the screen printing equipment as I did in Chicago a couple of weeks ago at the ISS show there.
 

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I was at the Chicago show also. Some pretty cool stuff. Wish I had an open checkbook to get a lot of it. Did you see the xpress screen demo. I loved it up until the price. I'm sure it would pay off quickly. Just can't do it right now. I'm also setting up a little screenprint shop. Just one and two color right now. Trying to do it as cheap as possible. Good job on landing the big fish. Hopefully that will turn into more work down the road.
 

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With many in this thread suggesting to contract out at the outset, what is a fair rate (per stitch) for doing so? I know that we are all in different areas and quantity will better dictate the price, but, is there a "wholesale" rate versus the retail rate?
 

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I've always said that if someone wanted to do embroidery and profit from it, that they would have to have at least a 4 head. Ultimately a 1 head and 4 head at least.
The cost is definately alot more to really profit from embroidery.
Say your expenses totaled 15.00 per hour and you wanted to generate 60.00 per hour, which would mean your profit is 45.00 a hour.
A design(7500 st) would take 15 minutes to sew 1 at 500 per minute.
1 head 4 and hour 15,000 per head
4 head 16 per hour 30,000 per 4 head
8 head 32 an hour 55,000 per 8 head
12 head 48 per hour 75,000 per 12 head

It definately takes alot of money to make embroidery profitable.
Personnally that's why I think you see alot of 1 head embroidery machines for sale.
Same goes with the DTG printers as well. Basically the same process in both.

There are alot of embroiderers out there. Let them fight for your business and keep the overhead low.
 

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We contracted out embroidery for more than a year before we bought a machine. Even paying the contract company we still made a lot of money on these items. Embroidery is considered high end and since you do your work on more expensive garments you also make a larger profit dollar on each item.

A 10K stitch design will take about 15 minutes or more depending on the complexity. You will make less per hour on these designs with a single head machine than on smaller stitch count ones.

However, I would say if you machine is idle, it is making $0. Even if you make $5/hr and are covering your costs you are making money. Only when you are at capacity can you start to raise your prices or reject smaller jobs.

As has already been mentioned, multi-head machines increase your ability to knock out jobs faster, even if you have to sew slower.

A single head machine is about $12K new. You can pick up a used one for less. Also, a 4 head machine is about $25K-$30K depending on the model and manufacturer.

Here is the minimum and maximum we have done with a single head machine. Our most complicated job worked out to about $20/hr. Our least complicated job worked out to $150/hr. Both on a single head machine. We also sold a single piece for $600 with a cost to us of about $250 in digitizing fees. It took about 3 hours to sew.

Now I know screen printing can be profitable but making $3 on a single shirt means you have to do a lot of them to make some bank. On the other hand, we can make $15 on a single shirt, sometimes more, with a 3500 stitch logo on a nice polo shirt or hat. For wholesale orders (contract embroidery) we make a little less but it is still profitable.

One other item we do well on is hats. Hats are inexpensive, from 80 cents to $3 each and we sell them for up to $20/each retail and down to $6/each wholesale if the order is 144 units or more. There is no way you cannot make money on hats.

Now, how to pay for the machine. We looked at a lease but didn't like the terms. The cost of the financing was a rip-off IMO. I didn't want to have to sell my next job to make the lease payment. We also looked at an SBA loan. The rate was prime plus 10%. Again, too much. We finally used a check from our credit card company at 3.9% for the life of the loan. Fortunately (if I can use that word) we have an extensive line of credit with a number of credit card companies because of our success in our software development and training business and we were getting these checks almost daily for anywhere from 1.9% to 9.9% and we used those to finance our promotional products business. That has worked out well for us. The key in those checks is the interest rate can never go up as long as we make the payments on time.

I hope all of this helps you out.
 
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