Contract embroidery pricing: quoting wholesale decoration

How is contract embroidery pricing different from retail?

A retail job hides a lot of slack: the garment carries a markup, a setup charge goes unquestioned, and you control the schedule. A contract job strips that away and leaves the decoration on its own.

Volume discounts should come from costs that genuinely fall: fewer setups, full machines instead of part-loaded ones, predictable scheduling. Not from pretending your machine hour rate drops. Work out what the stitching costs with how to price embroidery jobs, then decide what you can give away.

What should a contract embroidery price sheet include?

Contract customers quote their own customers from your sheet, so anything you leave off becomes an argument later. Name every line:

• The decoration charge. Either per 1,000 stitches or a flat price per stitch band, per location. See embroidery stitch count pricing for how each behaves.
• Your minimum, per location and per order. Short runs are mostly handling: on a 3,000-stitch design about a quarter of the cycle is hooping and loading, which no per-thousand rate charges for.
• Setup: threading up, a test sew, frame changes and an approval round, per design or per run.
• Extra locations. A second location is a second hooping and a second run, not a discount.
• Surcharges for caps, bags, jackets, oversized hoops, hi-vis and towels. Caps alone run roughly 30% slower than flats on the same file: Barudan publishes up to 1,300 stitches per minute on flats against 1,000 on caps.
• Digitizing: whether you supply the file, what it costs and who owns it.
• Finishing: folding, bagging, relabeling, names, box packing and freight.
• Rush: what jumping the queue costs, and how much notice it needs.

Put a review date on the sheet. A price list with no date becomes permanent, and your wages and rent will not wait.

How do you handle customer-supplied garments?

Customer-supplied goods define contract work and cause most of its disputes. Handle them as a process, not a favor.

1. Count them in on arrival against the packing list, by style, color and size.
2. Inspect before you sew. Note stains, holes, mismatched dye lots and anything that will not hoop, photograph it and send it the same day.
3. Sew one and get it approved in writing before the run, including placement and size.
4. Sew, count out and pack to their spec, with their paperwork, and keep the records.

Difficult garments deserve a priced line rather than goodwill: terry, fleece, leather and stretch knits each need their own backing and a file built for them. If the customer sends a file rather than artwork, run it through the run time calculator before quoting, so a slow, trim-heavy file does not become your problem at their price.

Who pays when a garment is ruined?

Whoever your written terms say, which is why you need written terms. Embroidery leaves permanent needle holes, so a misplaced design is rarely recoverable, and on customer-supplied goods you are destroying something you cannot reorder.

A workable spoilage policy names four things. We publish no percentage or dollar figure for any of them, because they depend on your garments, your process and what your customer accepts:

• The allowance: how many pieces per run may be spoiled before anything is owed. Set it from your own scrap records, not from a number you read somewhere.
• What you owe beyond it: replacement at the customer's documented cost, a credit on the invoice, or free re-decoration of a replacement garment. Pick one and say so.
• What is excluded: garments that arrived damaged or cannot be hooped, a file or placement the customer approved, and dye lot differences.
• Who supplies spares. A few extra garments with every order is cheaper for everyone than a replacement claim, and it is the most useful clause on the sheet.

Most spoilage is preventable, and most of it is a placement or file problem rather than a machine one. Check the file before the first run: our file check guide covers what to look for. When a customer-supplied file is the risk, send it for a free check and we will quote a repair before you sew.

What payment terms should a contract embroidery shop set?

Contract work is credit, whether or not you call it that: you buy the thread, pay the operators and run the machines weeks before the money arrives.

• Start new accounts on payment before shipping, and offer terms once they have a history with you. Take a deposit on large or unusual runs, and on anything where you buy the garments.
• Ask for trade references and the usual paperwork: a credit application, a resale certificate where it applies, and a named person who approves purchase orders.
• Put the terms on the quote, the acknowledgment and the invoice, including what happens when they are missed, and set a credit limit per account. A customer who pays twice as slowly as everyone else is a cost, however good the volume looks.

Expect the same clarity from your own suppliers. Our trade accounts work that way: unbranded white-label files, a W-9 on file and Net-30 once an account is approved. See trade digitizing, and our price list for the flat per-design prices, from $10, that you can build into your own sheet. Digitizing is priced per design and never per stitch, so a file you order once is reused on every reorder at no further cost.

When should you turn a contract job down?

Saying no to the wrong contract is a pricing decision, and often the most profitable one available. Walk away, or requote, when:

• The quantity does not fill your heads. A 14-piece run on a six-head pays for three cycles and runs the third almost empty.
• The file is bad and they will not let you fix it. A trim-heavy, over-dense file costs machine time and thread breaks on every piece for the life of the program: see how long embroidery takes.
• The garments cannot take the design. A dense logo on a light performance knit will pucker whatever you do, and you will be blamed. See why embroidery puckers.
• They will not agree a spoilage policy on garments you cannot replace.
• The schedule only works if nothing goes wrong, or the price only works at a volume they have not committed to. Price the order in front of you.

None of that is being difficult. It is the quote reflecting the job: put the awkward parts on the sheet as priced lines and let the customer decide. The rest of the model is in the embroidery business pricing hub, and the embroidery pricing calculator runs your own rates and minimums in seconds.

Sources

• Barudan America: single-head machines (1,300 spm on flats, 1,000 spm on caps)
• Barudan America: multi-head machines (up to 1,100 spm depending on model)
• Madeira: FAQ (thread use per 1,000 stitches, stitches per cone)

Sources checked 20 September 2026.