Every new embroidery design has to be digitized — converted from artwork into a stitch file your machine can run. Whether you do it yourself or pay a digitizer, it costs time or money, and it's a one-off cost that doesn't depend on how many items you stitch. That makes the question of who pays for it surprisingly important. This guide shows how charging or absorbing the digitizing fee changes your profit at different order sizes, with worked numbers.
Should you charge customers for embroidery digitizing?
Charging a one-time digitizing fee on the first order is a common and fair practice, because digitizing is real work that doesn't scale with quantity. Absorbing it can make sense on large orders, where the cost is spread thin, but on small orders it can take a large share of your profit.
How much does absorbing the fee cost you?
Using a $40 digitizing fee, $20 per item (8,000 stitches at $1.00 per 1,000 plus a marked-up $8 blank), $0.75 of supplies and 3 minutes of labor at $20/hour per item:
| Order size | Profit if customer pays digitizing | Profit if you absorb it | Share of profit lost |
|---|---|---|---|
| 6 items | $61.50 | $21.50 | 65% |
| 12 items | $123.00 | $83.00 | 33% |
| 48 items | $492.00 | $452.00 | 8% |
On a 6-item order, absorbing the fee wipes out almost two-thirds of your profit. On a 48-item order, it barely registers.
What's a sensible digitizing policy?
Many shops use a mix:
- Charge digitizing on first orders under a certain size, where it would otherwise eat the profit.
- Waive or absorb it on large orders, as a way to win the job without cutting your stitch rate.
- Never charge it twice for the same design. Keep the file for re-orders, and make that a selling point: "no setup fee on re-orders." Decorators who charge a setup fee generally bill it only once per logo and don't charge it again once the file exists, unless the design itself changes.
Whatever you choose, state it clearly on your price list so customers aren't surprised.
What about re-orders?
Re-orders are where digitizing pays off. Once a design is digitized, the next order uses the same file, so you have no digitizing cost at all. If you absorbed the fee on the first order, the re-order is where you earn it back. If you charged for it, re-orders are simply more profitable.
Keep a tidy library of customer files so re-orders are quick to quote and set up.
Who owns the digitized file?
It's worth deciding and writing down. Some shops treat the stitch file as their working file and provide it only for an extra fee; others hand it over once the customer has paid for digitizing. Either way, clarify it upfront, especially for customers who might take re-orders elsewhere.
Should you digitize yourself or outsource it?
If you digitize yourself, the fee pays for your time and software. If you outsource, it covers what you pay the digitizer. Either way, include it in your costs for the order so your profit figures are honest. How much to charge for embroidery shows the full quote and cost breakdown.
A related guide covers measuring profit per machine hour.
