Is Custom Digitizing Profitable?
For some it may be. Large offshore companies that offer custom digitizing have been around for some time. They have many employees that are most likely paid very little for their labor. The term “sweat shop” comes to mind when I think about it. Most of us would never consider working for such low wages.
Small domestic digitizing shops may be able to make money, but they will have to offer cut-rate prices to compete. Doing so means a lot of working hours for very little return. Charging what their time is really worth probably won’t land them much business. If they do it as a hobby rather than an actual profit oriented business it doesn’t matter. They can have fun and make a few extra dollars in the process.
For a period of time we offered custom digitizing services as part of our business, but we soon learned that it wasn’t at all profitable for us. In 2005 custom digitizing accounted for only 15% of our business for the entire year. The shocking discovery was that 60-70% of our time had been devoted to it. This meant that only 30-40% of our time was being devoted to 85% of our business. It wasn’t difficult to see how out of balance things really were.
In addition to time spent doing the actual digitizing, considerable effort went into getting the answers we needed from the customer before beginning work on a design. Often the customer was inexperienced and had no idea what they really wanted. Either that or they failed to convey to us some necessary details. Even asking all the right questions didn’t always help. It wasn’t uncommon to send a completed design to a customer only to find out it wasn’t what they had in mind at all. Of course this meant making major changes or redoing the design completely.
Occasionally a customer would send us photos of their sew outs accompanied by coverage, outline or registration complaints. The pictures they sent looked nothing at all like our sew outs. In almost all cases their problems were due to improper hooping and stabilizing techniques, but we still had to spend extra time helping them get it right.
Early in 2006 we made the decision to pull the plug on custom digitizing entirely. In many ways we enjoyed this work, but it simply wasn’t profitable. Based on the amount of time spent versus income it was an easy decision to make. Giving up custom digitizing gave us a great deal more time to work on our own designs as well as other aspects of our business having a greater return potential.
If you are considering offering custom digitizing services, give it some serious thought beforehand. Understand what you are getting in to. Make sure you know how your charges will be calculated and if those charges will allow you be both competitive and profitable. Much will depend on your skill level and how fast you can complete a design. Don’t forget to allow adequate time for test sewing each design as well as the cost of your supplies such as thread and backing.
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