Is the digitizing industry in the West doomed?

Hi Marc...

I have been member from many years on this forum and seen prices of many companies....We came down from $3/1000 to $1.5/1000 stitches.

I have also offered Flat prices but those does not work if you are a company.

Marc it is obvious with the advent of the internet and advanced digitizing software it has allowed foreign digitizers to easily tap into our market. A dollar to them is like ten dollars to us. I as well remember when punching was much more time consuming and the internet was just a baby and designs were recieved on floppies.

I really do not see how anyone in the western hemishpere can compete and make any real profit, unless they are living for free in moms basement and working with pirated software.

That brings up another point I am pretty sure the majority of foreign digitizers are using pirated software to start with.

I agreed with the western digitizer doomsday 10 years ago, I was afraid the sky was falling on my skillset so we ventured out to diversify. But I was wrong and now I think the market has pretty much stabilized and prices will only go up as the standard of living (read inflation) hits the rest of the world. I also think that pricing is a self fulfilling prophecy. If you offer 1.00 per thousand designs then you are going to get people who are only price driven. if you mess up, no problem, they are only going to go with a competitor with 1.00 pricing... they are NOT going to go with a higher priced option, they don't see the value in it or the value in having a relationship with a digitizer, it is just a commodity. Besides, if you have higher pricing you don't need as many designs for the same money.
We have not raised or lowered our pricing since opening over 10 years ago as an online digitizing service in America. And it is hard for us to keep up all too often.
This is my 23rd year of digitizing.. going all the way back to Melco Digititrac and paper tapes...

HOW TO FIND THE RIGHT DIGITIZER

* collect as many email addresses of digitizers all over the world (atleast 15-20)
* choose a design which has a complex side with small text, maybe gradient, etc which covers most of what is found on majority of the designs
* prepare an order template with all details
* put a note that this design is being emailed to several digitizers and the best one will be chosen
* dont blind copy the email addresses so the receipient can see the others and know its genuine
* send that same design to all the 15-20 digitizers with the same instructions

RESULTS
* you will be surprised how many of them will actually follow your instructions
* discard those who didn't follow your size stated right away because thats the most simple thing to follow
* sample all the designs and make notes for each one (how it ran, number of stitches, etc etc)
* make note of how long it took them to turnaround the design to give you an idea

I know this will be time consuming but in the long run, you will save money and find a satisfactory digitizer that you can work with.

ALL THE BEST!!

In my views, lots of these change happened due the fact that western embroidery companies demanded those prices due to the economy change and to be competitive in business.

I have seen that companies mention that other company offer them this prices in USA itself (if i can offer low, or whats they will benefit if they send business to me). Not long time ago, i was charging $20 Flat Fee or $2.5 Per 1000 Stitches.

Many of us have to change price due to demand or they will go elsewhere.

As for offering Free Design, It helps the companies or embroider shops to test the quality of digitizer (without spending money) and make correct decision. Why i started to offer two design free because they ask for more free design to check quality. Here i would like to mention that although many who takes free design are not the real who comes looking for new digitizer, they just take free design (because its being offered free), it does not mean that they will send business to me.

Here point is that provider will have to change as per demand of the market otherwise no body likes to do design in lower prices and offer free samples.

I work as a part time digitizer in Toronto and the pay is not enough for this kind of work. I don't see myself doing this after college. No job security whatsoever.

We paid roughly 10,000k for our original software many years ago and it included a computer. I now have Wilcom ES6 and that ran 5,000k roughly.

I would bet there is a pricing structure for developing countries and it is not for the sake of compassion but for the fact there is a huge quantity potential. And i am still of the opinion pirated software is rampant in digitizing software in foreign countries.

I think it is rampant everywhere now, not just in foreign countries. Too bad there is not some sort of licensing or accreditation program. The last ISS show I went to I saw an embroidery machine salesperson standing in the aisle asking anyone he could: "do you have a garage or a spare bedroom? if so you need an embroidery machine! you can make tons of money!!" so goes digitizing. Especially in this economy, hey, I have a computer why not work from home, digitizing MUST be easy if it is so cheap and you don't need any "real" training.

I'm not a digitizer, I'm an embroiderer. I'm new, 2 years in. I've learned a ton in this short time,,,and this forum is one of the best sources of info and experience I've found anywhere. My biggest compeitition is people just like me,,,,really small timers, trying to learn and make a small business for themselves and have someting that is worthwhile when I retire.

But,,,,,

I don't care if your software is $5 or $50,000. That's your issue, not mine. It's your investment,,,,you have to decide if it's worth it or not. If you expect me to pay you $50 because of your investment, when I can pay $15 for the same quality, and quality is in the eyes of the customer which is me, then I'm going with $15. I'd be a fool not to,,,particularly if MY customer won't pay the higher digitizing fee or I can't absorb it into the sale.

It doesn't matter if you've been in business 2 months, 2 years, or 20 years,,,you have to adapt to the market today,,,or you're lost and will be out of business. I'm learning that more and more each day.

Digitizing is one industry that has no boundaries due to the technology of the internet,,,it's instantaneous. Your bound by only the different time zones. We all know that.

Digitizing in the west isn't doomed,,,,,for those that are willing to adapt, overcome, and stay the course.

Robert Young mentioned above that it was too bad there wasn't a licensing or accredition program for digitizing,,,,but actually there is IMO. It's the free market itself. The good and fairly priced digitizers will win out in the long run, the low or bad quality and service will eventually disappear.

Great thread here,,,,keep it up.. I'm just a rookie voicing my opinion.

What I mean is that my job could easily be outsourced.

I feel that while an accreditation program would look good on a web page or business card, and the person could be proud to publish that they are certified, most would look at it as a way to raise their prices just because of that certification. Just my opinon. In this industry, it would only be as good as the individual that claims the certification makes it.

I didn't know about the software piracy issue concerining embroidery,,,,I'm sure there's one out there. As well, how would you know if someone is using a pirated software for digitizing? I mean that sincerely.

I do agree that some of the fly by nighter digitizers will pass on,,,but, those that stay the course and maintain their lower pricing struture will continue to be a force. Should pricing become an issue again as you say it was several years ago, you'll have a whole new bunch of the lower priced digitizers, and the cycle will start over again.

The industry, as it is now, won't support digitizers that charge $25 and up for a mere 6k logo,,,,not for long anyway. I'll have to wait for time to prove me wrong on that one.

And the big embroidery/garment houses,,,,they're already seeing results of the down economy,,,lowering prices after they just raised them, fewer and fewer companies buying decorated items, as their is no budget for them. When these "big boys" offer me incentives to buy from them, they must be desparate.

One more and I'll hush,,,,,,

I've gotten several orders lately thanks to the promo companies sending out catalogs to business's offering decorated clothing as well as promo items, such as 4imprint and others. Once the customer looks into the fine print, such as minimum orders, logo charges, set up fees, etc, they'll call me and I can offer the lower quantities for less than the larger companies can for sewn items. I do lower my pricing a little, but for every time I've done this, I've gotten a repeat customer.

Pirated digitizing software is rampant in other developing countries, someone said its the same here but that is far from the truth. The reason is is common in other countries is because they have nothing to lose and zero government control. In this country it would be unwise to run a $5,000 piece of pirated software at your company, if caught you can be sure to be punished. In China the Government condones it. It is not hard at all to source pirated software but it is hard to get away with it in this country.

Wilcom I believe has a system to verify if a person is using a licensed copy of their software, I wish I could confirm any digitizer that what they are using is bought and paid for.

This sort of goes back to another thread somewhere on here about giving discounts or value pricing for large volume customers, versus the smaller client, or much smaller client.

If a digitizer has been around that long, I don't feel that they have been charging these huge fees to their best and high volume customers all that time. And in this market and this economy today, everyone is looking for a better deal, no matter how big they are.

Widners is right Robert, we don't know your fees, so it's not right to assume you're one that does charge $10 per K. If you do, and can, WOW!! If not,,,fine too. Either way, the customer will decide what they pay.

There's a lot I don't understand about digitizing, but I'm learning. But I do know good and bad digitizing, and value as well. I feel I've found a medium for my business, and I'm very satisified.

On the software piracy issue,,,,it's not a surprise, but, I hadn't thought about it in that context before.

Great thread,,,,very informative and honest posts.

The one good thing about the current economic climate is that it shakes the trees up and the ones that should not be in this business all fall out, as you said above mainly the ones that took advantage of the easy credit, with out credit and customer support they are the first to go. Us that are financially sound and have solid customer base have weathered the economic climate just fine, in fact business grew and new equipment has been purchased.

I agree Inkman996. Seems the economy here changed immediately at the start of 2007. It was a game to see if we could cut expenses as fast as revenue fell and we were fortunate enough to have empty lines of credit and relationships with actual bankers that helped us through the worse of it. Here it is nearly the start of 2012 and we are seeing the ordercount on a definite upward tick. In the past 5 years many have shut their doors.

Mr Young and inkman996, I would be sincerely interested in what level of the business that both of you are in. There's so many variables that it would take too long to list all of the possibilities, maybe corporate owned or independent would be two of the basic groups.

Mr. Young has been around for some time as I've read in his posts, but I haven't read about inkman, or possibly overlooked his info. Nothing too personal of course, just wondering, in general.

The reason I ask, is that you both draw from your experiences, and seem to have been around when the market was much smaller than today, 15-20 years, and watched it expand to it's present state. And while we must learn from our history, we must plan our future on past history lessons. That said, as the internet became more widely used from the 90's into the 21st century, particularly the promo item and decorated apparel market, it obviously opened it up to inexperienced new operators, that lacked any overall experience at all, and basically used the "full faith and credit" of any available lendor willing to risk their borrowing all the money to start their business and throwing caution and business sense to the wind.

I guess I'm somewhat in that boat, new and inexperienced, except that I am totally liquid in my venture. My goal is to learn as much as possible about the industry before I retire, and then have something to keep us going with our business when we decide to retire. Maybe not as much as a livable income, but rather something to keep us busy, make enough money to pay for traveling to shows and such as many are in good travel locations, and provide a service and product for customers on the smaller end of the business, such as 6-18 items for embroidery or small transfer orders or the smaller promo item orders. We want to expand our services to DTG as well as cutting also. And who knows what future equipment developments will come out in the next decade!

Keeping our personal goal in mind, and in line with the thread topic, the new and lower cost digitizing industry that is in place now is completely in line with our business model. Lower priced digitizing, good quality digitizing (it's out there, and we've found several), and more small operators such as myself with the same end result in mind. I could say it reminds me of the earlier days when the farm co-op's were formed,,,small business supporting small business.

I don't think that western digitizing is doomed, it's just going to have to have a gut check with the rest of the world, and the industry.

Hope this made sense to you,,,it did as I typed it. I hope I got my point across.

As for me I have been in the industry for over 15 years, both on production side and supplies and equipment side.

I have personally seen the industry change mightily and can with out a doubt attest to the internet being the game changer. I am not against foreign digitizers what so ever just the fact that it is unequal between the west and east in so far as cost of living and rampant piracy. A lot here ignore the software piracy issue mainly because they them selves never had to go out and spend many thousands of dollars on software required to do what can either be bought dirt cheap today or hacked. IWhat i would love to see is the digitizing fees balance out between the two hemispheres and people can then go back to choosing a quality digitizer over a cheaper one.

I'm new here and found this site while looking for digitizing software. Just last week I paid $70. to a company to digitize artwork provided to me by my customer. The stitch count about 14,000. I had used the company once before in the Spring and took advantage of their "1st Design Free Promotion". The company I used is located in the US but I never thought to ask if the actual work was done here or offshore. Regardless, I thought it was a reasonable price and they did a nice job.

I'm sorry, but $70 for a 14k design is high,,,,was it a huge volume customer order or a small one, say 25 items or less, if you don't mind me asking. Did the digitizer quote a price to you before you agreed, or did you just tell them to do it and pay whatever.

Could you elaborate on the design and specifics compared to the digitizing costs?

Did you just charge the customer the $70,,,,or absorb it into the sale?

Maybe I'm totally spoiled,,,,,

Well if it is doomed it definitely is NOT doomed right now! We have just had our busiest week in all of 2011 and 2010! We do not advertise and our website is not optimized. I think the only way you would hear about us is through word of mouth. And I am NOT the easiest digitizer to work with, self admittedly... I do not believe the customer is always right but I do believe as long as I do the best I know how to that things will work out.... There are still plenty of clients out there, embroiderers and distributors alike that do not value price over whatever other value they perceive we offer. Hopefully those values are real and they know we appreciate their work.
There is one major difference I am seeing this year compared to EVERY year since 2006... and that is the number of jacket backs being ordered. I chart lots of aspects of our business... x bar and R charts, anything I found useful from our ISO9000 training years ago... and this year we are seeing an abnormally high volume of jacket backs so early in the season... Usually we get the most concentration of back logos at the end of Feb and throughout March... but this Nov we had more then all of last season combined!!
I suggest companies are finally starting to spend their promotional dollars again. Small companies that have weathered the economic storm so far are seeing the value in embroidered products again and large companies are finally having budgets for items and it is the time of year for them to spend it or lose it in next year's budget.
So for now the digitizing industry in the West seems to be on the uptick and I think that is GREAT news for 2012!
Your thoughts?

I agree Robert, with as far as being busy. My single machine has stayed busy since Halloween. And, for me, the sweat shirts and hoodies have tripled. Blankets have been a big thing for me this fall, and I have orders for christmas for all of them. School logo (local) with embroidery is also doing well,,,,instead of the screened T shirts from last year.

A tire store and bank ordered from me, and said "they wanted to give their employees something that would help them every day, and still advertise their logo,,,,hence the fleece.

I wonder if companies have the promo dollars, or, instead of giving the previous bonus' and other things, they're giving these type items instead,,,,and using the economy as an excuse to keep their cash. In our area, local business owners keep as much as they can for themselves, and only give what they have to to their employees. But we're very rural,,,so that may have something to do with it.

And, as long as you have your clientel that keeps you going, that's all that matters. We'll all find our niche', and go from there.