FN2N, part 7 | Economies of Knitting Pattern Production

Image copyright Colin Harman, 2010, with some awful liberties taken by the author. Sorry, Colin.

This week’s post brings us back down to earth to talk about economies of knitting pattern production.  So far, I’ve discussed the people, design processes and quality standards necessary to create a professional knitting pattern.  I’ve intermittently covered the value of time insofar as establishing a rhythm of working and pattern release schedule, but as the saying goes, time is money.  Another way of understanding it is that time and money are valuable resources, and yet again, you will have to make decisions about how much of either you can afford to spend on quality design work.

I keep this Venn diagram close to my desk and pull it out whenever I feel fed up or frustrated.  For me, it is completely true: in any kind of creative career, you will have to pick one of the two.  Attempts to tick all three boxes result in exploitation, abuse and burnout.

You will have to be VERY realistic about how much you can earn from selling knitting patterns.  The safest and wisest option is to have a number of income streams, or set up a business model that accommodates the nebulous nature of digital products.  This is another meaty post, and there’s much more I could discuss, but I hope to have covered enough of the important points.  Please help yourself to a hot beverage, and leave comments or questions here or on Instagram if you have them; they are most welcome 😊. I’ll begin with economies of time and labour.

An accountancy calculator with brightly coloured buttons.

Fast and Cheap

If you do something quickly and cheaply, you might design smaller items with a more generous margin, which allows you to make money more quickly, or means that you are comfortable with or accepting of the fact that you might not be producing your best work in the medium to long term.  You might also design using a fixed template or formula, slotting in new ideas as they come.  However, ringing the changes on a successful product or template could get old, and your customers and supporters may get bored.  You may end up feeling jaded yourself and – worst case scenario – trapped in a fast production cycle with no emergency exit or means of reprieve.  Customer expectations must be managed.

If this model – fast and cheap – is for you, be very realistic about what you can produce and how often without sacrificing quality.  The classic advice of under-promising and over-delivering is especially relevant here, and make sure you set aside time for design development.  You may have ideas backed up in the beginning, but keep an eye on things as your business grows.  If you find yourself spending an increasing amount of time on pattern queries, it may be time for a rethink.

Good and Cheap

The good and cheap option is the best fit for designers who cannot (yet?) afford to spend money on technical editing and grading services or would rather do it themselves; or, if they can afford it, they only pay for a technical editor to look over the pattern.  Such designers do double duty as graders, can deal with spreadsheets well enough to get the numbers right, but recognise that the value of a second pair of eyes is priceless.  Most of the money they make is theirs to keep.

Many independent designers work in this way, and they would agree that pattern production is a slow, fatiguing and sometimes frustrating process.  Over time, and with impeccable organisation and diligence, the process can be sped up and proficiency improved, but mental strength and refreshment CANNOT be compromised.  The cumulative strain can be enough for some designers to switch to the final option, good and fast – but if good and cheap is the option for you, do NOT skimp on self-care!

Good and Fast

The good and fast option applies to designers who want to maintain quality standards and are able to pay for professional support and input.  If your design work includes complex items, experimentation, unusual construction and close attention to detail, professional support may not even be optional – it will be vital.  At other times, you may be the kind of designer for whom numeracy is a relatively weak point, or you simply find the editing process far too overwhelming in practice despite understanding it in principle.  Lastly, you may not want to compromise time with your nearest and dearest.  In any case, you have absolutely no trouble recognising that you need help!

Of course, the sticking point is money and how much you can afford to pay: you may be charged per hour or on a scale according to the garment type, e.g., a hat in 3 sizes is cheaper to grade than a sweater in 12 sizes.  Questions about cash flow need to be answered or at least considered carefully.  You will need to be sure of making enough money to cover labour costs as well as your time and effort designing, so having a solid customer base and/or a steady income is crucial.

46651291 – wooden little men holding hands on wooden boards background. symbol of friendship, love and teamwork

Please note that I have not included other important tasks and expenses such as photography, marketing, website maintenance, ecommerce tasks, graphic design and layouts.  As mentioned in the Three Lions post, these may be outsourced or taken on by members of the design team, but there are also many ways in which these tasks can be organised or delegated.  For example:

  • if you also have a retail outlet, and have time scheduled for product photography, you could also get your designs photographed in the same session;
  • if you have a routine for shop updates, the listings of your knitting patterns could be added to the to-do list at no serious inconvenience to you;
  • If your technical editor is also good at layouts and graphic design, their work here will be included in the final bill;
  • A friend or family member might have the skills you need, and you can do a skills swap if they aren’t directly involved in your business activities.

This is definitely not an exhaustive list, but I hope you get the idea.

I should add that the absence of test knitters does NOT necessarily mean that a pattern should be avoided or is substandard.  There tends to be an inverse relationship between the presence of test knitters and the presence of independent tech editing and grading; both are excellent for producing a quality pattern, and if you can afford to employ both, congratulations!  Otherwise, consider employing a sample knitter or two to show how your garment looks on different body types. 

Pricing

The good news about pricing is that it is within relative control. Traditional pricing models do not work for digital products because traditional accounting only really works for manufacturing, or businesses that can establish a fixed cost per unit, and an economic culture that devalues labour.  We have had more than enough of the latter on this planet.

There are several pricing models out there (this Hubspot article lists 17!), but it soon becomes clear that the only sustainable option is value-based pricing, whereby you take into account the direct costs of digital pattern production.  You have no way of knowing or controlling how many digital copies of your pattern you will sell, so it makes sense to price it according to the value of the expertise that went into it – which should be commensurate with the value that your customers will get out of it.  I am leaving design costs out of the following calculations so that nobody squeals too loudly, but please feel free to include them when working things out for yourself.  In fact, you should!

The table below details the direct costs for a sweater graded to 12 sizes (example only):

Tech editing  £250
Grading  £250
Photography (half a day, mate’s rates) £200
Layouts  £100
Test knitter’s compensation*  £200
TOTAL£1000
Example costing for a sweater graded to 12 sizes, involving a photographer friend, tech editing and grading, graphic design/layouts, and financial compensation for a test knitter.

*EDITED 18th March 2021 after kind and constructive feedback from Renata Suzuki (IG: @grankag) regarding the test knitter’s compensation, which was too low. This has been amended to include only one knitter. All other information remains unchanged.

Once you have an idea of your production costs, you can do a few breakdowns to see how many patterns you’ll need to sell at various price points.  If the cost of producing this sweater pattern is at least £1000, design work not included, then we can plug in a few different price points to see how many digital copies of the pattern need to be sold to cover these costs (payment processing fees also not included; they will vary according to your ecommerce host):

  • £5 = 200 copies (1000/5)
  • £10 = 100 copies (1000/10)
  • £15 = 67 copies (1000/15)

Bear in mind that you may not make your money back quickly, and make sure that marketing and promotion are well taken care of.  I would also advise you not to price your patterns too cheaply when starting out, because knitters will not appreciate price hikes further down the line. Tolerance of future price increases depends on your relationship with your customers, but if you have a loyal following of knitters who value your work, they will be supportive – after all, they don’t want to see you go! – and don’t be shy about asking them for help or solutions to accessibility. It’s good to talk, and transparency is always appreciated, but it is much easier to get the price right in the first place. The rule of thumb is: Once you set a price for your patterns, consider it locked in.

The numbers alone might be enough to give you pause and think about how much time and money you can devote to knitting pattern design when starting out.  I’ve used a sweater example to show that it’s normal for costs to reach four figure sums, but if you don’t yet have a customer base, the necessary funds, or don’t want to dive into the deep end (and I really wouldn’t blame you, it’s easy to be overwhelmed!), then begin with an accessory design.  Gloves, mittens and hats are a good start, especially if you have your eye on sweaters: these items will need grading, so you can get a taste of the production process and the size of your audience before scaling up to garments. Also, accessories should be cheaper items due to lower labour costs, so make sure that the price of your accessory patterns has a proportional relationship with the price of your future garment patterns.

My last point about pricing is to not base any hypotheses on the performance of one pattern; this makes absolutely no sense at all.  ‘Best case scenario’ accounting is far more common than it should be.  Collect your data over at least a year and make sure it involves at least three patterns.  You’ll then see how much of an effect seasonal trends have on your sales.  This is when you really learn about marketing and establishing relationships with knitters of your patterns, so keep talking to them!

Royalty free circle of hands illustration from depositphotos.com

As well as beautiful photography, make sure your listing includes these vital communications (again, make use of Kate Atherley’s book and talk to your technical editor and grader):

  • Images of schematics;
  • Sizing and measurement charts (ideally, include body measurements and finished measurements so that people can get an idea of how YOU intend the garment to fit – this may not match up with how knitters want their items to fit, so allow them to make an informed choice);
  • Skill level OR techniques needed for successful execution;
  • Include images and information from test knitters if they’ve been involved, or provide links to your testers’ IG pages or blog;
  • If you have relied on tried and tested sizing blocks, professional grading and tech editing, be sure to include the technical editor and grader in your production credits;
  • It’s also good manners to credit the photographer and graphics/layout designer.

These things should be part of the product listing, and indicate to a knitter that this is a high-quality pattern worth paying good money for.  Inspiring that confidence will make it easier to cover your costs, because not knowing how many units or copies of the pattern you’ll sell makes it impossible to calculate a break even point (the formula for that is: break-even point = fixed costs/sale price – variable price per unit).  Demonstrate that your patterns are worthy, and knitters will pay for them.  If you’re concerned about affordability and are unimpressed by discounting strategies, look at what some inspiring designers are doing.  For example:

I’ll wrap it up here at around 2,000 words, so thank you for making it to the end! It remains for me to say a big thank you to my mother, who works in the accounting field, and by whom I ran past some of the content here to check that I was along the right lines.  However, any mistakes are mine, and I highly recommend you check things out professionally 😉.

If you enjoyed this post and have the financial means, please consider supporting me on Ko-Fi! It would be much appreciated.

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