Equipment Amortization for Textiles: Calculate ROI on Looms, Dyeing Vats, and Spinners

A floor loom costs $2,000-$8,000. A dyeing vat costs $500-$2,000. But what's the true cost per piece you weave or dye? This guide teaches you to amortize equipment costs accurately and price your products profitably.

The Amortization Framework

Equipment isn't a one-time cost—it's spread across every product you make. Here's how to calculate it:

Formula: Equipment Cost / Total Production Hours = Cost Per Hour

Step 1: Equipment cost (new purchase price)

Step 2: Estimated lifespan in hours (typical: 5-10 years of regular use)

Step 3: Annual production hours expected

Step 4: Divide equipment cost by total lifetime hours

Result: Equipment cost per production hour

Example: A $3,000 floor loom expected to last 10,000 hours costs $0.30 per hour of weaving.

Equipment-Specific Calculations

Floor Loom ($4,000 investment)

• Expected lifespan: 15,000 hours (10+ years at 10-15 hours/week)

• Cost per hour: $4,000 ÷ 15,000 = $0.27/hour

• Typical scarf: 4 hours weaving = $1.08 loom cost per scarf

Should be included in pricing

Dyeing Vat/Equipment ($1,500 investment)

• Expected lifespan: 10,000 hours (8-10 years of regular dyeing)

• Cost per hour: $1,500 ÷ 10,000 = $0.15/hour

• Typical dye batch: 3 hours (heat, apply, fix) = $0.45 per batch

• Per scarf (using 1/10 of batch): $0.045 vat cost

Negligible per piece, but add up at volume

Spinning Wheel ($800 investment)

• Expected lifespan: 8,000 hours (hobbyist to semi-pro use over 10+ years)

• Cost per hour: $800 ÷ 8,000 = $0.10/hour

• Spinning 100g yarn: 1.5 hours = $0.15 equipment cost

Modest cost, but adds up if spinning high volume

Building Equipment Costs Into Your Product Pricing

Here's a complete pricing example incorporating equipment amortization:

Handwoven Scarf Pricing (Complete)

Fiber cost: $15

Dye cost: $3

Labor: 5 hours @ $45/hr = $225

Equipment amortization: (Loom $1.08 + Dye equipment $0.10 + Wheel $0) = $1.18

Overhead (10%): ($15 + $3 + $225 + $1.18) × 0.10 = $24.42

Total cost: $268.60

At 40% markup: $375.64 retail price

Key insight: Equipment amortization is usually 1-5% of total cost for high-labor crafts. Don't ignore it, but labor and materials dominate.

Key Takeaways

✓ Calculate equipment cost per production hour: Equipment Cost ÷ Lifetime Hours

✓ Multiply hours used per product × hourly equipment cost to get per-piece equipment cost

✓ Include equipment amortization in your pricing formula

✓ For high-labor crafts, equipment usually costs 1-5% of total product cost

✓ Track actual usage hours to refine your amortization estimates over time

Calculate True Equipment Costs

TrueCraft tracks equipment amortization and production costs automatically.

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