To answer the simplest question first, #5, I'd do binding because I could then "pre-quilt" a large section of fabric & cut to size, then bind, rather than having to individually quilt every little mug rug. Guess it depends how many you plan to make.
I would ask for that input from the shop owner and/or from guild members -- or at least local quilters. If you don't have ready access to that information, you could raffle off a free set of 4 mug rugs in exchange for people completing a short 3 question survey (you really do need to keep it to 3 questions or less or you won't get as many responses). The 3 questions I would ask would be:
1. Would you prefer mug rugs (oversized fabric coasters) made with
a) holiday fabric
b) winter fabric (snowflakes, pine trees, polar bears, etc)
c) non-seasonal fabric
2. Would you be more likely to buy
a) ones that match
b) coordinating designs where each one is different
3. How much would you be likely to spend on a set of 4
Give 4 suggestions in $2 ranges. See notes on costs/pricing below for more info.
a) $10-12
b) $13-15
c) $16-18
d) $20+
4. Any other comments or suggestions?
I would personally make sets of 4. You can always split them up if they're not selling fast enough. The shop owner should be able to help give you some basic information about the type of buyers who shop her store. Your local SBA may also be able to help with market demographics.
As far as size & pricing... that's really going to depend on what the local market, and specifically that shop's customers, will bear. If your market won't support more than $10 for a set of 4 coasters, you're going to have to keep them to 6x6" in order for them to be remotely profitable (and hopefully get some deals -- I'd definitely bind in a solid color to save money). It would mean only buying fabric that is $12/yd or less, cotton batting that is $4.80/yd or less, a single color of cotton thread & keeping construction/quilting simple enough that you can complete each rug in 7 minutes or less.
Here's how I came up with those numbers (based on 6x6" -- for 8x8, just multiply by 1.8):
Fabric for top & backing (@$6/yd x 41"W)........................ $0.34
Fabric for straight of grain binding (@$3/yd x 41"W).......... $0.15 *solid fabric
Cotton batting (@$4.80/yd x90"W).................................. $0.06
Cotton thread (@$0.007/m)............................................ $0.14
Wear & tear on machine & iron.......................................... $0.03
Disposables (blades, needles, markers, starch).................. $0.15
Durables (pins, cutting mat, seam ripper, etc -- approx)..... $0.10
Electricity....................................... ................................... $0.05
TOTAL COST TO PRODUCE 4 MUG RUGS (no labor)........... $4.08
Commission to vendor............................................ .......... $1.63
Total cost without labor............................................. ........ $5.71 (for 8x8", $10.28)
Absolute minimal labor cost for set.................................... $8.00*
*That means if you can spend an average of just 7 minutes per mug rug to buy materials, press, cut, piece, quilt, bind, deliver to the store & collect payment, you will make $10/hour.
I'd pick my prints so that I could use the same 2 colors of solid fabric to bind all of them & hopefully could get away with the same color of thread to piece & quilt them all. I buy Warm & Plush on the 25yd x 90" roll from Walmart.com, so that's how I calculated price of batting. For the quilting, I'd cut my (unwashed) fabric into sections of 36x36" and would layer, quilt, cut & then bind. I'd use SOG binding with butted corners, machine sewn front & back. Ugh. The artist in me absolutely hates that idea, but my business sense knows that it's the only way to even hope to make a profit at that price point.
Of course, if you can sell at a higher price point, there are a lot of things that you can (and should) do to entice customers to buy your product that could include anything from increasing the size to buying premium fabric (even if that's just shopping the designer fabrics at JAF) to mitering corners to possibly fussy cutting holiday motifs for each rug, or maybe even offering mug rugs with Insul-bright batting so they're heat resistant. The difficulty with each of those is they can easily drive costs as high as $24/set, leaving you with virtually no opportunity to even get paid a nominal amount for your time unless this consignment shop has a very upscale clientele. There are markets in the US for $10/coaster prices ... but those wouldn't be holiday mug rugs; I'd probably rename them "fiber art coasters" to sound fancier, and there would need to be something unique about them to attract buyers in that market. At that price point, I would definitely make every single coaster in the set different and have a couple different sets in case people want more than 4. You might design your own fabric through Spoonflower; or you could use solid fabrics, but do different FMQ motifs; or you might even paint/ink a design on them and seal it with Scotch Guard. If you are interested in that market -- feel free to PM me & we can chat more.
