Your logo is "digitized" — converted into a stitch file that tells the machine exactly how, where, and in what direction to lay each thread. The garment is hooped onto an industrial embroidery machine, which then stitches the design directly into the fabric using high-quality polyester thread.
Digitizing is a one-time cost per logo ($60 per location). Once your logo is digitized, every future order using the same logo skips this step and just pays the per-piece embroidery cost.