Etsy is perhaps the most popular online market place for those producing arts and crafts for sale. Asking what to charge is impossible for us to answer. It depends on way too many variables, not the least of which is your own opinion.

That said, it's typical for most font licenses to have a clause that if one is primarily selling the typeface as the product, that the standard license doesn't apply. So you'd certainly be in the norm asking for a custom license for this use.

I am thinking of charging her the base $25 license fee, plus a commission (don't know what, as she hasn't said what she planned on charging) from every sale. If the third party wishes to use the embroidery font for commercial reasons, I'd like there to be contact information so they can pay me the remainder of the license fee.

Would that be too much? Or should I just forbid commercial use on the third party's part whatsover?

If the font is being embedded in an embroidery application that will be resold and loaded into computerized sewing machines, you could charge a flat license fee, which would eliminate a lot of royalty “paperwork”. But you would need to have some idea of projected sales.

It’s not much different than licensing a font for use in an app for digital devices that output to a screen, only this outputs to fabric.