Posts Tagged ‘t-shirts’

Fastest start-up in history?

May 26, 2009

I love this tale from Aussie blogger Ben Rowe about setting up a new web-based business. He went from conception to execution in 4 hours at the cost of $25 (not including labour – but it was a Friday evening, so probably free).

Tweet My Tee twitter shirt ben roweHe taps into several staples of the web 2.0 zeitgeist – Twitter, t-shirts, outsourcing and tailored e-commerce.

His idea? Printing twitter posts onto t-shirts. Or, in fact, coming up with a neat design for the shirts and getting someone else to print on demand if an order comes through.

There doesn’t seem to have been any orders yet, so it remains to be seen whether this is a viable business (although there haven’t been many expenses yet anyway).

Ben has also noted that it turns out he wasn’t first to market. Will first mover advantage squash him?

Or will the market power of the existing on-line t-shirt giant Threadless see them win out with this little diversification/product-line extension?

What can Ben do to achieve a sufficient point of difference in the market?

Pacific gets pretty specific

February 26, 2009

Big news down under this week has been the announcement that our largest clothing/textile firm is shutting down its local manufacturing and shifting all such activity offshore, principally to Asia. Pacific Brands which controls a huge portfolio of household names in Australia, has conceded that it can’t compete with lower cost environs.

bonds-singlet

At the same time it has indicated it will be paring back its range of offerings very considerably, as it has a very unbalanced portfolio. The top 20 brands make up two thirds of sales, the Top 10, 49 percent, the Top 5 a third. More than 200 make less than $0.5m a year each.

It has been asked what the impact of the current financial crisis will have on firm boundaries (i.e. how far they stretch themselves in terms of range of products and activities). Pacific Brands look to be reducing their extent of horizontal reach (or perhaps their extent of duplication within existing product markets). Carrying slow-moving product is a lot harder to justify when your financiers are looking over your shoulder and are nervous about debt levels.

yakka-shortsWhat is missing in the above linked discussion about boundaries, is the actual physical dimension – namely whether firms might be more or less likely to redistribute activities in the current climate. It would seem Pacific Brands have been contemplating this shift for quite a while. Australia has been pretty ruthless in cutting protection of the textile, clothing and footwear industry (although there was a stay on proceedings for a few years), and the firm can now very easily bring in overseas product. The rapid drop in the Aussie dollar during the crisis could have justified a delay, but it would be simply postponing the inevitable. It may well be a good time to lock in any necessary asset purchases, supply contracts and the like in Asia as firms there also deal with high uncertainty about some of their key export markets.

Such relocation to a substantially lower cost location could be seen as a de facto substitute for the sort of vertical specialisation Lien predicts. The firm might be more comfortable substituting one hierarchical governance arrangement with another, even if the new FDI-driven one is presumably more complex, rather than taking on the vagaries of market transactions (especially as the latter will shift in nature as the economy inevitably recovers).

I will keep an eye out for more instances of substantial readjustment of firm boundaries in these tumultuous times. Feel free to share your examples too.

From Threadless to Shredless?

January 13, 2009

This post was prompted by one from Steve over at Startup Blog. He suggested that surfwear (in particular board shorts) might be a fertile product market for a Threadless-like innovation.

For those of you unfamiliar with Threadless, it is a crowd-sourcing community where designers load up prospective t-shirt designs which are voted upon by the public with the most popular then made available for sale through the same website. There is an excellent discussion of its growth and appeal here. The firm has been a huge success. Based on the numbers mentioned in that article, the site is selling upwards of 5000 t-shirts a day, at a margin of 33% or more.

 

The business model makes an enormous amount of sense. Each new design has a limited run and has already been tested with the likely consumers (i.e. they have voted for them). The basic inputs and production processes are very standardised (blank t-shirts, screenprinting) while the more costly input (designs) have been sourced out to providers who are prepared to do the hard work on spec (presumably because the exposure to consumers, or community, happens whether or not their designs are winners).

As with e-commerce generally, the firm saves big bucks by not needing/supporting a “bricks and mortar” retail and distribution network. It also avoid most marketing costs through that wonder of community-based websites – word of mouth.

Here’s a video explaining more about Threadless:

So turning to boardshorts, could a similar model work?

boardiesIt certainly would need a lot of tweaking. I have no doubt that folks could come up some great and innovative designs and outperform the folks at Ripcurl, Billabong etc. But the issue is more to do with the business model.

Boardies are typically made from a microfibre polyester which is much more difficult to screenprint onto than cotton. Any design competition would probably need to be for the fabric print itself.

Now this is not impossible. There is at least one site that runs such a poll – Bonbonkakku. And Spoonflower offers custom printing. But, again, both are onto cotton, not polyester, and neither seem overly cost effective.

Running with new fabric designs as part of the model seems highly problematic, as this would necessitate large product runs, meaning the site would need to bare the risk of excess stock (and thus push up prices to protect against this risk). It would require a certain level of scale (in terms of consumer awareness, exposure) to be viable too. This contrasts with the much more scalable Threadless model.

Alternatively, the model could work around a palette of available fabrics and generating innovative patchwork style designs. This would require the firm to have access to good assembly (i.e. sewing) facilities. And the pool of prospective designers would presumably drop now (requiring a more specialised set of skills), and site would need to develop some capacity to communicate candidate designs effectively (3D rendering?, rotating images?). The big danger is that the market for these patchworked shorts might be much smaller too (surfers don’t usually want seams that rub).

As you can see, I am intrigued by the prospect of adapting the Threadless model, but I am not certain boardshorts are the right product. I am keen to hear your feedback. What have I missed in my discussion? How could this work more effectively?

Single-minded business to a T

November 19, 2008

I saw an excellent interview last week in the Melbourne street press with one of the founders of the T Bar retail chain (unfortunately I lost the magazine – I think it was City Weekly – and it isn’t available on-line). Anyway, to paraphrase it went like this:

What do you sell? T-shirts

Are you going to expand your range to other items of clothing? No

This is a fantastic example of a focused business strategy. This firm is not trying to be everything to everyone. Instead it is sticking to what it is good at and what it knows attracts the customers.

The picture (left) shows the layout of their typical stores – its t-shirts, t-shirts and nothing but t-shirts. The firm can focus its attention on its core capability – sourcing exciting new designs, and finding new locations for their stores, which (as my clever cousin pointed out over coffee) would be very popular with shopping centre owners as they are typically plonked in previously non-retail space (dark corners/walkways etc).

See another pic and some brief words from the founder at this other blog discussion (she also explains that they have no web presence…yet).

The International BS Book Club

October 15, 2008

I have just finished reading a fascinating book on international business which you may find highly relevant and thought-provoking. It’s be a US economist Pietra Rivoli, and called The travels of a t-shirt in the global economy: an economist examines the markets, power and politics. The book explores many issues of interest to readers of this Blog.

Rivoli explores the emergence of cheap t-shirts from China and elsewhere, and the companies, processes
and supply chains behind this story. She explores why the t-shirts are so cheap, why the US can no longer compete in the market, and how the politics of trade have shaped firm behaviour. Rivoli goes right back to the 18th and 19th century to explore how the US usurped Britain as the dominant player in this industry (and also how Britain wiped out India as a comptitor before that).

Rivoli explores the incredible technological innovations that have kept US cotton growers competitive, but argues that clothing manufacturing has been less successful in recent years, losing out first to Japan, then Hong Kong, Taiwan and now China.

She heads to China to see what the factories look like there, what work in the factory means to young Chinese women and to explore the entrpreneurialism involved in building relationships with the big buyers of these products. Rivoli argues that China does have huge advantages because of labour laws and because of the enormous population of available workers.

She also finds that China is limited in its success by very effective quotas that limit the amount of textiles that can be exported to the US. These quotas have lead to expansion of t-shirt manufacturing in a range of countries including Mauritius, Bangladesh, Honduras, Vietnam and Pakistan. Rivoli highlights the enormous bargaining power of US senators and congressmen in influencing the quota levels and the extent to which the US uses these quotas as a bargaining chip in negotiations with a wide range of countries. Only now in 2008 are some of these quotas finally being removed allowed freer trade in some clothes into the US.

A truly fascinating section near the end of the book looks at recycled t-shirts (and clothing more generally). Here the US is a net exporter and provides a huge amount of clothing to developing nations. The markets for these goods is much freer and the goods are highly idiosyncratic (she refers to them as snowflakes as new used t-shirt is the same). The stories of marketplaces in Tanzania showcase some fantastic entrepreneurship and innovativeness.

US National Public Radio provides some (print) excerpts from the book and some short (audio) interviews with participants:

Excerpt One: “How Student Protests Sent a Business Professor Around the World

Excerpt Two: “Texas Cotton: Farmer Profits at Every Step” and the Radio Segment (click “Listen Now”)

Excerpt Three: “The End of Quotas and Rise of China” and the Radio Segment (click “Listen Now”)

If you want to get a nuanced, balanced insight into one startlingly complex industry and its international machinations, this is a great place to start. There is also a book about underpants out there which I haven’t yet read.


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