T-shirt sites based around submitting tshirts for cash such as Threadless.com have been around for a while now. There are pros and cons to submitting your designs to these contests so its important to do a bit of research and decide what matters most.
The Pros of submitting to tshirt competition sites is that you can make some nice money and get some exposure as an artist. For Threadless alone you win 2500 if your shirt is printed and 500 for a reprint. You also will win respect from your fellow Threadless contestants and designers. The negative is that you have given your design away to Threadless and they now have the rights to it. It is possible that your design is worth much more than 2500 dollars on the open market. Also in terms of branding giving away designs may not be the best of ideas. Do you really want another website to have credit for the design you worked so hard on? Giving away a design to a tshirt competition site is giving away your work for free. Would a lawyer do work for free in the hopes of landing a client in a competition with a bunch of other lawyers?
Another great reason to enter a t shirt design competition is the networking opportunities involved. There are many talented artists that enter these competitions and it is common for these artists to sometimes collaborate or pair up together in the hopes of taking down the big cash prize. Even if you lose pairing up with an extremely talented artist can pay off down the road on another project, or you may learn a different distinct style of designing t shirts from your partner. Of course offering some unique skills to your contest partner is a must. Those that collaborate in t shirt competitions often form very strong business associations or friendships.
Entering a tshirt competition may be a great idea though if you have cool designs and are short on cash. Getting printed could put that extra money in your wallet that you could use to start building a t shirt empire. You could use that money to buy tees in bulk and for screen printing fees etc. If cash is not a problem then keeping your designs to yourself and building your brand should probably be the focus. Create many classic tees under your own label and the buzz, accolades, and sales will likely follow.