Tees In A Pod: t-shirt business

Showing posts with label t-shirt business. Show all posts

Saturday, September 25, 2010

Pitfalls of PODs

When considering the pitfalls of using a Print-On-Demand service provider, it's important to identify the perspective we're approaching the question from. The first kind of customer is the shopper looking to self-create a product for themselves or as gifts. To these customers, POD services are flawless and offer an opportunity to create unique items at affordable prices. The second kind of customer is the designer/artist/photographer who sets up shop with a POD in order to deliver their creativity to the world. This is where we start to see the "Pitfalls of the POD", particularly when compared to the online t-shirt competition who are doing it all independent of POD services.

MYTH OR NOT...?

1. Quality of t-shirt printing isn't as good as screen-printed t-shirts
In some cases yes, and in others no.
I've bought a number of t-shirts in my 30 odd years and from my exposure to tee printing, this myth is debatable. POD printing on light apparel is on par to that seen on light shirts by screen printers; and in some cases I've received a tee bought online advertised as "screen printed" and I've been more than disappointed with the printing quality. It's true that POD printing on dark t-shirts is still being developed and there are some pitfalls to the process used; one being that in most cases you can not print colours directly onto dark apparel tees. That said, some POD services do offer some unique printing options. Skreened treats colours such as their Galaxy Blue (a nice rich, dark colour) and red as light apparel (Cafepress, for instance, do not), allowing for a nice black design printed directly onto the fabric with a great result. Some other PODs offer specialty types of printing processes with Spreadshirt and ShirtCity delivering flock (felt-like) treatments and more on tees.

2. Tee profits made using a POD aren't as good as when you're independent
On first glance, it would be easy to say that this is true. However...
If you consider the result of a sale which has reaped both a royalty (mark-up) and a referral payment (which is possible through PODs such as Zazzle - 15% referral; and Skreened - 10% referral), then factor in the time you've saved by having that POD service provider pack and ship the order, plus any added extras (ie, envelopes), then a final per tee profit may not be far away from what some independent online t-shirt businesses earn from a sale. You also do not have the risk of upfront costs nor will you ever need to write-off stock as a loss. That said, there is most definitely more selling at a lower profit margin seen when using a POD than matching profits to an independent sale. It is also difficult to match some of the competitive prices online whilst still making a profit.

3. T-Shirt print areas aren't as good as that available through screen printing
True. Print areas are restricted to POD specifications. However...
Not all t-shirt artwork/concepts require the same unlimited print area as screen printing and there are many shoppers who are not looking for a FULL t-shirt graphic. If you fit in that category, then this won't restrict the level of sales you can see online. You can also argue that POD print areas are actually very good with various options available to shopkeepers. For instance, if your design style is linear (panoramic in shape) then Zazzle's 14" width comes close to a maximum screen-print area anyway (without going over the seam that is); or if you can identify areas of your design that can be separated into 12.8" x 12.8" print areas you can use Spreadshirt's option to combine two artwork files to fill most of the t-shirt. Some PODs will also offer printing on the reverse side and/or printing on sleeves, giving designers the flexibility to build graphics all over the tee. However, you'll never be able to achieve a wrap-around tee print using a POD service.

4. The POD has the last say with YOUR customers
TRUE.... For the majority of POD services.
Consider the phrases "to have the last say" and "you're only as good as your last job" - there is something to those statements. All the effort shopkeepers put into making an online sale is devalued once the customer receives their order in envelopes branded by the POD, accompanied by promotional material for that particular service provider. This is the biggest pitfall I see when using a POD, for in the final moments of a sale (or even a giveaway) your customers will always read or see something relating the POD and not to your store. There are exceptions, with Spreadshirt providing unmarked packaging plus shopkeeper invoices when you pay for their premium service. Printfection is another POD who will ship items to your customers in unmarked packaging.

Above: Examples of POD packaging & extras.
Photos from http://pointclickapparel.info/. Visit the website to view other examples.

I believe the issue is a continuation of from where the POD came - humble beginnings, where companies such as Cafepress started with just one tee, two mugs and a mousepad (not unlike a print-on-demand store set up in a mall). There was a necessity to promote themselves and they did it well. As those frontier PODs expanded and the landscape changed, they simply continued to operate as before; leaving us with the problems shopkeepers find themselves with today. How does one get a POD to change when they're hand isn't being forced to do so (we need a POD union! The IBPU - International Brotherhood of Pod Users!). It will be interesting to see what other PODs will offer in regards to this aspect of their service, and as a Facebook fan of ours, Rick London, stated when we shared the post How to Market your Brand - 9 Marketing Tips and Ideas, "the first POD on the planet to truly co-brand will become the next Bill Gates (and I mean it). Artists/creators are becoming more savvy; understand the importance of follow up with customers, etc and it is simply impossible with any POD".

As a user of POD services, I feel that a compromise would be a great step forward and a gesture that would show shopkeepers that they are valued. It's clear that databases/back-end systems are constantly becoming more sophisticated, so why can't the POD set their system to identify: a) a "marketplace" sale which then gets processed as per usual in all the branding glory the POD wishes to use; and b) a shop and/or referred sale which then gets processed as a shop sale which is shipped to the customer in unmarked packaging with an invoice that notes the name of the store/brand (at a minimum). I'd have no issue with the POD including a notation that "the t-shirt was printed and processed by POD Company Name on behalf of Shopkeeper Name". That would be a real partnership, which is exactly what this should be viewed as. In all my time in the graphic design industry working with printers on reports, brochures, banners etcetera, I've never seen a printer send out the finished product with a marketing brochure about their services. In fact, as a client of the printer you can often send your own labels for shipping boxes, for without YOUR client customer needing what you have to offer, you wouldn't need the printer (who would find themselves with one less paying job).

There are some tricks you can try to reduce the impact of the branding problem. Right now GritFX have printed up some postcards (branded on the reverse with our details and sans any POD reference) which we then pack and ship as giveaways. You could do the same with buttons which can be printed in bulk at a reasonable price. When running a tee giveaway you can have the tee printed and shipped to yourself and then re-ship it. However, when thinking about this you'll have to judge if the added expense (and time) is worth the effect and possible result. Using the POD "gift message" options are also another way to reach out to your winning fan and re-iterate your brand and name - and if you have your own domain, make sure you add your URL at the bottom of the message. These may help with your marketing and can reduce the problem, however it doesn't eliminate it and when I look to the 10 or so giveaways I've run since GritFX was established in 2008, we've had more than one fan drop the POD service provider's name when thanking "us" or mentioning their win online... and I don't blame them! If I too wasn't familiar with the POD/Shopkeeper relationship, I'd probably thank them also.

On that note, I'd like to close out this post with a diagram that shows just how problematic this can be (using the running of a tee giveaway as a scenario). The POD receives their profit AND they receive a thankyou!!! Say what!!? You're trippin'!! No. It happens...

Pitfall of POD - they have the last say with YOUR customer!

Related post: "Which POD Get's Your Nod"

Created By: Amanda Vare "Manz", GritFX, Movies, TV, and Pop Culture Tshirts

Wednesday, May 26, 2010

The Hidden Costs of Being Independent

So, you've decided that you're going to take the plunge and dive in at the deep end and launch an independent online t-shirt shop. You've factored in the costs of getting the t-shirts themselves and the screen printing of them but there is a proverbial slap in the face waiting for you if you aren't prepared for all the hidden costs of being independent. In this blog I'll outline some of the costs I've encountered from my work with LadyUmbrella.

Packaging
Whether it is a plain white mailer, custom packaging or even some extravagent and brand orientated packaging it's going to cost some moolah. Make sure you factor the packaging costs into your budget. I would also recommend starting your research months in advance of planned launch date - it can take time to find what you want and get it delivered, especially if it is going to be custom.

Postage
Of course, it is a no brainer, you are going to have to post your goods to your cherished customer so make sure you have enough in the kitty to ensure that the 'mailman always delivers'. Like the packaging, do some research to find out postal rates for different areas that you will be shipping to. There are different factors that determine the price of postage, namely size, weight and chosen delivery type (registered, express, standard etc). Large boxes are obviously more pricey to ship, not due to their weight but the area they take up, so make sure to factor in postage costs when you are working out you're packaging. Another important thing to consider is how you are going to handle returns/exchanges - try to factor them in.

Duty, Tax, Legals
This is another vital thing to make sure you have in order. I won't even attempt to give rates of tax or duty as it is totally different depending on where you are in the world but read up on it. If the accountants hat is something that never quite fitted you ask someone who is up to speed with the ins and outs of your tax system. The one rule that holds world wide is that you don't want to fall foul of the tax man. Also, depending on where you are you may need to register yourself as a company, again like the number crunching side of things, if you're not sure what your legal obligations are ask someone who is and get it sorted. Your business is your baby and all babies need to be looked after. Make sure to budget for costs that may be incurred compliments of legal sytems and the tax man.

Online
If you're going to be an independent and sell online you have to have an online presence. You're going to need a robust shopping cart system, website and domain/hosting. There are a whole myriad of choices when it comes to the type of website you can create, shopping cart you can use and hosting/domain plans you can choose and accordingly there are a whole myriad of prices. It is possible to get "one size fits all" type websites which will help keeps costs down and some stealthy googling will help you find a hosting/domain plan to suit your budget. Generally the big bucks are spent when you get a custom made website and shopping cart - it is up to you to decide which route you want to go.

Payment Processing and Banks
Once you have all of the above established you have to decide how are you going to get money from Point A to Point B (A being their pocket with B being yours) without the big C creeping in taking a piece of the pie (C being banks and payment processors charges). It is possible to use PayPal and only incur a low % per transaction cost (I think) but the downside is that they will hold the money for a much longer period than alternatives. If you set up a merchant account at a bank which will allow you to receive credit card payments directly there will be a lenghty form filling process to go through and possibly monthly payments. Like most things in this post thus far there are a lot of options available to you so do some research. What is ideal and works for someone may not be for you so do scope it out and find out what is your sweet spot regarding payment and banks, the balance between charges incurred, features of service and payment holding period.

Finishing the T-Shirt
One of the real advantages I think of being independent is that you have complete control of your product down to the very last detail. Perhaps you want to get some woven neck labels and some hang tags or have some other ornate notion of how you want to present your t-shirt. All of these little add ons undoubtedly cost money but can also take a lot of time to source. Don't leave it until the last minute to finalise your plans for finishing the t-shirt - if you fail to prepare, prepare to fail..

The Frills
Badges, stickers, business cards, custom pens, custom paper, custom anything! All these frills can really add to how you present your t-shirt but also cause those euros (dollars) to pile up. The frills can also take a bit of time to get produced so if you want to get yourself some frills of any nature make sure to research it in a timely fashion. One company who adds a lot of value to their product is Hipstery who add 3D glasses and a variety of other interesting frills to their packagaing. Unfortunately I can't add anymore about their packaging - it's shrouded in mystery, you should just check them out and prepare to be amazed.

What Rob Says
At this stage I must sound like a broken down record player ranting on about research but it is essential if you want to be able to manage the hidden costs of being independent. Find out what your budget can handle and research the above areas. It will take time and it will be frustrating. Some items that you might want to get may not be possible due to budget constraints - think outside the box when trying to come up with unique, cost saving ways of packaging your t-shirt.

The real value of the frills and packaging is the initial "wow" factor that it gives your customers. This wow factor comes at a price but you have to try see if you can afford the extra outlay. And that is what it will be - extra outlay. Don't let the frills and packaging increase the price of the product for the customer as this will defeat the purpose.

There is a lot to think about and a lot to mull over but form a strategy for how you are going to manage the hidden costs of being independent and.....
Research!!

This post was written by Rob from LadyUmbrella ladies t-shirts.