An online marketplace for t-shirts

Posted: Tuesday 18 Nov 2008, under category Ideas

To create an online marketplace for t-shirts where designers can sell their unique creations.

Premise


Selling t-shirts online is already big business. Which means there is already a substantial market of potential customers but also much competition. My idea is to set up a web site where shoppers can find a wide variety of t-shirts created by many different designers. The designers and web site would split the profits, something like 80% for the site and 20% for the designer. At the beginning you would have to find a few designers to get started, but once you have some sales and some good word of mouth, you will probably have potential designers applying to you, which in turn will generate more sales, and create a kind of circle of business growth. The business plan could go in two stages:

First Stage

This will be a period of promotion and development. You will need to have a relationship with a couple designers so they can have a small selection of unique t-shirts to start out with. In this stage the shirts will be made-to-order, that is to say you will get the t-shirts made when they are ordered instead of producing a large amount at the beginning which would be very expensive and quite risky, as it will be difficult to predict the initial sales. Of course, made-to-order t-shirts are more expensive than producing in bulk, so the profit margin will be relatively small (but so will the capital needed). The primary activity of this stage will be directed towards marketing and advertising, with the goal being to build up a customer base and quality line of products. You will have a kind of virtually warehouse with the various t-shirt designs and the different sizes they come in, and different styles for men and women. In other words, you will be investing time money for while in order to be in a position to make money later. I imagine this first stage will last for sixth months to a year.

Second Stage

Once the site has a reasonable amount of regular customers and some successful t-shirt designs, the business model will change a bit. At this point you will be able to understand what kind of demand you can expect for their better selling t-shirts, and so instead of having them made-to-order you can have them produced in bulk, thereby reducing production costs and increasing profits. Hopefully, if all goes well, the number of designs and designers will increase, as the more sales the site has the easier it will be to attract new designers who will see the site as a very desirable marketplace in which to sell their designs. At this stage you can consider new kinds of business opportunities, one example might be to offer to create custom t-shirts for businesses and other websites, which would increase your visibility and customer base.

Capital Required

To start this business would probably require around 5000 dollars, plus a lot of time and energy. This figure estimates about 2000 dollars for constructing the web site, though perhaps this expense could at least partially avoided if you get a web designer to partner up with you on the business. Then another 3000 for promotional activities, this should get you at least 6 or 8 months into the project, at which point you could hope it will become a bit more self-sustaining.

Conclusion

I think this is a viable idea, but not one that will make you rich overnight. It will require a lot of time and energy, and it will probably take a year before you can hope to see real profits. But once established there will be many possibilities for growth. I think it is probably best for a small group of entrepreneurs, at least one or two of whom have an interest and love for creative t-shirts that will give them the motivation and taste in order to develop an online collection of t-shirts.

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