Description from the Openeur blog at http://www.openeur.com/blog/en/2006/12/15/threadless/
"The success of the American shirt community Threadless is one of the most exciting stories in the movement of Open Innovation. Threadless has succeeded in rallying a very creative and vital community round them, pooling almost any working steps and risks on its users. The business model is as simple as evident: there are thousands of designers on the web who are willing to distribute their creations to as many people as possible. Threadless provides the platform for a permanent competition on designs.
Designers have the possibility to publish blueprints for shirts on Threadless. The community is able to rate them over a certain period of time and the blueprints with the most positive votes are subsequently produced by the company. The rights are passed to Threadless and the designer gets 2.000 dollars in return. In order to honor the merits of designers his or her name is printed on the label on the inside of the shirt. The number of needed shirts is calculated on the basis of experiences and estimated in correlation to registered votes. Thus sales can be backed and the risk for Threadless is relatively small.
It’s the community stupid!
Threadless has managed it as well as few other services to let the own community feel to be part of the project. There are several programs encouraging communication and interaction within the community. Users who take a picture of themselves in a Threadless shirt and afterwards upload it on Threadless get credits for which they can buy shirts again. Furthermore there exists an internal affiliate-system rewarding recommendations. Thereby the user’s identification with Threadless is strengthened also increasing the demand for other products. The sales of the company having about 20 employees at the moment are estimated on 18 million dollars this year. By 6.5 million shirts sold a year and a yield on sales of approximately 35 percent there stay respectable earnings left." (http://www.openeur.com/blog/en/2006/12/15/threadless/)