Threadless - Business Model

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Discussion

Crowdsourcing the design while still manufacturing the product

Massimo Menichelli:


While Threadless cannot be strictly categorized as DIY Craft, it has a very interesting business model that can be taken as an inspiration: crowdsourcing the design and then manufacturing the products.

Threadless is a community-centered online apparel store founded by Jake Nickell and Jacob DeHart in 2000 with just $ 1,000. It is now run by skinnyCorp of Chicago. Members of the Threadless community submit t-shirt designs online; the designs are then put to a public vote. A small percentage of submitted designs are selected for printing and sold through an online store and the winners receive a prize of $ 2,000 in cash, a $ 500 gift certificate (which they may trade in for $ 200 in cash), as well as an additional $ 500 for every reprint. There are even two Threadless stores: Threadless and Threadless Kids, in Chicago. Anders Sundelin noted that producing a predetermined demand keeps costs low and margins high, and because community members tell the company which t-shirts to produce Threadless never produces unsold t-shirts: this is why it generates more than $ 17,000,000 in annual sales with a 35% profit margin with a growing community. Moreover, Threadless has a subscription revenue stream via the 12 club (a limited edition t-shirt for 12 months) and it has also a Street Team affiliate program members earn points toward future purchases by referring sales or submitting a photo of them with a Threadless t-shirt." (http://www.openp2pdesign.org/2011/open-design/business-models-for-diy-craft/)