Turns Out There's Lottttttttssss Of Money To Be Made In T-Shirts

from the who-knew? dept

We’ve pointed out in the past that folks who don’t want to understand the economics of scarce and infinite goods often falsely claim that the business model we suggest is all about selling lots of t-shirts. Or, more specifically, when they comment in a mocking fashion, it’s usually something like “lotttttttttttttttttttttsssssssssssssssssss of t-shirts.”

The truth is that the business models we’ve shown usually have little to nothing to do with t-shirts. There are tons of scarcities that have nothing to do with t-shirts, and often aren’t even physical goods (another mistake people make is assuming that scarce means physical). Usually we’re talking about things like access and attention as valuable scarce goods. However, perhaps we were being a bit too flip in ignoring t-shirts ourselves.

Clive Thompson has a short article over at Wired looking at “the t-shirt economy,” noting that it’s actually a pretty big business: on the order of $40 billion in branded or decorated apparel (by comparison, the worldwide market for recorded music was supposedly $31.8 billion in 2006), and some of that definitely comes from content providers who are providing content for free and making money selling t-shirts. I still don’t think it’s the greatest business model out there (despite what some of my critics like to claim I’ve said), but I have to admit I’m rather amused by the fact that the “t-shirt economy” is actually getting some attention.

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Comments on “Turns Out There's Lottttttttssss Of Money To Be Made In T-Shirts”

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70 Comments
SteveD says:

Re: Horrible business

Selling tshirts to support political causes is perhaps a slightly different market from selling tshits connected to entertainment or culture.

I’m guilty of purchasing a number of tshirts to support webcomic artists, but to me liking the shirt design was as important as the cause.

Unfortunately two of my friends independently purchased the exact same XKCD shirt, and now we have to coordinate who gets to ware it on a given night. :/

TW Burger (profile) says:

Re: Horrible business

I looked at all three sites:

http://www.reactee.com – do it yourself t-shirts has been around since the 70s – its a viable small business in a large mall to get spare cash out of impulsive teens but not a huge money maker due to time cost overhead.

http://www.headlineshirts.com – much of your product line is out of date (I almost expected an “I shot JR” offering) and the art work could be better. Also, many are not easily interpreted and many are too anti-American. Generally, the shirts you offer are not hip enough or edgy enough. People buying statement shirts want to make a statement and amuse or shock others. Think along the lines of “Your girlfriend thinks I’m hot!” marketed on a womens tank top or “BOMB MARS NOW!” over an American flag.

You do not seem to have a passion for the business. Sell it and start over. Without passion you will not be very successful.

Anna Green (user link) says:

Tees can indeed be profotiable

The other commenters are correct…it’s all about the designs. The best way I’ve found to make good money with T-shirts (and plenty of other products, too) is to NOT invest my own money upfront–just my time. I have really researched this, and the best model I’ve found is this one: PODmadesimple.com
Check it out…you can be selling T-shirts online today…that’s no hype.

To see the kind of things that sell well for me, check this out–just one of many sites I run– this link goes to a page with tees.

Happy Selling!

Anonymous Coward says:

Such ignorance. T-shirts are a terrible way to try to make any decent money as an artist, the profit margin is extremely low. Quit claiming you know about business models, if you think you do put your money where your mouth is and start your own, since clearly you seem to think most people don’t know what they are doing and you think there are huge markets out there for you to capitalize on.

TW Burger (profile) says:

Re: Such ignorance

Such ignorance indeed. You are right, t-shirts will not make an artist rich. However you are not paying attention to this article and others regarding scarce goods versus infinite good in a economic model.

Andy Warhol made little or nothing (comparatively) from the t-shirts with his iconic Campbell’s tomato soup can on them. But the popularization this produced increased the value of his work tremendously. Mr. Warhol was not a very great artist. He was, perhaps, the greatest producer and marketer of art that has ever lived.

Create a demand for your work by having it associated with someone or something famous. Get a publicist to create media hype during the silly season when media are desperate for any content. Get your art on 100,000 t-shirts and sell them at cost. Your next painting will sell for a million dollars. FYI – you do have to have some talent and please serious art critics.

zcat (profile) says:

#18 Go right ahead

Sure you can make your own t-shirts, but you won’t be the guy with a stand at the gate. When the band mention that there are t-shirts available they won’t be mentioning you. When fans go to the website, it won’t be your t-shirts that the link goes to. You will have to put a shitload of your own effort (time & money) into marketing to get any reasonable quantity of sales. And still the ‘official’ t-shirt guys will be outselling you by a huge factor. You might break even, you might even make a small profit, but won’t make any significant dent in their sales.

Anonymous Coward says:

Re: #18 Go right ahead

Who told you I am a “small” guy? (OK. I am small, but I am not entering shirt business either).

Let us say wal-mart decides to do the same. They co-place cds and t-shirts. If apple ever wants to enter music shirt business all they have to do is put a link on iTunes.

Apart from music there is huge demand for sitcom/movie-related shirts which does not have live events.

Anyways, I don’t think the copyright regime is not going to end anytime soon. Musician and content-creators will be making money by selling content and they will not have to sell shirts for a living.

zcat (profile) says:

You see what happened there?

The band sold the ‘official’ T-shirt guy something that can’t be freely copied. “Access” at the concerts. Association with the band on their website. Marketing that introduces economies of scale, so they can sell shirts for a profit at a price where the small guy would barely break even. And in return for that the band are hopefully getting paid a fair percentage of those sales.

It doesn’t just work for T-shirts either, you can do CDs the same way. Even if people can freely copy the CDs some people (you’d be surprised how many) still want the actual factory-stamped disk in a plastic case, with all the cover art and lyrics and stuff. And even if you let the small guy sell his own identical factory-stamped CDs most people will still go to the band’s website and click the ‘buy our CD’ button. Not because they necessarily want to support the band’ but just because that’s the easiest and safest way to buy it.

And that’s not even counting the kind of price you can ask for a signed, limited edition set.

zcat (profile) says:

I guess that would happen..

Places like itunes and amazon are going to do ok out of it I guess. Who says competition is a bad thing anyhow? And the ‘copiers’ are still going to always be behind on the latest designs. As techdirt has pointed out in the past, this works out pretty well for the fashion industry. You pay a premium for the latest fashion, and a while down the track last month’s high fashion starts showing up on the shelves of wal-mart, but by then ‘high fashion’ has moved onto something else. Who knows. Perhaps someone’s going to have to be a little innovative. God forbid!

Another alternative is a ‘commercial-only’ copyright model. You still have a copyright holder, but they only get control over ‘publishers’. Home users can take the design and get it printed on their own shirt, or use p2p and burn their own CDs. But places like apple or amazon have to negotiate a cut with the copyright holder. That might be a fair compromise?

Anonymous Coward says:

Re: I guess that would happen..

The current situation is very similar to ‘commercial-only’ copyright model. Even today I don’t think tshirt companies are going to sue you if you copy their design on your shirt. And ban of p2p sharing of music is non-enforceable (If the sharer uses minimum security measure he/she is not going to be caught by authorities). Some (stupid) people are still afraid of MPAA and some like the convenience of buying (rather than going through pains of pirating), and these are the people buying. But removing copyright regime would change both of these and majority would not pay.

Mark says:

T Shirts CAN be profitable

I have a friend who owned a small building, and he started a business purchasing tee shirts by the intermodal shipping container-load from China, and he hired four women to “break bulk” them into sizes and colors, and then sold them to tee shirt retailers and printers for a dollar each, delivering them via UPS. He made a GOOD living from his small business, and put each of his eight kids through private schools, paid off the building mortgage, bought a nice house in a nice neighborhood, and gave a lot of money to the church, and worked the hours he felt like working. Then he sold the building to a bank and retired.

Peter says:

Re: T Shirts CAN be profitable

I love stories like yours. Someone could make so much money from a intermodal shipping container-load of T-Shirts from China, ”He made a GOOD living from his small business, and put each of his eight kids through private schools, paid off the building mortgage, bought a nice house in a nice neighborhood, and gave a lot of money to the church, and worked the hours he felt like working. Then he sold the building to a bank and retired.” BUT it’s either fantasy or their is a whole lot more to this story than you report.

Anon2 says:

Well, you can’t really extrapolate anything from that $40 billion figure — which is an aggregate figure for the entire decorated apparel industry. It’s not even clear to me whether that figure is for retail sales of finished goods, or whether it includes all the materials and labor and everything else that goes into producing them. T-shirts, and more specifically, artist/musician t-shirts are only a tiny fraction of this massive industry.

As for how much an artist could make, some perhaps can make lots of money, others a few bucks, and others make nothing at all or even look at t-shirts as loss-leaders — something they sell at shows for prices that have little or no margin built in, because they view people walking around wearing their shirts as a form of free advertising.

In general, though, the only musicians for whom t-shirts are an actual profit center (i.e., the net after cost-of-goods-sold is a meaningful segment of their annual revenues) are those who have very large audiences. Bands playing to a couple dozen, or even a couple hundred, people per show, even those playing 80-120 or more shows per year, are not really making much of anything off t-shirts or any other merchandise. Even most bigger artists, say those playing to 1,000 to 2,000 people a night don’t find this to be an all that consequential revenue stream. At even $3 to $4 per head (which is actually quite good) in overall gross merchandise sales on tour, once cost-of-goods-sold and other costs related to stocking, schlepping around and selling merch are deducted, it’s not a heck of a lot of money. Santana has one of the best per-head dollar sales figures around, but he’s in a very tiny minority of people who have been successful for years, and took some of their money years ago and invested it in hiring creative people who figured out — through experience combined with trial and error — what works and what doesn’t, and how to maximize per-head numbers on the road and internet orders the rest of the time. But he also sells loads of high-priced premium goods. Same with Tom Petty and a bunch of others. But how many artists can get away with selling $40 and $50 t-shirts?

In music, the folks who in general are making real money in t-shirts and other artist-related apparel are the merchandising companies — the fulfillment houses, and other similar operations where they have moderate to large warehouse facilities and service dozens or even hundreds of bands, allowing them to take advantage of scale.

Seriously, it’s a bad joke to think this is at all helpful to 95% of working musicians out there.

Anon2 says:

Mike, nowhere in this post do you say that. You make a general statement that you “still don’t think its the best business model out there.” Not only didn’t you qualify that statement to say it probably wouldn’t work for “most musicians,” but you placed that statement in a paragraph touting huge numbers re: decorated apparel and expressly tying that to “content providers who are providing content for free and making money off t-shirts.”

If you were not using these figures as a way of touting some alternative business model for working musicians — specifically leveraging the distribution of free content to enhance sales of other products (in this case t-shirts) — then I don’t see the point of your posting in the first place. Or at least not the way you chose to word it.

Last, my comments were as much directed to everyone else who comments on and reads this blog as they were to your original post. On the one hand, lots of lazy thinkers love all the talk about how the current copyright system is broken, that all the new technologies are leading (or have already led) to a point where it no longer makes sense to for artists to be so proprietary about their recorded music, and consistently cheer you on as you tout various business models that are based on giving away content. For them, vague notions of artists figuring out other ways to make money are sufficient, without thinking through what the implications of that might be for many of them. T-shirt sales just isn’t even a realistic part of that equation, at least for the vast majority of musicians who do not have tens or hundreds of thousands of fans yet.

On the other hand, artists too often expect t-shirts to be a way to make money, and it’s an unrealistic expectation. You can upload all the recorded music you want, but unless there are at least thousands, if not tens of thousands, of people digging it enough to download it on a regular basis and take the time to visit your website, you won’t sell enough t-shirts in a year to buy much more than a few happy meals. Cafe Press is one of several awesome intermediate solutions insofar as they don’t require you to make a huge up front investment to carry the necessary inventory, but nothing replaces volume when it comes to low-margin goods, which t-shirts and other merch items are unless you are a Carlos Santana or Madonna.

As both a fan and an industry “insider,” for years I’ve found it frustrating that artists don’t realize how much exposure they get by simply giving away certain goods. Bumper stickers for example, there’s no excuse whatsoever for any small or mid-sized band to charge for stickers. They are free advertising and it’s stupid not to give them out to people who are going to slap them all over the world. T-shirts, however, can and should be sold, but at the lowest margins you can justify. You’ll sell more shirts, and that means more people wearing them and again advertising your “brand.” Same with music, as you say all the time, though I part ways with you on being so absolute about the notion of recorded music being an “infinite good” that should always be given away for free. I know loads of bands that actually cover a good amount of their road expenses, and some that bring home some extra bucks, because in addition to the t-shirts and their cuts of ticket sales, they are selling CDs of their music for $5, $10, whatever price point in their market allows them to maximize sales without gouging people. Many, if not most, of these artists give away loads of music as well, but they reserve to themselves the right to decide what is free and what people should pay for. There’s no one size fits all.

But to circle back — yes, it’s obvious that t-shirts are a nice chunk of a very sizeable segment of the apparel industry. Everybody, or almost everybody, has t-shirts; many have drawers full of them. I’ve probably got over 200 myself. But most of the ones I’ve got, were either given to me, or were nicely made, nicely designed and reasonably priced, which meant they were being sold at relatively low margins. You take an American Apparel blank, take a design that you probably had to pay someone to do (or have to share your revenues with them for the license), have it screened by a good quality screener or maybe even batiked or whatever, and suddenly even $20 or so a piece is not putting a load of money in your pocket, and if you’re playing small to mid-sized clubs, your fans probably can’t afford much more than that (and most probably can’t even afford that except once in a while).

Liefde-Chance (user link) says:

T-shirt Resurrection

The t-shirt industry is definitely competitive, but what industry isn’t? When you choose to compete in this market you have to understand that you are participating in the fashion industry. Everyone has ideas and themes they wish to get across and what’s in style changes frequently.

I would advise those that are involved in this industry to do all the research you can and put forth all your effort to deliver a satisfying product to your customers to make them DEMAND more.

Liefde-Chance (user link) says:

T-shirt Resurrection Cont'd...

Wow its already been a year since I posted to this site. Here is the bottom line with the t-shirt industry. You must cater to a niche market because you want a loyal customer base that provide consistent sales. Take the NBA for example. Adults, teens and kids wear NBA apparel for their favorite team/player because they are dedicated to the brand.

Find a niche and cater to it and the rest will follow.

paul carter (user link) says:

T Shirt biz

This t shirt game is a laugh. There is so many spin off’s when it comes to the t shirt game. Loads of fake printed t shirts you will never notice the difference.
A print is just a print like a photo copy. All you need is good equipment and your sorted. Not everyone has an eye on fake especially when the price is a steal.
Im not saying its a good thing, its a bad thing.

paul carter (user link) says:

T Shirt biz

This t shirt game is a laugh. There is so many spin off’s when it comes to the t shirt game. Loads of fake printed t shirts you will never notice the difference.
A print is just a print like a photo copy. All you need is good equipment and your sorted. Not everyone has an eye on fake especially when the price is a steal.
Im not saying its a good thing, its a bad thing.

Johnson Tee says:

Socialy Irresponsible

Why on earth would you pick one of the very cheapest of all clothing items to write an article about. T-Shirts are low cost, so therefore have a very low pay out per hour compared to something of higher value. Not to mention it being the most saturated retail category on the internet.

This article is socially irresponsible, I wonder how many bankruptcies it has caused.

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