Internet Economy:Threadless.com

How does the side make $? What is its business model?

This site, in essence, makes its money by selling t-shirts. The area in which they are innovative is the way in which they select the t-shirts that are to be sold. They don’t do the designs themselves and they don’t have to waste time/money guessing which outside artists’ designs will sell best. Outsiders do the designs and Threadless uses its forum/ratings system to let the public vote on which designs they want to see in print. This takes a lot of the financial insecurity/uncertainty out of the equation for Threadless. They just select the handful of designs with the best ratings, print them, and sell them in their online shop, paying the artists responsible for the winning designs a flat fee of $2000, regardles of how many t-shirts are actually sold. Apparently the profits in this are enough to allow Threadless to prosper. Granted, the designs are awesome, so the site does a LOT of business.

What is its niche/comparative advantage?

It’s advantage is that it allows hundreds (thousands?) of people, many of them quite gifted designers, to pool there designs. The designs that the public likes best (which, it is assumed, would sell better) are selected for printing. The system that allows users to rate the designs is, as you can see, very valuable: the people who run threadless have a much better idea as to what designs will be successful this way. They don’t have to waste time and money preparing shirts that will not sell well enough to justify the expence.

Your impressions? Would you shop there?

Oh yes, I’d shop there. I have shopped there: I bought a t-shirt with a human ribcage on the front and a bird dangling from the design’s collarbone. I’ve worn it about three times this week. I also played around a little bit and posted one of my own t-shirt designs for rating…people in general liked it, but the threadless staff thought it had too much text. Threadless is based around art/visual designs.