http://www.chicagobusiness.com/article/20140112/BLOGS11/140119968/threadless-lays-off-27-of-staff-shifts-strategy

I know this is an old topic but it's news to me. I didn't realize Threadless laid off a portion of their staff and have recently changed how they reward artists for their work. Instead of $2000 cash upfront they now pay 20% royalty, but artists retain the rights to their work. Aside from Bed, Bath & Beyond, Gap and now Target, they seem to be bowing to their corporate masters and cutting artists out of the profits.

What do you guys think of all of this? Is 20% of profits fair? Or is it better? Is retaining the rights to your work more important than Threadless having an exclusive? I think back to years ago when they first started and the only reward winners received were 3 free shirts. This company makes millions every year, so I guess I find the whole thing a little f*cked up that they've laid off workers, especially when it doesn't appear that they're hurting financially.

It's been awhile since i've ordered from them but I doubt i'll buy from them now that they've moved forward with this restructuring. Jake Nickell is worth an estimated $50 million. I guess profits do come first.

What do you think?
  • dbdesign

    I remember when I first heard about Threadless, I thought it was neat, and the shirts were cool. Wasn't until about a month ago when I had a few designs laying around and they just so happen to fit into the contest categories that were up on the website. I signed up and looked around and some of the designs not very impressed. A few days later I removed my account...I think Threadless.com is a complete waste of time, and I think that majority of the stuff on there is total garbage, it's like a glorified version of DeviantArt for T-shirts. What is the point and why would any artist do it...can you really make any decent money from sites like that? On top of that...who the hell actually wears tshirts form Threadless, there are so many cool clothing companies out now...I'd rather buy a pack of Hanes undershirts than wear some of the stuff at Threadless.
  • disembodied head

    dbdesign said:I remember when I first heard about Threadless, I thought it was neat, and the shirts were cool. Wasn't until about a month ago when I had a few designs laying around and they just so happen to fit into the contest categories that were up on the website. I signed up and looked around and some of the designs not very impressed. A few days later I removed my account...I think Threadless.com is a complete waste of time, and I think that majority of the stuff on there is total garbage, it's like a glorified version of DeviantArt for T-shirts. What is the point and why would any artist do it...can you really make any decent money from sites like that? On top of that...who the hell actually wears tshirts form Threadless, there are so many cool clothing companies out now...I'd rather buy a pack of Hanes undershirts than wear some of the stuff at Threadless.

    the point is that Threadless rewarded artists for their work in the form of $2000 + $500 for reprints, so i'm sure it's been worth it for every artist that has had a winning design. That isn't the case anymore now that they've moved to the royalty model. This isn't bad in and of itself but that was part of the appeal of having your shirt printed - you got paid a nice chunk of cash.
  • Sushilove

    They still give the $2000 reward for some special contests (prizes vary a bit), but for the regular contest they went the royalty route you mention.

    Designbyhumans did the same a while ago. The difference is that in DBH you set up a store and can sell any design you want. While at threadless your design has to be selected (aka winning the contest) to get the royalties, which I think is a bit shit. Guess it depends on the sales you end getting. Probably a shirt on threadless will make more than on DBH.

    Reason for them to do that? My theory is that sales weren't too good for some contest winners and the couldn't justify anymore paying big prizes. So they prefer to have more tees and don't risk money upfront and just pay royalties to designers. Also that's the reason for designs not being exclusive to dbh or threadless, so designers can make more money elsewhere.

    Is this better or worse for designers? Probably tees that were winners a long ago on threadless when the prize was just $500 could have make more money on royalties than that. So on the long run you can make a lot of money. Or maybe not, it's a tricky situation.
  • MrSnake

    Things might be getting tough on the t-shirt world.

    http://hideyourarms.com/2014/06/05/lafraise-close-july-1st/
  • miles to go

    Much like the bubble that happened for indie brands a few years back, this tech bubble has burst. I don't know about others on here, but I've seen online sales diminish in terms of the kind of crazy releases that would happen. I have kept that balanced and moving forward by adding in a ton of wholesale accounts, but the t-shirt craze has mellowed out i think and this includes thread less and others, like LaFraise.

    In terms of payment, $2k was super rad and brought in a high caliber of artist to the site. If sales aren't near what they used to be, they will cut where they can. Obviously if their brick and mortar closed and they are reducing the rates, things are not looking good. They have to trim the fat, but things like this are a huge warning that they are on a fast downward trajectory. Most businesses have their peak and they hit and rode the wave of t-shirt enthusiasm. That fad has shifted and they either need to try to adapt or die.

    I don't know their average sales, but if they sold 500 tees at $20, 20% is still $2k
  • disembodied head

    Sushilove said:They still give the $2000 reward for some special contests (prizes vary a bit), but for the regular contest they went the royalty route you mention.

    Designbyhumans did the same a while ago. The difference is that in DBH you set up a store and can sell any design you want. While at threadless your design has to be selected (aka winning the contest) to get the royalties, which I think is a bit shit. Guess it depends on the sales you end getting. Probably a shirt on threadless will make more than on DBH.

    Reason for them to do that? My theory is that sales weren't too good for some contest winners and the couldn't justify anymore paying big prizes. So they prefer to have more tees and don't risk money upfront and just pay royalties to designers. Also that's the reason for designs not being exclusive to dbh or threadless, so designers can make more money elsewhere.

    Is this better or worse for designers? Probably tees that were winners a long ago on threadless when the prize was just $500 could have make more money on royalties than that. So on the long run you can make a lot of money. Or maybe not, it's a tricky situation.

    the thing that DBH started doing with their collective stores that really bugs me is to offer shirts as DTG prints. I understand the economics behind this model but I still refuse to buy a DTG printed shirt.

    as for the new Threadless model, I'm curious to hear from others here who may have designs up at Threadless to comment on whether or not their new business model is an advantage or disadvantage. On the one hand, t-shirts, like most product, have a finite shelf life. But, it appears that they're leveraging their popularity and teaming up with corporate entities like Bed, Bath & Beyond, Gap and Target. I guess if you have a design that's picked up by one of these companies then 20% of profits might be worthwhile, but you're still competing against a lot of other artists to get a piece of the pie. The only one that comes out the winner in the end is Threadless.
  • miles to go

    disembodied head said:
    Sushilove said:They still give the $2000 reward for some special contests (prizes vary a bit), but for the regular contest they went the royalty route you mention.

    Designbyhumans did the same a while ago. The difference is that in DBH you set up a store and can sell any design you want. While at threadless your design has to be selected (aka winning the contest) to get the royalties, which I think is a bit shit. Guess it depends on the sales you end getting. Probably a shirt on threadless will make more than on DBH.

    Reason for them to do that? My theory is that sales weren't too good for some contest winners and the couldn't justify anymore paying big prizes. So they prefer to have more tees and don't risk money upfront and just pay royalties to designers. Also that's the reason for designs not being exclusive to dbh or threadless, so designers can make more money elsewhere.

    Is this better or worse for designers? Probably tees that were winners a long ago on threadless when the prize was just $500 could have make more money on royalties than that. So on the long run you can make a lot of money. Or maybe not, it's a tricky situation.

    the thing that DBH started doing with their collective stores that really bugs me is to offer shirts as DTG prints. I understand the economics behind this model but I still refuse to buy a DTG printed shirt.

    as for the new Threadless model, I'm curious to hear from others here who may have designs up at Threadless to comment on whether or not their new business model is an advantage or disadvantage. On the one hand, t-shirts, like most product, have a finite shelf life. But, it appears that they're leveraging their popularity and teaming up with corporate entities like Bed, Bath & Beyond, Gap and Target. I guess if you have a design that's picked up by one of these companies then 20% of profits might be worthwhile, but you're still competing against a lot of other artists to get a piece of the pie. The only one that comes out the winner in the end is Threadless.

    If those companies are anything like the big box i've dealt with, they probably pay under $7 per tee. Quantity could help still give a decent payout, but my guess would be that they pay around $6 or less per shirt they'd buy from thread less.
  • Sushilove

    disembodied head said:
    Sushilove said:They still give the $2000 reward for some special contests (prizes vary a bit), but for the regular contest they went the royalty route you mention.

    Designbyhumans did the same a while ago. The difference is that in DBH you set up a store and can sell any design you want. While at threadless your design has to be selected (aka winning the contest) to get the royalties, which I think is a bit shit. Guess it depends on the sales you end getting. Probably a shirt on threadless will make more than on DBH.

    Reason for them to do that? My theory is that sales weren't too good for some contest winners and the couldn't justify anymore paying big prizes. So they prefer to have more tees and don't risk money upfront and just pay royalties to designers. Also that's the reason for designs not being exclusive to dbh or threadless, so designers can make more money elsewhere.

    Is this better or worse for designers? Probably tees that were winners a long ago on threadless when the prize was just $500 could have make more money on royalties than that. So on the long run you can make a lot of money. Or maybe not, it's a tricky situation.

    the thing that DBH started doing with their collective stores that really bugs me is to offer shirts as DTG prints. I understand the economics behind this model but I still refuse to buy a DTG printed shirt.

    as for the new Threadless model, I'm curious to hear from others here who may have designs up at Threadless to comment on whether or not their new business model is an advantage or disadvantage. On the one hand, t-shirts, like most product, have a finite shelf life. But, it appears that they're leveraging their popularity and teaming up with corporate entities like Bed, Bath & Beyond, Gap and Target. I guess if you have a design that's picked up by one of these companies then 20% of profits might be worthwhile, but you're still competing against a lot of other artists to get a piece of the pie. The only one that comes out the winner in the end is Threadless.

    The guy that did the 'communist party' design, one of the most popular at threadless, said he was sick of seeing threadless make lots of money with his design (he probably won when the prizes weren't that high) and decided to make a new version of his design to cash out more sales based on royalties. Both versions of his designs can be found now at DBH.

    Like miles to go said, the numbers are there. You can make $2k based solely on royalties. Obviously it's better to get $2000 upfront than in small amounts over 3 or 4 days. But that's the thing right now. What were the chances of winning at threadless anyway? or the chances to someone buying a design for $2000?

    You are going to see a lot of artists with stores set everywhere, society6, redbubble, dbh, teepublic... everybody wants to make those extra bucks a month. Sadly that's the only way for most artists. Big prize contest sites are gone.

    Regarding the dtg printing... I have two tees from designbyhumans and the quality is pretty good. Not only the print but the tee itself is amazing.
    You can't beat a silkscreen print but obviously for their business model dtg is the only way to go. And it looks like it's going pretty well for them. I have a DBH store and sales are being quite good so far.
  • disembodied head

    Matt Borchert said:Well when is the last time you purchased a threadless shirt? I agree with miles to go in saying the trend of these websites was a bubble that was bound to eventually burst. No doubt these changes signify slumping sales with predictions of sales to continue slumping. I don't think 20% is unfair by any means, assuming that thread less can drive enough traffic to the item to get a few hundred sales.

    That being said, the value proposition of submitting designs to contest websites like threadless / DBH just doesn't make sense to me. There are better ways to get paid for your time unless your win rate is significant.

    I would say it's been at least a year or two since I last bought from Threadless....and that was during one of their $10 sales. I've actually become even more discriminating when it comes to designs and am finding myself wearing them less and less. I almost prefer blank tees nowadays rather than graphic tees. must be an age thing
  • BCHC

    disembodied head said:
    as for the new Threadless model, I'm curious to hear from others here who may have designs up at Threadless to comment on whether or not their new business model is an advantage or disadvantage.

    This has been discussed A LOT on the Threadless forums, you should be able to find those threads easily (if you haven't read them yet), some artists even posted screenshots of their earnings under the new model.
  • JoeBaronDesign

    disembodied head said:

    I would say it's been at least a year or two since I last bought from Threadless....and that was during one of their $10 sales. I've actually become even more discriminating when it comes to designs and am finding myself wearing them less and less. I almost prefer blank tees nowadays rather than graphic tees. must be an age thing

    It could be an age thing with not wanting to wear graphic tees, but I do see a lot more blank shirts entering as a trend. Sometimes it's just better to wear a nice blank tee, but Threadless tees aren't bad, they have something for everyone. Either way it does look like that graphic tees are slowly losing its steam. I am still surprised that Threadless is still running with the contest idea, since most places are ending it. Their contest and payout method separates them from other places, but you can still make money on DBH,redbubble,society 6, etc.. It's a business and you have to adapt to the times and to your customer base. DBH used to be more artsy graphic tees and they ended up with a many parody type tees, plus they offer prints and phone cases just like other similar sites. If Threadless had to make adjustments to keep their company going that was a decision that had to be made in order to stay afloat and adapt. If Jake Newell is worth an estimated $50 million, I doubt that all of that money is from Threadless entirely and not in other investments. Was anyone really a professional t-shirt contest designer and say they were were they making a good living off it?
  • William Henry

    I got two shirts from their Simpsons contest and love the designs, but the quality of the shirt is pretty weak. The neck color has gotten pretty misshapen after only a few washes, and the shirts just aren't that comfortable. Maybe I'm spoiled by wearing tri-blend tees most of the time, but the Threadless shirts are a bummer.
  • disembodied head

    JoeBaronDesign said:
    disembodied head said:

    I would say it's been at least a year or two since I last bought from Threadless....and that was during one of their $10 sales. I've actually become even more discriminating when it comes to designs and am finding myself wearing them less and less. I almost prefer blank tees nowadays rather than graphic tees. must be an age thing

    It could be an age thing with not wanting to wear graphic tees, but I do see a lot more blank shirts entering as a trend. Sometimes it's just better to wear a nice blank tee, but Threadless tees aren't bad, they have something for everyone. Either way it does look like that graphic tees are slowly losing its steam. I am still surprised that Threadless is still running with the contest idea, since most places are ending it. Their contest and payout method separates them from other places, but you can still make money on DBH,redbubble,society 6, etc.. It's a business and you have to adapt to the times and to your customer base. DBH used to be more artsy graphic tees and they ended up with a many parody type tees, plus they offer prints and phone cases just like other similar sites. If Threadless had to make adjustments to keep their company going that was a decision that had to be made in order to stay afloat and adapt. If Jake Newell is worth an estimated $50 million, I doubt that all of that money is from Threadless entirely and not in other investments. Was anyone really a professional t-shirt contest designer and say they were were they making a good living off it?

    For me graphic tees has become an age thing. I'm more likely to wear a blank tee or button up shirt than a graphic tee. If I'm at home with my son, going to a ball game, doing yard work or going to bed I'll wear a graphic tee. Oddly enough, I'm more likely these days to buy a parody shirt from Teefury than anywhere else.

    As for business trends, I honestly don't know what they are at the moment. I've seen quite a few contest sites come and go over the years (shirt fight, tilteed, etc) and they paid $500 prizes to the winners. I kind if knew these companies would fail eventually because small start ups only have a finite amount of capital and without a distribution chain in place they had no place to go but down. From a business perspective it makes sense that Threadless would make a lateral move to companies like Target & Gap, but it didn't seem like they were hurting financially, unless of course they were over-paying their employees (which I doubt).
  • ThirstyFly

    Literally just got back from Target where I bought a Threadless greeting card for my son to give at a bday party today. Recognized most all the designs--so surreal. I heard that Society 6 was working on a deal with Target, too, not sure what will come of that. Regarding DBH, Threadless, and the others, it does feel like a huge non-stop hustle where you have to upload new works every 5 minutes to keep up.
  • SupremacyApparel

    Who needs Threadless, I don't even see their promos on this site anymore..... Hahahaha, I think we all realised we were paying, again for a name, a label, it's ridiculous. Nah, I will do local, City big enough I can get same quality, and pick it up, fck shipping, etc. I don't wanna play S&H on MY own tees, forcing a markup

    $20-25 a tee, should all it be.
  • SupremacyApparel

    Society6 is coming to TARGET?!?! I doubt it, but with that being said. They will be the next Urban Outfitters, FFS Etnies sold out to Giant Tiger, granted not speciality designs. It just your generic logo yet at the same time.... it's ridiculous.
  • DCAY

    I didn't know about the lay-offs or store closure, but have noticed the shift in how the company works as a whole in the last year. They actually still have contests with cash prizes, the only difference is that it's in the form of a design challenge with a specific theme. I think this makes sense seeing as they do not have the same strong customer base as they used to have. By running contests looking for a specific type of graphic tee, they're able to basically curate the art better in terms of what is currently selling best for them.

    With fulfillment sites like Society6 and DBH (which has obliviously had to change their setup as well to keep up with the times) I think artists can make up what extra cash they might not be getting from Threadless by selling their art through multiple outlets now that the full rights to their work is not taken away.
  • dawnwells

    Since last few weeks, i have been research a lot and found society6, etsy and redbubble as alternatives to threadless. http://society6couponcodes.com/
    hope that would help you others!

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