Long Tail Demand and the Direct to Garment Printer

Long Tail Demand and the Direct to Garment Printer

A few weeks ago I made reference to a life lesson learned with my old garment business, Mad Gringo. The lack of data inherent in that business manifested itself in inventory and violated one of my other life lessons: keep cash in hand. Not all was lost because we bumped into a wondrous little machine from Brother via my friends at Axiom America – the Brother Direct To Garment Printer.

If you’re familiar with screen printing you can skip ahead. For those of you who have not had to purchase screened tees I have a little tutorial here. When you want to print some tees. . .maybe something like this:

A simple 4 color print requires 4 separate screens to be made. A screen is literally a screen. It’s a fine mesh that has an emulsive covering on it where you put your image. Where you want to color to show up is where the emulsion is removed. Then you can push an ink color through the screen and on to the garment.

4 colors on 4 screens that are all lined up so that your garment can be moved from one screen to another and ink transferred on to the right places. It’s a manual process. Check out this pic to get a mental image.

In order to make this labor intensive process a cost effective one, you need to print a minimum of  72-144 tees at a time. Inventory. The good news is that these prints can be done cheaply in quantities. Let’s say it’s $2.50 a tshirt for a 2 sided print and re-tag.

What the Direct to Garment Printer allowed us to do is to print that same image without screens. One at a time. The trade off is the cost of the print. . . it went from $2.50 a tee to say, $6 a tee.

But we had no need to carry inventory because we could print a tee when it was ordered instead of carrying the print and waiting for it to sell.

Got the picture? With no physical inventory needing to stocked, we could do a few things. Specifically, we could explore the idea of  Long Tail Demand.

Just to make sure we’re on the same page with the definition of Long Tail Demand: it’s the retailing strategy of selling a large number of unique items with relatively small quantities sold of each – usually in addition to selling fewer popular items in large quantities. Like this demand graph:

Mad Gringo’s demand curve applied to both size and style. Typically, looking at 100 tees sold, 60% of them were size L and XL and 40% were split between S, M, 2X, 3X and 4X. The styles worked about the same way. Out of 10 styles, you had 3 “winners” and 7 that had varying degrees of success. To make matters more interesting, you had some color, style and size combinations that sold better than others. Maddening.

The thought was this: use the Direct to Garment machine to make every tshirt available, all the time.

It would require some coordination with suppliers and put pressure on fulfillment, but what if it worked? It would give us data on what real demand for the tshirts was. If you saw something you liked, you order it. No “in stock” “out of stock” “waiting for stock” issues.

Good idea, right?

Here’s what happened. Instead of having to guess at inventory for the Spring and taking inventory positions on maybe 10 styles, we put up 50 styles and made them available in every color. Choices galore.

Guess what? It worked!

In month 1, we sold at least 1 of all 50 styles. The top 10 styles took up nearly 50% of the business, and as the Long Tail Demand curve would predict, the other 40 styles added up to just over 50% of the business.

Here’s the kicker. At the end of the month, we owned something like 16 unsold tees. All mistakenly printed when filling other orders.

No need for liquidation. No need for hand wringing. No wondering what styles to chase or guessing at how many to stock.

Now this was small online retail, but it opened up a lot of new opportunities.

I just needed Brother to make a machine that prints Hawaiian Shirts. Still waiting for that one.

Good stuff.