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TeePublic CEO: We’re More Than ‘Quarantine Memes’

When the reality of the pandemic set in a year ago, business at TeePublic initially looked far from rosy.

Downstream from market demand, the custom apparel and accessories company “sort of fell off a cliff” early on, CEO Adam Schwartz said. “We started to prepare for a very long year of that kind of reality of sales being down 30, 40 percent, and started to sort of batten down the hatches.”

Of course, as an e-commerce company designed around a print-on-demand model, things soon turned around. Add to that a booming mask business, and by the end of the year TeePublic had sold more than 6 million units, about a 270 percent jump compared to 2019, and doubled its revenue to approximately $400 million.

Schwartz said once the shock of those first few weeks began to wear off, around the beginning of April, demand began gaining speed. Toward the end of the month, the direct-to-consumer business began producing masks. Offering about a 35 percent margin compared to its tees’ 40 percent, masks rose as high as one-quarter of the business before ending up at around 14 to 15 percent of 2020 sales, Schwartz said.

TeePublic began selling face masks in late April
TeePublic began selling face masks in late April. TeePublic

“By May, it was clear that we were about to go on a bit of a run,” Schwartz said. “From there, over the summer and really through the rest of the year, we saw sales doubling from where they were the previous year and that maintained through the holidays.”

Schwartz attributed TeePublic’s 2020 success in part to its no-inventory, print-on-demand model. “A lot of more traditional retailers were sitting there in May, in June, even if they had a decent online presence, without the online digital inventory to back that up,” he said. TeePublic, on the other hand, had built its business so its products could print as soon as a customer placed the order, placing it in a good spot to sidestep many of the inventory issues that plagued so many others last year.

That flexibility also lent itself to meeting the cultural moment and capitalizing on it, too. “When there are pillars or sticking points in pop culture that are really pervasive, when everybody’s sort of on the same page… we’re going to be fastest to market with those sorts of products every time,” Schwartz said.

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The sheer amount of content created this past year further boosted sales at TeePublic. As artists found themselves simultaneously with more time on their hands due to lockdowns and less money coming in from elsewhere as gigs fell through, Schwartz said, the number of both artists and designs grew “significantly.”

“Because our core advantage and differentiator is the amount of design content that we have, we do better if we have more design content and we do better when we have more artists contributing to the site,” Schwartz said.

The margin on a full-price TeePublic T-shirt is approximately 40 percent.
The margin on a full-price TeePublic T-shirt is approximately 40 percent. TeePublic

Meeting and capitalizing on demand

Given the rapid growth it experienced, Schwartz said TeePublic has spent the past year building out its fulfillment apparatus.

Like many others, TeePublic felt the pain of slow shipping times. To build in redundancy against this, Schwartz said the company moved away from its practice of conducting price comparisons and picking the one or two best options, and instead got on board with pretty much every parcel player. “We needed to be able to move off of UPS and move on to FedEx in one particular fulfillment center because UPS wasn’t picking up that week,” he said.

Scaling up fulfillment, in its own way, also helped mitigate logistic slowdowns. “If you order something from TeePublic, not definitely, but most likely, it’s going to print and ship in a regional facility,” Schwartz said. Consequently, doubling fulfillment capacity essentially meant becoming more local everywhere, which, when you rely on ground shipping as TeePublic does, translates to shorter delivery times.

“If you’re ground shipping from a distribution center that’s in Georgia, and you’re going to California, that can be seven to nine days, like that can be a bit of a haul,” Schwartz said. “If you’re ground shipping from Georgia and you’re going to Florida, you’re probably two days, one or two days. So, ground shipping can be really fast if you’re close to the customer and that’s sort of our strategy.”

Looking to the future, Schwartz said TeePublic’s plan is to slow down and build a relationship with the substantial cohort of new customers it attracted last year. Part of that, he added, is letting them know everything they have to offer and successfully converting them on other products.

“Whatever you’re super passionate about, we can generally fulfill that and fulfill it in a really unique, designed way,” Schwartz said. “But we need customers to know that and know that it wasn’t just the one thing they found last year when they were searching for quarantine meme shirts or when they wanted something to wear to a protest, but it spans all of these different interest topics. And so, it’s really about developing deeper customer relationships so that those folks stick with us.”

Schwartz acknowledged there will be some return to normal from the e-commerce boom it rode in 2020. But, given how much of retail still takes place in person, he still sees further room for growth. “It’s easy for me to forget how early we still are in the lifecycle of e-commerce proliferation and its ultimate takeover of retail,” Schwartz said. What businesses saw last year, he added, was an acceleration of that trend.

“Maybe there’ll be a little bit of the tide going back out as retail comes back into the mix more, but I think we just fast forwarded five years into an inevitable future and now we’re in that future,” Schwartz said.