First, let me say that I can think of nothing I would rather have our politicians do than argue about AIG bonuses. The more time they spend fighting for TV time to mislead their constituents into thinking they are doing something, the less time they have to actually do something and screw things up. Worrying about last year’s bonuses is easily the best use of their time.
While they do nothing, the real change is going to come from small businesspeople who are freaking out about the best way to stay in business and serve their customers. The people who can’t sleep at night because of it, and when they do, all they do is dream about work. You all know who you are. Here is one example I wanted to share.
Hello Mark! My name is Jeremy Parker and I am a 23 year old entrepreneur. I am
the CEO of Tees and Tats, a high-end, limited edition t-shirt line
designed by world renown tattoo artist Marco Serio. We launched the
line last July, with much success, selling to many high-end boutiques
all over the US and Canada. But starting last November, our sales
started to slow dramatically, as with the rest of the economy. A
large percentage of the stores we were selling to – closed, and the
stores that have survived are not placing re-orders.
I did not want to concede to failure- because if the entrepreneurial
spirit dies, America will be in a much worse place. I knew the store
issue would still be a problem, because high-end retailers are not
buying goods anymore, but I came up with an idea that I thought might
help our online sales.
I first lowered our prices from $110 to $55. This helped a little
bit, but people where still not buying like we saw earlier. So I came
up with a concept that at the time seemed bizarre, but now has proven
to be a savior for us.
Now when a customer buys a shirt on our website (www.teesandtats.com),
they are told the price of the DOW. For every 100 points that the DOW
drops within two months after the time of purchase they receive $5
dollars off of their purchase. For example if a customer buys a shirt
for $55 dollars and the DOW is 8200 and two months later the DOW is
8000 – the customer gets a check in the mail for $10 dollars. The
reason why people aren’t buying high-end fashion- is that they are
nervous about affording food, rent and other necessary living
expenses. Obviously very understandable. So by assuring them that if
the economy deteriorates even more they would get some money back —
it made it very enticing for many customers. Our sales have been up
significantly since we started this.
One important additional element to the Tees and Tats philosophy is
our desire to give back. For every T-shirt sold in the initial
collection, we are going donate a percentage of proceeds to the
non-profit ArtWorks Foundation. Based in Englewood, N.J., ArtWorks
provides children and young adults suffering from chronic and
life-threatening illnesses, and their siblings, access to creative and
performing arts programming which encourages the use of the creative
process as a vehicle for healing, communication, self-expression, and
personal development.
I just want to thank you for listening to my story, and I want to say
that as things are looking bad and seems to be getting even worse– It
is going to be the American people who are going to fix this problem.
Best Wishes,
Jeremy Parker
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Jeremy is right, it’s all about price… but unfortunately, he’s going about it the wrong way. His methodology, along with the dominant pricing methodologies in most businesses have not changed much over the past 30 years (e.g. cost-plus rules, margins, everyday low prices, etc.), as these approaches don’t address something fundamental about the price structure: that near-microscopic up or down tweaks of individual prices throughout the firm’s voluminous opportunity set can result in dramatic profitability gains. These “tweaks” are quantitatively-derived outcomes of analyzing the cross-elasticities between all of the products (SKUs) on offer and the customer demographics, geographic locations, marketing vehicles and distribution channels, as well as outside influences such as seasonality, macroeconomic forces or competitor actions. This process, i.e. Scientific Micromarket Management, allows you to assess how each customer values your product and offer that exact price every day in every market. Here at Sentrana, we have enabled impacts for Fortune 100 clientele that typically result in 1-3% revenue growth, 6-9% gross profit growth, and 12-18% gross margin growth!
Comment by Joe Smiley -
isn’t there something wrong about such a “business model” being glorified by noting it in the first place? Who needs t-shirt resellers? Hasn’t Mr. Cuban meet any REAL inventors in his life for a change? (cough, cough, cough 🙂 )
The “necessity is the mother of invention” saying is incomplete. Necessity does in fact drive invention. BUT! You have to be smart enough to be actually able to INVENT the invention when it’s needed. I mean it’s not like the execs worldwide are without necessities nowadays. Well, and so what? If they are incapable of inventing anything useful, any meaningful solution to their problems, then so much for necessity and invention, right? The reign of the “proven track record” non-entities will continue until the time when they finally destroy their own nest through mismanagement beyond repair.
Cheers,
Michael
Comment by Michael Lyubomirskiy -
Hi Mark,
We have a project that we hope will assist entreprenuers. My StartUp Site is a public beta of a startup community. It is free to sign up and startups can post a profile and blog about their business absolutely free. We hope to add more features in the near future and invite all feedback from entrepreneurs as to what they would like to see. Help us spread the word to all entrepreneurs to visit http://www.mystartupsite.com.
Thanks,
Chris and The My StartUp Site Team
Comment by Christopher Whitlatch -
All you who disapprove of these luxury tee-shirts: They’re out of my price range too, and I probably wouldn’t be interested in anything designed by a tattoo artist, but you know–it’s the guy with the money who decides. The customer. Not the social planners. At least that was the original idea. Go ahead and disapprove of Jeremy’s product, clientele, or business model as much as you want. That’s your business. You vote with your money. Others will vote with theirs. But don’t go trying to substitute political action for economic.
Comment by david smith -
When the buyers go hungry they can sell their tatoo shirts on ebay. While I don’t know what Jeremy Parker will be doing in 5 years, I do know that he will not be selling tatoo shirts.
Comment by Indiana John -
What is the time limit on the refund? More to the point, is the consumer protected if they purchase the shirt, the company goes toes-up, and then the Dow falls to a 4-handle?
Giving away a Dow put with an overpriced t-shirt is just a gimmick – although it’s nowhere near as gimmicky as installing the inbred halfwit son of a former president because he has a line in faux-cowboy folksy patter, y’all.
At least the entrepreneur in question is risking his own capital and doesn’t pretend to have the right to mortgage everyone’s future… so that’s a start, even if it’s still a bad idea.
Little wonder the US way of doing business – crony capitalist thanatocracy – is starting to be ridiculed.
Public skepticism regarding politicians is at record highs – another great development – although numptie consumers still think government is the right beast to extricate the world from a government-caused depression.
Let’s hope the Russians do us a favour and launch a first-strike against London while all the Parasites-in-Chief of the G20 are there. Obviously the collateral damage would be a shame (all those CCTV cameras destroyed for example)…
Comment by DeathPolitics -
While the entrepreneurial thread is relevant, the problem is the entrepreneur. Selling $110 t-shirts to Sex and the City aficionados rather than focusing in on real wealth creating activities is more symptomatic of the problem- not a solution.
But what does one expect from a society that has corporations in internet bubbles paying over $1 billion for an internet video site only to find the lout would buy a basketball team.
Comment by Hegelian Solutions -
Would you be interested in investing in an Chemical Distribution firm that has grown form 1/2 million to over 5 million in 2008? We are looking for expansion capital and offering equity in the a business. We have a back-log and we are working with a Fortune 500 company. Please visit or web-site at http://www.SiriusChemicalGroup.com
Comment by DONNIE HARDIMAN -
i love how the kid– does a good thing by giving charity and tyler here is crying “I want to give money to my own charity!!!! daddy– he’s making me give to his charity, daddy its not fair, why is Jeremy being such an asshole. he is only thinking about his own charity”
hey Tyler– your an idiot
Comment by samantha peter -
There are hundreds of thousands of charities that deserve contributions and support. I would rather pick the charity that I find worthwhile than to involuntarily support your charity of choice – no matter how worthwhile you may feel it to be. People need to get over feeling so magnanimous about dedicating parts of a product’s purchase price to a charity. It’s a gimmick and it’s getting old. I’m not going to buy your product solely because you are donating a few pennies to a charity. Also, if I do not see value in your product, I’m not likely to buy it. But maybe that’s just me.
Comment by Tyler -
This is not innovation, this is only a small marketing gimmick. Innovation is the result of research and development of really new products with new value for the customers. Hey, with such gimmicks you will save the american economy, for sure.
Comment by Michael -
Stupid idea, risk without reward. His tee’s aren’t that high end – 55 bucks is less than half the cost of an Audigier and in line with Hardy.
He shouldn’t discount at all and stay focused on the high end market and growing his customer base rather than trying to encourage more orders from current customers.
Comment by Matt -
Bravo Jeremy – and Mark for publishing this. Regardless of what the product is or how much it used to sell for, the point is that Jeremy decided to do something about his situation.
Success is a choice. So is failure.
The small business owners who innovate and look for possible solutions and ideas are the ones who will survive this economic situation.
I applaud the ingenuity and belief that Jeremy has.
Rock on!
Comment by Diane Helbig -
That sounds kind of risky, especially since the down likes to fluctuate and they could be out money, only to have the DOW go back up.
Comment by futuRich -
Brilliant!
Jeremy, way to go! Super congrats on getting MC’s attention and then all of the attention of MC’s followers. I applaud your entrepreneurship and I hope that you grow 100% and 1000%.
Keep going – you will win!
Mark,
Thank you for your inspiration!
All the best and many blessings to you,
Jason
Comment by joac -
hey “whatever’ your a idiot.
Why did circuit city go under, why are some of the biggest companies in the USA bankrupt. Not because they suck, but because the economy is in a freefall and is experiencing the most difficult time in the last 80 years.
Comment by sam -
I bet the amount that this guy is going to end up giving to charity is far less then the amount he gives back to the customer.
Why not donate THAT portion to charity too?
I’m sorry, but this whole idea sounds like an accounting nightmare….and it’s just dumb besides that.
If the shirts were any good people would buy them anyway. They wouldn’t need a scheme.
Comment by whatever -
Great comment Sean– I totally agree
Comment by sam -
anyone arguing what his price points should be does not take into account startup costs or other ongoing fixed costs. for example, in my liquid/chemical business, we had to buy machinery and tooling that costed over 100K. each finished product was $2 to make excluding the capital eqiuptment, but when you factored in startup and equiptment costs – it was closer to $5. those t-shirts might cost him $40 and after paying employees and leases.. he might be marginally profitable at $55. At $110, it might have enabled him to leverage that profit into expansion, whereas at $55, he’s treading water. it’s imperative to have a high profit as a manufacturing startup as your costs are high and you cannot hit scale for a period of time. if you don’t want to pay $110 or $55 – don’t, but don’t put the shirts or the business down because you do not find value in their product.
Comment by Sean -
Bill Ross– I think you are severly looking at what Jeremy did completely wrong. What is the difference of a high-end clothing line– putting a 110 tee on sale for 55 dollars. That is what he did– like every other retailer in the countrey. Every high-end clothing line- is stagnent with sales. They are lowering price– so that they can survive this economy. What is wrong with that?
Then Jeremy took it a step further he came up with a genius concept of givinfg customers money back if the economy deteriorates even further 9but a max of 700 point DOW drop)– so Jeremy even makes money (not neccesarily a profit) but sunk cost money back if the economy completely deteriorates.
I just think that there are so many stupid people reading your blog Mark.. They just don’t it. And they are stuck on the fact that its stupid to sell $110 dollar tee. Get over it. its a market.
Comment by sam -
Mark I am SO disappointed that THIS is something you feel needs to be highlighted. Often I read your blog and feel smarter. This time I would like the time I wasted reading that back (and I will spot you the time I spend writing this.) Sure Jeremy is hard working and RUNNING a business, but let’s not glorify someone whose business model is selling a product with a huge markup…and that’s about it. If I sold $10,000-a-night stays at Red Roof Inn to people and the market drops out for my customers and so then I offer them a reduced rate of $5,000 a night and less depending on what the Dow did that day I would be a genius? Likely not. I have basically switched my market segment. The people that bought Jeremy’s shirts for $110 and can afford it at $110 are likely just getting a bargain and the people that weren’t looking to spend $110, but waited for a sale are the ones buying now. This also makes me wonder what his costs are and what he did with the money he made from all the shirts he sold before. Did he mistakenly think that people would want more $110 shirts by 100% per year for eternity and therefor spend money on production? Did he blow the money on an overpriced house?
Basically, I am disappointed that you feel this (a gimmick)is indicative of what America is all about. believe America and the economy is about efficiency and low cost. Sure there is a market for high end products, but a much smaller one. If he actually reduced his costs I would have been more impressed. Maybe you are just trying to force this whole thing about “American Innovation” too much. Better luck with your next post.
Comment by bill ross -
Eric Ryder– I don’t think you went to the website and read the rules. It says “There is a maximum of 700 points”. So if the DOW goes down the max of 700 points– that is 35 dollars back. Tees and Tats always makes money. Genius Jeremy, Bravo
Comment by h dillon -
Ingenius, not surprised Mark picked up on it, this way if “…a customer buys a shirt for $55 dollars and the DOW is 8200 and two months later the DOW is 8000 – the customer gets a check in the mail for $10 dollars.”
Or, if the market goes down 1500 points they only need to give each buyer of a $55 T-Shirt…$75…
What a “Great Idea”, straight from the AIG playbook, pretend your products are “insured” and “know” that you’ll never have to pay out. Thanks for the tip…
Comment by Eric Ryder -
Steve P., I’m certainly not jealous of someone wanting to buy a $110 t-shirt. It’s another example of the insane excess in this country. But more of a testament to idiots who would plunk down $110 for a t-shirt.
I will grant you that he is selling to a retailer so there’s two insane gougers of the public in action here. If the maker makes them for less than $20 and sells them for $35 to $40, he’s making 100% profit. But the store is really gouging the public. They’re making over 250% profit. Now that’s just rediculous.
I am by no means a socialist. I’m all for people making money. But it’s obscene that someone would take a simple product and charge such an outrageous price. And the people who buy them are shallow individuals that aren’t looking for the “finer things in life”, they only want others to know that they spent $110 on a shirt, to boost their own ego and compensate for the low self-esteem.
Comment by R. Hancox -
I just looked up Jeremy Parker on Google. Really interesting experience he has. He graduated valdictorian from the College of Communication at Boston University in 2007. He produced a feature length documentary featuring Russell Simmons– titled One Per Cent, that won the Audience Award at the 2006 Vail Film Festival. Youngest person ever to win that award. There are some other random awards also– like finalist of national business competition– run by Kevin Plank (CEO of under armor)– called Cupid’s Cup. and Selected into the Telluride Film Festival Student Symposium. Named NJ Person of the Week last year by NY1 tv station- for his charitable work.
This kid is a rennaissance man.
Comment by h dillon -
keep trying the gambling tables Jeremy. You may be lucky and then you will call yourself a great businessman. Or yourgimmick may fail and then you will no-doubt call yourself an experienced businessman. You have the right self-confident spirit to sell yourself; still I would not bet any of my money on your business success.
I wish you luck – like all the other gamblers.
Comment by Fred -
congrats Jeremy, and thank you Mark for sharing this!
the amount of immature comments like “I would never buy a $110-shirt” is amazing and reflects no entrepreneurial sense and intelligence.
as a marketer i have a few questions for Jeremy:
– among your target audience, I would consider your USP (besides the design and motives of the shirts) the upscale image, which your target group is even looking for as a way of differentiation. with the new price, do you still believe your product is appealing to the same audience?
– don’t you think that your change in pricing strategy will re-position your product in the market?
– are you convinced your concept is sustainable?
– assuming the crisis will be over one day, are you planning to raise the price to the original level?
thanks for filling me in guys, love your blog, Mark!
Comment by 12jball -
Just wondering if anyone in the US is NOT a CEO these days?
Comment by Alex -
Mark,
1st I would like to applaud Jeremy for his tenacity and innovativeness. It did sell some shirts and got our attention.
It takes moxy to stick with it when everyone else would throw in the t-shirt.
On that note If this is the real Mark Cuban then I would like to talk to you.
Most people would ask for a formal introduction, well I’m not most people. I have ideas constantly and half of them should be funded and the others shelved and reviewed later. I’m not shy about my talents or competencies. It’s my belief you have to go out ask for help, it just doesn’t fall from the sky. Oh I’m doing ok by everyones standards except mine. I’m an International Inventor have a 3 page resume and multiple degrees. Oh I forgot a few businesses. Here is my problem I can do so much more and impact so many people from children to adults with the right funding. Oh I’m making a small impact now but with the right resources I could get where I need to be a lot quicker.
If your interested contact me I guarantee you won’t be sorry you did.
ps. The golf shoe I developed for physically challenged people was patented in US and Internationally It was even reviwed by ‘NIKE”
Comment by Tony Zelinko -
I agree with steve p. But I also voted for Obama and I don’t consider myself a socialist.
Tees and Tats idea is very creative– I mean look how many ppl are arguing about it on this message board. It is def getting a reaction.
R. Hancox– you are def misguided– you say that he created this idea bc he wants to get his customers to bank on the economy going down. I don’t think he is doing that at all– he obviously wants the economy to improve for his sake and the world sake, but he is creating a concept that will assure customers if the economy does get worse (hope not) customers feel more comfterable getting a product that they want.
Comment by dillon s -
I totally disagree with you. We live in a capitalist country– ppl can charge whatever they want. If you dont wnt to buy it because you don’t feel like its worth it– or you can’t afford it– then don’t buy it– but you sound like a big whiner.
I don’t think you understand how the business world works. lets say your right and it cost $20 dollars to manufacture tees (prob something close to that bc they are manufacturing small quantity and high end material)– they are selling tees for $110 at stores. They do not sell it to stores for $110, rather they sell tees to store for a wholesale price– most probably like 35 or 40 dollars. So they make a $15 dollar profit– is that a self-centered amount? R. Hancox you sound like an idiot.
You prob are a huuuge Obama supporter– lefty socialist whackjob
Thank you Mark for including this article– it is a brilliant marketing idea– and that is what we need from young start-ups– creative ideas to get us out of this mess.
You might not like the business that they sell high-end goods. But they are not targeting you, they are targeting people who have money and enjoy the finer things in life. How about you stop being so jelous and you enjoy your burger king diet.
Comment by steve p -
Your opening thoughts are dead on.
Comment by Miles Archer -
Wow. $110 t-shirt. What a self-centered concept. Now the economy is tanking so you can get one for $55. Wow. Such a deal.
Consider the following: at $110, one might think he’s getting 100% profit on each shirt. But he lowers it to $55, which blows that theory out of the water. As with any T-shirt, it costs less than $20 to produce, even after paying for the artwork, yet it’s that good old American spirit to stick it to the public so he can make over 150% profit.
One more thing to consider: while you could certainly argue that his new strategy of giving back $5 for every 100 pt loss on the Dow is innovative, think about it. He wants his customers to bank on the economy getting worse. Not that any one t-shirt buyer has the power to sink the economy on their own, but that kind of message is that?
If he wants to really make money, stop charging $110 for a t-shirt. They’re commodities, not treasures. Mossimo proved this in the 80’s and 90’s. I know. I worked for the company that printed his shirts.
Comment by R. Hancox -
I like the idea for two reasons. You should increase sales due to the “insurance” on the market, but most importantly you’re getting valuable addresses to send advertisements if you choose. 🙂
Comment by Chris Hammon -
Second, if you are having a rough time with sales. get the “designer” to come up with a new “line of designs” and sell those shirts for “your discounted price”. ‘brand the new design as the “x” collection. and market that to your stores.
Comment by halim -
It is a marketing idea and a good one. He took what’s hot in today’s topic and used it as a marketing campaign. He also took a chance by sending Mark this info and Mark helped him out a little (because he happened to like the idea). In a way, it is no diffferent than an end-of-month sale that a store has or the lifetime guarantee that most people would never claim. But it does get people talking and incrase the visibility. The applauding part is the creativity of the idea.
Comment by Jimmy -
Seriously: this sort of thing adds nothing to the nation’s wealth.
Let’s find some entrepreneurs developing products that actually add value instead of merely providing a shopping thrill for those with lots of disposable income.
Comment by guidu -
ok. fine. I’ll give him a serious idea. I dont think he deserves it.. but ill do it.
First. Don’t discount your 110 t-shirt more than 15 dollars.
Second, if you are having a rough time with sales. get the “designer” to come up with a new “line of designs” and sell those shirts for “your discounted price”. ‘brand the new design as the “x” collection. and market that to your stores.
This way you keep your most profitable customers that buy at 110. and you branch out to more clients in a new market range.
If you just simply discount “ie devalue” your product by more than 50 percent you are going to lose your best and most profitable customers.. you just made that “unique” designers brand “less special”..
There you go. not a hard concept. but VERY important. expand your brand to multiple ‘lines’ sell more of the line that is “selling” but still offer the “premium line”. The increases the value of your overal brand.
go in peace.
savednoteguy.
Comment by savednoteguy -
Do you get the $5 back when the DOW goes up?
Comment by Elbee -
Forget the DOW index. Liked a design and went to order a shirt and found out that there were no 2XL. This is America, you can charge anything you want for a shirt but at least at that price point accomodate everybody with the money to buy. If I was selling $110 tshirts I would offer 5X!
Comment by RickM -
‘you are all geniuses’ absolutely knocks it out of the park here. Hilarious stuff.
Selling $110 t-shirts definitely does not define the entreprenurial spirit of our country. Anyone wonder why all the stores he was selling at last year went out of business? Here’s a shot in the dark: They were selling $110 T-shirts.
It’s shocking that this business model didn’t work as soon as credit started drying up. I wonder if there is any correlation between the $110 T-shirt market and the guys making $40k a year while driving leased BMW convertibles?
Let’s be frank, it’s a horrid business model that when things went bad he decided to cut prices by 50% and put lipstick on the business model. Time to come up with a new idea.
Comment by Joe -
hey “you are all geniuses” you truly don’t get it. You have probably never owned a company. You have never experienced the difficulty it is to run a company. jeremy is creating a marketing idea that will help increase his sales. I bought a tee- it worked on me. He is not saying to people that they need to consume consume consume– he is letting consumers who want to buy merchandise feel more comfterable spending (if they want to) in this difficult economy. He is not saying you need to buy.
Also if you go to the website and read the rules. There is a max of a 700 point drop– that Tees and tats has to pay. So if the customer buys shirt for $55 dollars and in two months the Dow drops 700 points (god forbid) Tees and tats has to pay customer 35 dollars back– they are still amking $20 dollars. So they are always going to make a profit. brilliant idea Jeremy.
“you are all geniuses” is def not a genius.
Comment by h dillon -
that’s TOTALLY true that the entreprenurial spirit of wankers selling high-priced t-shirts dies then america will be a much worse place. people selling expensive crap to rich people with nothing to talk about but their t-shirts is what has made this country great, and i am pleased to the depths of my soul that jeremy has come up with a (probably not profitable) gimmick to convince people worried about the economy to consume, consume, consume. also, it’s an interesting piece of social satire that he has made a pretty massive bet regarding the future of his company and his employees that, essentially, the stock market won’t go down. well played, sir. entrepreneur, concerned citizen, artist… what a man! thanks for highlighting him, mark.
Comment by you are all geniuses -
Thanks for the clarification, Alexander. I own a busienss in the same town as John Earle (Johnny Cupcakes) who is still doing quite well in the t-shirt business. He designs shirts that people want to buy, it’s as simple as that.
Enjoy the weekend…and the wine!
Jeremy – Maybe you can get some ideas from John’s blog. Good luck!
http://www.johnnycupcakes.com/blog/
Comment by Michael -
Hey I just went to the Tees and Tats website– really awesome site, and I bought a tee (the Giesha) seriously insane design. It explains the concept in the blog section of the website. They are smart and they put a clause that says “for every 100 points the DOW drops within two months after the time of purchase you will receive $5
dollars off of their purchase price. (maximum 700 points)”
Comment by h dillon -
Good story Mark.I feel bad for these up and coming entrepreneurs. Its not like it use to be.
Well Bush (i like him)has landed in Canada Cow town that is I missed is $400 plate dinner. Wish I had of went.
Completely of topic here but i did a Short on NI. Some tech company.
Now it had a similar pattern to BNI. But I chose to short NI. WEll the market is tanking today. Every tech stock on my board is down accept the one I short. So why is that happening? Is it being artificially held up? Why is this one up 8 days in a row and it should be rolling over but isn’t. Weird.
Anyway i also shorted apple finally it has made a slight move down.
Have a good one,
Comment by Russo -
@michael
Dead serious! And yep, you are right about the shirt being worn. You are also right about the fact that Jeremy has taken what could have been a progressively dire situation and found a a good marketing hook (you call it publicity) to turn it around.
However, you are missing the point in my comment or perhaps I didn’t develop it fully or articulate it properly.
Your are focusing on the “traditional” fact of buying a shirt which after it is worn is technically worth less so why would you want to pay more for it, right? I agree with you in this context.
What you are not doing is looking at the broader issue in its full context. Jeremy is selling a tee-shirt with a “game” chaser.
The profile of his typical customer is not going to buy his product because Jeremy will cut him a check for $10 if the DOW goes down 100 points. He would likely buy the product anyway.
The customer who is going to buy tee-shirts to get $10 back is likely the type who will shop at Target for the $10 discount on a pack of Hanes. So perhaps you do not fit Jeremy’s ideal customer profile (oops, sorry Jeremy, I think I just lost you your biggest customer!) Sorry, Michael, I couldn’t help that barb – must be the second glass of superb St. Emilion that I just quaffed. Hey, waddya want from me, its Friday evening here in Paris!
Back to my point:
What I see as an opportunity for Jeremy is that he has taken this “traditional” transaction (i.e. buy a shirt from Jeremy take it home – forget about Jeremey- until the day that you maybe go back to him to buy another one or someone asks you “hey where did you buy that shirt?”) and he has “socialized” it by creating another, parallel, value proposition – not necessarily in just in the monetary sense of get $10 bucks back if the DOW goes down – but in the sense of a relevant contextual hook to his product – think Fun, Game, Cool – especially where his product is essentially a non-essential item for most people I think he has created a stronger connection with his customer – after the sale has been made.
This last concept is important as it is what made the Japanese commercial model strong. They believed that the sale starts after the sale has been made. The American model was never quite anchored in this thinking – its more like “take the money and run” school of thinking where customer service and “delight” was an afterthought – eg. most cell companys in the US!. I think I am getting off point here.
Bottom-line, I think Jeremy has the opportunity to run with this initial hook and iterate it into something more by “Bringing Social to Tee-Shirts” in the same way Marc Canter has been evangelizing the notion of “Bringing Social to Software” meme for the past number of years which is finally coming to pass! (if you don’t already Marc’s blog, you may find it informative: http://blog.broadbandmechanics.com/ )
If Jeremy can sell some tee-shirts and provide some follow-on entertainment while engaging and building community with his customers [treating them as constituents] (or even guys like us who have not bought his shirts, but are talking about his concept) then he is earning his keep.
Jeremy: One more thing you can do to be more of a Mensch (see wikipedia for definition!) in the eyes of your constituents is to offer to donate the $10 per 100 pts to the customer’s favourite charity and write it off on your taxes – everyone wins!
Michael, Jeremy: Good luck to the both of you in your ambitions!
… I am going to pour myself a third glass and then off to dinner. Have a great weekend all your Cubanistas (that’s what Mark C’s followers are called, right?)!
Peace out,
@AAinslie
Comment by Alexander Ainslie -
I meant to ask, do you have a limit? What if it drops 1100 points will you buy refunding the entire purchase? You may want to put a disclaimer in there so you are at least still breaking even on your shirts.
Comment by keldrin -
While I wouldn’t even consider ever spending $110 on a t-shirt, if other people are willing to buy for that price then all the power to you – I would charge the same amount if people were willing to spend it. I applaud you for your clever business idea, I think it’s people like this who think outside the box that will survive the recession.
Comment by keldrin -
Jeremy– My business is also feeling the economic downturn and my team is truly thinking about closing down shop. Your motivation and creativity, has truly inspired me. I will not let my business fail– it is way too important. Thank you Mark for showing us this letter that Jeremy sent to you. It reminds me of what an amazing country we live in, when sometimes it doesn’t seem so clear. Thanks again. Truly inspiring.
Comment by david pater -
Cool gimmick. Still an over-priced T-shirt no matter what the DOW does.
Comment by Bobby J. -
It is this type of creativity that breeds success. Regardless of what he was selling the shirts for and what he is not selling them for makes no difference really. The fact is, it was not meant to be sold to poor people anyways. So for his market $50 is cheap compared to his earlier price. That’s smart business. And the rebate is actually a very well played illusion of money savings. You get a few bucks back if the economy sucks worse so you can buy a pack or two of cigarettes and smoke your way into a solution 😉
Comment by Web Design Taxi -
Great idea, Jeremy.
I, too, am in a similar predicament in that I’m 22 and own my own business wherein we’re fighting for our lives just to keep the lights on and we’re loving the ride. I think Jeremy’s pricing model is very innovative, however what will be absolutely painful is if the dow were to drop by the equivalent points to the price of each shirt. As unlikely as that is – let’s pray it is unlikely – one can never rule that out after the absolute madness we saw towards the end of last year.
“Nothing ventured nothing gained”, Jeremy, and while your t-shirt is priced way out of my budget, I’m rooting for your team.
Comment by Motheo -
http://store.theonion.com/your-favorite-band-sucks-p-78.html
Is a much better investment at $20
Comment by Will -
Alexander: Are you serious? Why would anyone pay more for a product they bought two months ago? My shirt is worn, starting to fade and needs to be replaced in a few months; I will support the company by purchasing a new t-shirt.
Jeremy is using this concept for publicity, nothing more. It’s a creative idea that deserves coverage from popular bloggers like Mark. I am glad to see that creative entrepreneurs like Jeremy are being recognized; thanks Mark!
Comment by Michael -
Mark: thanks for sharing this
Jeremy: Bravo! Keep innovating!
Savednoteguy: Piss off and go innovate and produce something.
This is exactly what we all (Americans, Europeans/me, Asians, Nigerians – though not in the 409 sense please!) need to do and evangelize. We have to innovate our way out of this mess. We will come out of it stronger, wiser, richer and idealy more compassionate and humble.
Jeremy: now that you have got some support and traction for the DOW Cash Back model, it would be an interesting “social” experiment to go bi-directional with your offer and price a product that also asks your customers to pay up an upside should the DOW by 100 points (say capped both ways within a bracket of 500 points). If you implement this, then you could also introduce a social “kudos” element on your site (or preferably your company page on Facebook so you get the viral hook via the “stream”) – customer “X” just received $10 from us / you get 1 star/point – customer “Y” just sent us $10 / they get 1 star/point etc. It would be interesting to see if your customers are willing to give as well as receive!
Good luck. Keep up the good work and spread your enthusiasm around your immediate ecosystem.
Comment by Alexander Ainslie -
I am surprised this works for Jeremy’s business. Any person buying a $55 t-shirt is not worrying about the DJIA average, and most likely can afford a $100 t-shirt. Now Jeremy needs to closely track the date of sale, DJIA average, mail checks, manage mailing lists, and much more.
With the price cut, you now need to sell over twice as many t-shirts at this price to recapture the lost margin. If the cost of each shirt is $10, the rebate could potentially be $40 if the DJIA drops from 7,500 to 6,700. I feel like this concept puts the business at risk.
Comment by Michael -
wow. a 110 dollar t-shirt.
Well he’s certainly marketing it to the right market.
Billionaires.. at 55 bucks he still has a pretty darn good margin.. only 50 more dollars to go to actually be Competative!
It is good though that he’s learning the value of price high.. then discount. although i think the example is extreme.
Comment by savednoteguy -