Are T-Shirt Wholesalers Undercutting Print Shops?

For a while now, we’ve heard rumors and stories that the major blank t-shirt wholesalers sell their products online under different brand names.

Consumers can order the products with no resale certificate or tax ID number and simply send them to print shops to have them printed.

“Wholesalers are selling t-shirts for super cheap online, and my customers are bringing these shirts in and asking me to print on them!”

If you Google “buy bulk t-shirts,” you’re going to get a lot of results that don’t look familiar…but these sites do sell the brands and styles you’d expect them to. Without being savvy or having industry knowledge, any person off the street can go buy a few dozen t-shirts.

To some, this violates the spirit of the deal that print shops have with wholesale distributors.

After all, the major t-shirt wholesalers are well known for their unique service, custom prices, and deep relationships with print shops.

You might get to know your AlphaBroder or SanMar sales rep by name. Maybe they’ve even called you back in 2021 when supplies were super low and helped you find the elusive XLs or black hoodies.

But this all begs a question: is this a scandal brewing in the print industry…or just business as usual?

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What is a print shop’s business model, really?

Some print shops are probably closer to a lender than they are to a factory.

Ok, this sounds crazy, but hang in there with me for a second: some print shops are actually in the business of buying and selling large amounts of inventory that they don’t actually own.

Think about the traditional print shop’s business model.

You buy ten thousand shirts to print for Joe’s Marathon. Joe may or may not pay upfront. But either way, the print shop is expected to just…get ten thousand shirts.

You’re taking on all of the risk involved with procuring, processing, and then printing those shirts.

In other words, your little print shop is loaning Joe’s Marathon a huge advance.

It may not be a loan in the traditional sense. No note is signed and no terms are exchanged.

But you are “loaning” Joe’s Marathon your time, money, and risk-taking abilities.

Do you think Joe cares if the shirts are damaged, lost, delayed, misprinted, or just out of stock? Probably not.

Granted, a lot of print shops will just shrug this off as the cost of doing business. There’s real profit margin in securing goods for customers, and most customers won’t try to negotiate the price of bulk t-shirts with you. You can charge a markup on wholesale goods, after all, and that markup is often a huge driver of profits in a print shop.

The ideal situation for a print shop? A customer that doesn’t care where the shirts from at all and trusts the print shop to do it for them.

But we all know that ideal situations don’t last – and certainly aren’t the norm.

Customer supplied garments: danger zone!

Printing on customer supplied garments is something we’ve written about before.

There are a lot of pros and cons to offering to print on customer supplied garments.

The pros are obvious: you offload a lot of the risk and hassle of getting garments, you negotiate purely on print pricing, and your customer can get exactly what they want.

The cons are also obvious: you still have to count in and deal with the garments, your prices may have to go lower, and customers can do boneheaded stuff and bring you shirts that you can’t print on.

As soon as your customer starts doing math and trying to figure out your pricing, you’re at a huge disadvantage. While procuring goods for customers is a “normal” part of the print game, it should really be framed as a luxury service or high-end benefit. There’s a delicate balance to strike: you have to offer real value, but you can’t do it at too high of a price or your customer will start to wonder why t-shirts cost so much money.

Here’s an example of a sad story from a Facebook Group – I’ve omitted the author’s name for anonymity. Click for bigger.

If you’re worried about wholesalers undercutting print shops, you definitely shouldn’t accept customer supplied garments.

That’s exactly how it can happen!

Who’s selling t-shirts?

We’ve talked about the big 4 distributors at length. And yes, we have relationships with these companies. They’re essential to the health and success of the industry.

But they have profit motives too.

Let’s take a cursory look at who’s advertising for bulk t-shirts online.

A few of the names that come up: Custom Ink, Shirtmax, Cheapestees.com, BulkApparel, Threadsy.com, JiffyTees, ShirtSpace, and even Amazon.com.

Wait, Amazon sells wholesale t-shirts? Yes, and just about everything else. Amazon is attempting to be a wholesale provider’s marketplace. They’re not actually making these products, they’re just acting as the central hub. They may also be involved with distribution since they have such tremendous capacity after their significant investments in warehouses, shipping, and logistics. From their wholesaler site” “Every week we work with over 2,500 resellers across brick and mortar and authorized resellers.” They even did a case study for Hanes.

So you won’t have an easy time finding out who “really owns” these businesses, but it’s possible. I’m going to leave that detective work to more interested parties. The point here is that you should know your options and know what your customers can easily find.

Does this hurt or help the industry?

It’s easy to see opinions becoming inflamed over this issue. I’ve seen it already – some folks are truly upset and feel betrayed by this.

It’s a touchy subject. There’s money on the line.

Some print shops make virtually all of their profits from marking up wholesale goods.

Others get it from print costs and value-added services.

Your business model probably determines your opinion here. If you’re extremely sensitive to the price of garments, you probably benefit from the price competition that these wholesale outlets creates. After all, you can use these services too.

If you’re running a traditional print shop that uses its wholesale markups as a driver for profitability, you have a huge vulnerability in the form of:

• Well-informed customers (or perhaps “annoying”)

• Price sensitive customers

• Price competition

• Margin compression

There are better and more sustainable ways to compete and differentiate your print shop than competing purely on the price of wholesale goods. That is a sure-fire race to the bottom, and there’s likely a shop that’s much more adept at cutting prices than yours.

Ultimately, I suspect that having multiple routes to purchase wholesale goods is inevitable. T-shirts are a mass produced global commodity. Millions and millions of t-shirts are produced every month. It’s impossible to imagine that every single t-shirt will be bought and sold through “official” channels.

But is it good or bad? That’s a harder question to answer. Competition is healthy, but the actual value of a t-shirt is higher than its wholesale price.

As an industry, we should welcome and want higher prices for our end products.

The value you add as a print shop comes in the form of your prints, your service, and your unique voice – not simply getting someone a mass-produced item for a few bucks cheaper.

The flipside here: this isn’t even new. Wholesalers have sold through alternative channels for decades.

The seasoned industry vets remember this and call it out!

In other words: adapt or don’t, but definitely do not be surprised.

A policy to prevent undercutting: educate customers

So you’re determined to prevent undercutting. Where do you start? With your shop’s terms and conditions…it’s policies.

Having very clear and forceful policies in place in your shop is an easy win. Think of it like customer education: they should know and understand every step of the process.

With this framing, you don’t need to compete with wholesale t-shirt prices. Customers know that your shop doesn’t accept outside garments and don’t argue about it…because you framed the problem appropriately.

How to tell customers not to supply their own garments

You can frame the issue of customer supplied garments so that you’re in the driver’s seat. Here are a few ideas.

• We’re the experts in t-shirts.

• There’s no guarantee that you’ll get what you want.

• Some of these retailers aren’t so legitimate, but we have an authorized account directly with the manufacturers.

• We know the right inks and equipment for printing.

• We take on the risk of purchasing, shipping, and sorting the garments.

• It’s much cheaper and easier for us to do this so you can get back to what you like to do.

Customers should know from the beginning that you don’t accept customer supplied garments and don’t negotiate on wholesale prices. But they shouldn’t really care, either!

Your value goes beyond the prices. When you get this right, wholesale prices aren’t even a part of the discussion

A couple of bullet points you might want to include in your Printavo terms and conditions:

• No refunds: simplify your life!

• Get paid 100% down: a no-brainer to shore up cash flow

• Spoilage policy: make customers order 1-5% more than they want printed

• Misprint policy: if you misprint something, you don’t pay for it (or only pay up to a certain amount)