Thought Leaders in E-Commerce: Philip Rooke, CEO of Spreadshirt (Part 4)

Sramana Mitra: Talk to me a bit about the business model, both from what you are doing as well as trends in this kind of marketplace business model. How does this work? How much does the seller get? How much do you get?

Philip Rooke: We have a basic charge. Depending on the product, there is a charge for printing and delivering of T-shirts. The seller can add their own commission on top of that to set their own pricing. Sometimes, people add only 50 cents because they’re not really worried about making a profit. We have other people who have used T-shirts as entry to get into an event, and they’ve added $50. They can govern how much they want to add.

Sramana Mitra: Your basic charge is flat or is that variable?

Philip Rooke: It’s flat. There’s no minimum commitment. You don’t have to pay anything upfront. If somebody buys one of your ideas, we print and we then send you the commission. A T-shirt in the US will be about $9 to $10. People very often add $7 to $8 as commission. If somebody comes along and buys that T-shirt  for $17, we take that money and send the $7 to the person who put the idea in.

Sramana Mitra: Of course, a lot of the marketplaces are more on a commission-based model. What are the trends that you’re seeing in the marketplace business in general? It’s not exactly a marketplace. It’s kind of a marketplace.

Philip Rooke: It’s kind of a marketplace, except we do the fulfillment. Normally, marketplaces take your product and then you do the fulfillment. The difference is those kind of marketplaces favor the big people – people who have a large amount of effort and energy to be able to support that properly and provide a high-quality of service. If you’re going to be selling on Amazon, you got to have a reasonable operation and ability to keep up with the Amazon KPIs. Even if you’re selling on eBay and if you wanted to be a trusted seller, your score matters in terms of your ranking and how people are buying from you. In our case, we can help the little people whether it’s Miranda who’s busy being a comedian or a local artist who’s busy.

Sramana Mitra: You’re essentially outsourcing the entire store management and even manufacturing of the merchandise. They’re essentially doing just the design part. It’s not exactly a marketplace. I understand where you’re coming from.

Philip Rooke: We’re enabling a marketplace for creative people.

Sramana Mitra: Is there anything else that you want to add?

Philip Rooke: This is a general global trend and this is a trend towards enabling small businesses and individuals to get into e-commerce. We’re pushing the envelope and allowing more interesting things to come into market. Essentially, this model could be applied to 3D printing and all sorts of other areas as well that would allow ideas to come to market in a better way.

Sramana Mitra: What is the scale of your company? Did you say you were doing $100 million in sales?

Philip Rooke: Yes, we’re doing $100 million.

Sramana Mitra: This is the topline? $100 million of merchandise sales. This includes the part that goes to the merchants?

Philip Rooke: Yes, this includes the part that’s going to the merchants.

Sramana Mitra: Great. Thanks for the time.

This segment is part 4 in the series : Thought Leaders in E-Commerce: Philip Rooke, CEO of Spreadshirt
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