We’ve discussed a T-shirt cause marketing by social enterprises in the past with outfits like Rosa Loves. But most of those efforts were based on e-commerce business models.
Now there’s a new social enterprise that includes bricks and mortar retailers as part of its business model. Called Giving Tee, here’s how it works: Retailers sell Giving Tee T-shirt designs in their stores for $20. When customers enter a code on the hangtag of the Tee it triggers a donation to one of Giving Tee’s featured causes.
The revenue split is as follows: The cause gets $5, the retailer gets $5, the designer (Giving Tee crowd-sources the designs) gets $1, and Giving Tee gets the remainder. After costs Giving Tee says it nets $2-$3.
The usual questions apply with these sorts of enterprises. How do we know that the company actually makes the donation? How long is the lag between the time when the customer enters the code and the charity gets the money?
But the biggest question may be, is this business model sustainable since the inventory and carrying costs are higher? With Rosa Loves and other T-shirt cause marketers, the only inventory expense is the T-shirt blanks, since they routinely make the T-shirts after the order is confirmed.
There are a couple of other questions. Will designers provide enough value for a $1 per Tee? Likewise, will retailers sell a product for at $20 for a $5 margin when they’re accustomed to making $10 (assuming a 100% retail markup)?
I hope Giving Tee succeeds for at least a couple of reasons. New firms create more jobs than do more established firms according to studies by the Kauffman Foundation. As a cause marketer I personally want all reputable social enterprises to thrive.
But I suspect Giving Tee, which is a new firm, is going to need to tweak its business model a little before success comes.