Time to play catch up with the blog again. After finishing all the necessary paperwork to apply for a merchant account, we’re now gearing up to for the next release of the site.

There won’t be any earth shattering features on our next iteration; it’s chiefly an upgrade of the current system. We’ll be migrating from PayPal to an in-house payment page, switching servers from Yahoo! Small Business to BlueHost, and fine tuning several little things. Once that’s done, we will finally begin flexing our marketing muscles. Should be tons of fun.

Swiftlabel is now registered in Quebec. The most difficult part was figuring out how to sort out the relationship of the new entity with Swiftlabel LLC, the company we first registered (we did so as the LLC, which doesn’t exist in Canada, provides protection for partnerships and skirts corporate taxes so we’re not taxed both on income and dividends).

One possibility was to establish it as a subsidiary of Swiftlabel LLC. But then we’d have to incorporate the business and handle a pile of administrative work.

Instead, we registered Swiftlabel Quebec as a sole proprietorship and formed it as an independent entity whose sole purpose is to process transactions for Swiftlabel LLC for a small fee.

Doing so frees us from the red tape shackles of an inc. business, so we can concentrate on the T-shirt business, and reduces our tax burden, so maybe one day Business Partner can buy a yacht.

I’m really intrigued by the T-shirt voting craze. I only knew of two sites, Threadless and LaFraise, when I started shopping online for tees in 2005. There are now at least 8 sites out there, with newcomers perhaps inspired by LaFraise’s success as it tweaked and adapted an existing model to a different market.

Why did the LaFraise concept work? The buzz of a French startup and the interactive space certainly spurred a cult-like following for the site. But I think the chief catalyst at the outset was that LaFraise made French-themed tees, a by-product of having a French site. Considering that such products were few and far between at the time and that the French are proud of their language and culture, there was bound to be a huge market for this.

Now, the good folks at Spreadshirt, the new owner of Lafraise, have bigger ambitions. They’ve recently rolled out versions of the site in four other countries and maybe more are in the works. Can the company as well as other newcomers in the business mirror LaFraise’s achievement in France? Their success, in my opinion, will depend on the following three factors.

Enticing designers
There are two ways to get designers. You can either try to poach them from other sites or find graphic designers who’ve never used a T-shirt voting site. Artists would participate depending on the prize money offered, the probability that the artwork gets printed, and the prestige of being selected by a popular site.

Mobilising the electorate
This is the million dollar question - how do you get traffic and encourage people to vote? It’s pretty tough to find T-shirt addicts that are not constituents of Lafraise or Threadless and have the time to go at least each week to exercise their democratic right to get fine tees.

One option is to try to convert people who aren’t T-shirt addicts into one by offering prizes based on their level of participation, which most companies do. But the risk is that that’s all they’ll do. You need customers too. Nonetheless, I think there are opportunities albeit very small windows, as discussed below.

Differentiating the product
It’s interesting how Lafraise and Threadless each have their own particular style. Because that’s what the voters like, graphic designers will perpetuate this by adjusting their work to reflect the style that’s en vogue. One opportunity is to shoot for a different kind of look by finding the right artists to submit work.

Another possibility is to differentiate geographically by building a voting and design community from the grassroots level. But you have to pick the country carefully. For instance, I don’t think a Threadless type of community would work well in Japan because what’s usually cool in fashion over there are things that are not made in Japan. I just can’t see people voting and commenting on things they don’t understand.

One country I can see it work very well is Spain, where few people speak English (compared with say Germany) and many wear T-shirts (considering the warm weather they enjoy). Italy would be another possibility but most guys tend to wear collared shirts.

Anyway, I’m eager to see how things will unfold this year and see just how wrong I am.

T-shirt voting sites
A Better Tomorrow (Germany), www.a-better-tomorrow.com
Camiseteria (Brazil), www.camiseteria.com
LaFraise (France, Germany, UK, Norway, Finland), www.lafraise.com
Just 4 T (Belgium), www.just4t.com
Koalala (Belgium), www.koalala.net
Split The Atom (UK): www.splittheatom.com
Threadless (US): www.threadless.com
Teetonic (Scotland): www.teetonic.com

Source: research, HipHipUK.

Note: This post is back-dated (couldn’t get Internet access yesterday).

We’ve been thinking about this since we started working on Swiftlabel. Should we or should we not hold a design contest?

It didn’t make sense for us to run one right away. One reason is that we espouse a particular style (very German) and actually enjoy coming up with T-shirt ideas. The other is that you need most importantly traffic, which we obviously didn’t have, and a new approach, an untapped market or more prize money (which all help generate traffic) to make it work.

But now that phase one of the site is over and our tee collection is growing, we’re mulling over ways to do things differently from others. Before I touch on this, let me first talk about the benefits of holding a design contest.

I see two chief reasons: to get print-worthy designs and/or to get traffic to the site.

Attracting Graphic Designers
A successful contest gives tee companies the luxury of choosing from a myriad of designs. It’s a lucrative model as they only have to pay for what they’ll use. For designers, it’s a different story as a lot of them will do work without being paid. But it’s not as bleak as it may seem, as I hope the experience of creating art helps them to develop.

The best known design competition are run by Graniph with $9,000 for the top prize, Threadless with $1,500 plus other incentives, LaFraise with 1,000 euros ($1,400). For Graniph, it fetches them hip designs from European artists that Japanese love so much. For Threadless and LaFraise, the design contest is more than a platform to get new product. It acts as a linchpin to build a thriving online community.

Boosting Traffic
It’s quite an ingenious business model: run a design contest to attract artists, set up a voting system that encourages them to get friends to vote (promoting your site in the process), print designs that garner a lot of votes (a gauge for buying interest), and pay well to encourage designers to try over and over again.

Threadless, the first to successfully commercialise the idea, and LaFraise, the first for the French-speaking community, are now multi-million dollar businesses by creating and fostering an interactive platform to feed the addiction of T-shirt lovers.

The Swiftlabel Design Contest
Like the two stalwarts, we’re interested in doing both – bringing in great designers and creating an online community – but have a different context in mind. I can’t reveal more as it’s really easy to copy and we want to be the first ones to try it.

I’d say we’re about 3-4 months away from releasing phase two (depending on how we allocate our capital): one month for planning, one for programming, and one for testing. We’ll see if things can go on schedule this time.