Archive for the ‘Digital Economy’ Category

Being Expert: Bringing Personal Value to Those Around You

Wednesday, November 24th, 2010

I’ve written recently about how our economy is fundamentally changing. Everything seems to be disrupted and in a state of chaos. Normally routine business and established practices no longer function as they used to. Entire industries are being transformed along with the people in them. This brings me to the subject of today’s post, being an expert in your space and how you bring value to those around you.

In the past, our value was defined by how much we knew combined with the experience we accumulated over time. If you are truly an expert, every hour of everyday brings new experience and personal growth.

Those that find themselves in trouble today are the ones who learned their primary skill set a long time ago and have resisted learning more. They simply took what they were trained in and used it over and over, in a static kind of way. They would become more proficient at their daily performance and execution, much in the same way a golfer gets better at their swing if they practice the same swing over and over a thousand times. This is call “grooving.” Once you’re in a groove it is very difficult to get out of it. Grooving works very well when the skill does not require change to remain valuable.

In the knowledge or professional arena, our value was defined by how much knowledge we had and how specialized that knowledge was. If it was difficult material that took a long time to master, all the better. This meant we could charge more for our understanding of this knowledge. Think doctors, lawyers, and CPA’s. You could also think of master craftsmen as well.

This is the way we used to position ourselves and bring value, have knowledge that is hard to find, access, duplicate, and master.

Things are different now. With the rate at which technology, markets, and economies are changing, simply having the knowledge or experience is no longer enough. To remain an “expert” you must remain relevant to those you serve. To maintain your position of authority and value requires another skill set few truly master. It begins with the ability to be observational and recognize which elements of change are at work.

Simply observing isn’t the answer. The true answer is the ability to draw upon your knowledge and experience to synthesize new opportunities and solutions. This is an amazing time to be alive. There is so much disruptive change and technology around us.

The current recession and underlying permanent unemployment are perfect examples. The economies that are recovering quickly are the ones with low cost labor that can do many of the things our own skilled blue collar labor used to do. Now even our white collar workers are being outsourced by low cost offshore labor.

With rapid, pervasive change everywhere, we all have the opportunity to re-invent and redefine our value and skills. Our individual expertise comes from the ability to respond to these disruptive changes with innovative solutions that bring value to our customers and clients. As uncomfortable as change is, this is an amazing time of opportunity for those that can recognized and innovate new solutions.

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Why The Economy Isn’t Working Like It Used To

Monday, November 1st, 2010

We’ve all been through a very rough ride over the last two years. Some are surviving, holding on by their fingernails, others have failed, and still others have show some degree of growth. How is this possible? Being a student of life and an active observer, several things have become apparent and i’d like to share my observations.

First, there has been a fundamental change in the way we do things. It’s been developing for a number of years, but most of us aren’t fully aware of the significance. This has to do with change. In the old economy, our goal was to find a better way, prove it, refine it, apply it, and then make a gazillion widgets using these new methods or tools over and over until we made the next innovative extension of the idea. We’ve been doing just this for thousands of years, and it’s worked well because we’ve built our economies on the principle that knowledge is potential economic power. If guarded, and applied carefully, we can use this knowledge for our economic advantage.

Our patent system, professional trades, and even our higher education system are based on the controlled delivery of scarce knowledge. When knowledge was hard to find, and difficult to master, it was very easy to design an economy where knowledge could be exploited in this manner. We established an education system where the pure knowledge was hypothesized, fabricated, and proven. Later, often years later, this raw knowledge was commercialized and protected by the patent system so that technology originators could recover the development costs and profit in a protected environment for a certain number of years.

Today, all of that has changed. Along with the geometric growth of computer processor speed follows the same geometric growth of knowledge. Couple this blinding expansion of information with instant accessibility via search engines and we upset the economic model we’ve been using for thousands of years.

Things are moving too fast to achieve any real long term profit. In the printing industries it used to be that a company would buy a huge printing press (which we affectionately call “big iron.”) Their market would only be marginally established. Over a period of time, their huge investment in this big iron would pay off because of the opportunity it presented not only to the company, but to the marketplace. Simply having the capability was enough to attract new business. Often business would develop organically, independent of the actual marketing effort. Pricing was based on quality, service, and price. You could have any two of the three. Now, we need all three AND we’ve added smaller runs and faster turn times besides.

Today, that scenario is gone. Digital technologies are in continuous change. Products are obsolete as soon as they hit the market. Worse, the next generation digital is twice as fast at half the cost. It’s therefore an economic disadvantage to be the first one in. The only exception to this is if you have a fully developed marketing plan, with customers, and a backlog of orders in place. In this case you have a chance of success, but it is only fleeting at best.

The key to success in today’s information driven, expanding digital economy is to have a market that is expanding as fast as the technology. This has become an exceedingly illusive and difficult thing to find. In fact, it’s almost impossible to attain given the general state of the global economy today.

What will allow for success under these conditions requires a shift in our thinking. It’s clear we’ll need to do things differently. There are two things needed to enable this kind of growth. The first is to greatly develop and hone your skill of using Search to find and reach new customers. This is typically done through the use of keyword searches. Our ability to position our goods and services so that a big enough pool of potential customers can find you and buy your offerings will be essential.

In the old economy we did this by broadcasting who we were and how great we are. We would blast our messages out to the world in massive numbers, hoping enough potential customers would find us to sustain our business. That too has changed. Today, our customers are searching for solutions. To succeed, we must be seen as a relevant solution.

To accomplish this.

The second, and far more difficult challenge is to overcome what I call “legacy baggage.” These are the holdover thoughts, ideas, and practices of the old economy. This is tremendously difficult to achieve because our employees have been taught to learn once, use over and over. It is exactly what the old economy was built on. It no longer works. Today, employees must be retrained to be open minded and actively embrace change. It almost never happens that way. The reason is simple.

Most blue collar workers, and many white collar workers have abandoned continuous learning. School and learning threaten them. They don’t want to risk being exposed as less than competent. They don’t want t make a mistake or appear to be weak or dumb. In the process, there is a built-in resistance to anything new. The culture and environment of change is critical to your success. Yet, management rarely knows what they want to do, or how they’re actually going to accomplish it. They’re used to mandating by directive. That approach no longer works.

The resistance to change, or rather the resistance to the acceptance of new knowledge, is at the core of our ability to survive. This is why new start-ups and even offshore competition often get the new business. They don’t have the entrenched resistance to change. The one-two punch of “not invented here” and “we’ve never done it this way before” are the killers of innovation. The legacy baggage of the old economy are pulling us under. Look at your own organization and ask yourself honestly, it this isn’t the case for you. Recognizing the situation is the first step toward finding a solution.

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On Managing Internal Change

Friday, May 28th, 2010

I was having coffee with a couple of friends this morning and one of them said, “you know, you introduced me to a term a couple of years ago and I find myself using it all the time.” That term was “legacy baggage.” It was specifically meant to describe all the internal issues and excuses used by employees and people within an organization to resist change. Here are several examples”

    Not Invented Here
    We’ve Never Done it That Way Before
    We Tried That Once
    It Will Never Work
    That May Work in Other Places, But Not Here
    Our Business is Different

This is only the beginning of the the hundreds of excuses and obstacles thrown up to keep from implementing change. Our post today is about the root resistance to change.

In my experience with dozens of companies around the world, resistance to chance has it’s root in the learning culture of the individual or company. The old school industrial model taught the use of skills that would be used over and over again for decades. It did not recognize nor reward the continued improvement or continuing education of the employee. For professional practices, this is not the case. May certifications or license professions require ongoing education to keep the license current. The trades generally do not.

Most factory workers have a limited education. The dominant attitude is that they’ve done their time in school and they’re finished with that part of their lives. This is such a huge mistake and in direct conflict with what drives our world of commerce today.

We live in a world of constant change. If you aren’t positioning yourself or your company to face this head on, you are doomed. We cannot resist technological evolution. Resistance is futile. I cannot find a single example of an industry that has resisted change that is experiencing any kind of growth.

As a manager or owner, look at yourself first. How resistant to change are you? Do you read? Do you enjoy learning? If the answer is no, it will be very difficult to expect change within your control. You lead by example, and if you aren’t being progressive and forward looking, neither will your empolyees

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Great Ideas on Using LinkedIn

Monday, January 4th, 2010

I’m a huge believer in LinkedIn and other social media sites. They are, without a doubt, the next generation way to build our businesses. Today, I wanted to offer a guest blog post by Jim Gibson, publisher of Online Media Today. Jim’s blog post has created a great discussion in the Inbound Marketing Group on LinkedIn and I wanted to share it with you today. If you’re new to LinkedIn or want to get more out of using it, here are some great ideas. Enjoy.

By Jim Gibson - Publishing Partner, Online Media Today

Ten Tips When Using LinkedIn!

LinkedIn Tip #1: Have a Plan

Decide what you want to accomplish before you start. LinkedIn, like other business oriented social networking sites, offer a number of ways to generate the results you are after. Want to present your company? Looking for a job? Network with like-minded professionals? Need an answer? Want to establish yourself as a thought leader in your space? Each of these approaches present excellent opportunities to leverage professional online networks but make sure your plan is solid before you start.

LinkedIn Tip #2: Make Your Profile Easy to Digest

Tell your story but keep it brief. Short, pithy, sentences are more likely to be read than lengthy paragraphs. It’s like an elevator pitch (explained in less than 1 minute). Use bullet points. Readers often scan content and bullets help to highlight your successes. Provide details of your work history and make sure to highlight your special skills. Above all, make sure to check for proper grammar. Make sure to use important keywords when describing your professional experiences as these can help others find you more easily. And before you post your profile, read it aloud to yourself to hear how it sounds or better yet, ask a colleague to read it and tell you what they think.

LinkedIn Tip #3 – Your Profile Photo

You must have a picture! But make sure it’s a good one and shows you in a professional light. This is not the time to be too cutesy. Don’t upload the picture you took at your last toga party. For women, this is not the time to strike that sexy pose. Choose a professional and friendly picture that demonstrates your real personality yet shows you are here for business.

LinkedIn Tip #4: Give (and ask for) Recommendations
If you want recommendations on your profile, be prepared to ask for them. Look at those you are connected to and offer recommendations to those who deserve them. Make them short and to the point and be sure to include specific accomplishments – don’t be too general. The more genuine the recommendation you give, the more likely it is to be returned. Rule of thumb: if someone gives you a recommendation, thank them first then return the favor!

LinkedIn Tip #5: Join Groups

Be a contributor. Generate posts and respond to discussions. Group interactions provide you and your company great exposure. Check out other member profiles and follow their discussions. This is a great way to identify valuable contacts and network in meaningful ways.

LinkedIn Tip #6: Be the first to comment!

Clearly, it’s important to engage and interact with your audience. This helps to establish you as a valued contributor and can lead to more meaningful connections. But what most people do is look for posts that already have lots of comments and, only then, do they add theirs to the mix. The common thought, naturally being, posting where there are lots of people = lots more visibility.

Don’t get me wrong - that’s cool. But the important thing here is to support the post originator and there’s nothing cooler than to give that first (note: quality) acknowledgement. People post on social sites in order to get feedback and hate it when a post goes virtually unnoticed. The first one to post is a welcome sight (Ahhh.. someone noticed!) and helps to foster a new relationship with the person who started the discussion in the first place! This is the true meaning of social networking - one on one. But, by building relationships intelligently, one on ones ultimately lead to one on many.

Don’t be afraid to be the first to post a comment. A good post originator will thank you, appreciate you and most of all notice you. It’s done this way in real world social settings so why not acknowledge its effectiveness in the virtual world as well.

LinkedIn Tip #7: Connect with Thought LeadersFind those considered leaders in your industry. Search by company to find the people who are true influencers and follow what they are doing. Research who your industry leaders are through existing trade publications and find them on LinkedIn. If they are and we share a contact I know well, reach out through the contact for an introduction.

LinkedIn Tip #8 – Selecting Groups

Search groups using industry keywords and related topics
Look at the groups of industry leaders, subject matter experts and top executives
Look at groups your connections are members of
Use pertinent Q&A category and ask what groups people belong to
Pose the question in your current groups: “What other groups do you find useful?”

LinkedIn Tip #9 – Use the Search Feature

Using the “Search function on your LinkedIn home page (upper right), you can “search” on People, Jobs, Companies, Answers, Inbox and Groups.

If you move to the right of the search box and click on “Advanced,” you can search on keywords, name, company (current and past), geographic location, industry, job title (current and past), school, groups, by language, by the interest of those being searched, when they joined LinkedIn, those in or out of your network, and by relevance – and any combination of the above.

Find the companies you want to do business with and the people you need to meet at those companies. With over 50,000,000 business professionals registered, your search results can pay big dividends

LinkedIn Tip #10: Use Applications

LinkedIn has teamed up with some of the Internet’s premier companies to offer registered users access to new applications that enable you to collaborate on projects, get key insights, and present your work to your audience in interactive ways. Have a Power Point presentation you want to share? Install the free SlideShare app and instantly share your presentation to a wider audience. Need to brainstorm with your team on a new idea? Load Huddle Workspaces on your profile and instantly collaborate with your colleagues. There are many apps to choose from and several are showcased at: http://learn.linkedin.com/apps/.

Back from New Orleans

Monday, October 12th, 2009

The SGIA Show is done. It was my 30th show since 1976. The only ones I missed were 2001 cancelled by 9/11, 2005 cancelled by hurricane Katrina (also in NO), and Minneapolis in 2004. I missed Minneapolis due to a scheduling conflict with a client in Italy.

I used to really look forward to SGIA. It was the biggest show of the year and it was where all the latest technology was unveiled. It was also home to the best printing awards program in the industry. There was always plenty of buzz and it was generally four days of nonstop go-go-go.

The show is still huge, but not quite as big as days gone by. I think the economy and changes in the industry, as well as changes with tradeshows in general have taken a toll. People don’t like to travel. It’s expensive and a big hassle anymore. Manufacturers, especially the equipment companies face a huge expense to get the production machines in for just a few days.

The biggest change has been in the complexion of the show. Ten years ago there were a smattering of digital ink jet companies. The industry was dominated by companies with a long history in screen print. That’s all changed now. Huge companies like HP, Efi, Agfa, and the like now dominate the floor space. There are at least a dozen high end ink jet printers in the $1 Million - $3 Million range. Vehicle wraps are all the rage. It’s a different game now.

As for textile garment screen printing, the show is a shadow of itself. I would say 75% of the exhibit space was directly or indirectly related to digital printing. Of the remaining 25%, only a fraction was solely focused on garments. Most of those companies were actually local distributors with reps from the main supplier companies in their booths. Not exactly what most of us had in mind. The companies that were exhibiting equipment for textile decorating were, guess what, digital DirectToGarment.

Gone are the days of ballrooms packed with 700 people for a seminar. Knowledge is so easily available now. The educational program that used to be foundational, is only a shadow of itself. The content of the seminars and workshops is as good as ever, but the attendance is a different story.

We’re watching the evolution of technologies. There really isn’t anything we can do to stop it, nor should we. Survival of companies traditionally focused on screen printing will depend on their ability to adapt to new technologies, but more importantly to connect and remain relevant to their customers and markets. This includes suppliers as well as printers.

The sources and channels of where we get our information are changing too. The close relationships between associations and industry press don’t seem to be as important. Search and the Internet have replaced the press release. There are still reviews out here, but they’re different now.

I know one thing for sure, the quality of the information is much more suspect because there’s no editorial review. Anyone and anybody can throw out a piece and the public will take it at face value. There are no credentials. Anyone and everyone can declare themselves an expert and nobody seems to even notice.

The one thing you can’t really replace is the ability to actually meet face-to-face with colleagues. The networking, for me, is the number one priority. In fact, I think I spent a total of 6 hours over the three days on the show floor. The rest of the time was spent outside the convention center with client and vendor meetings. The evenings as well were full of meetings. As long as the show acts as a central gathering point, it will continue to have real value.

We certainly live in interesting times. I wonder what all this is going to look like in a couple of more years?

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I Got This Great Idea For a T Shirt! Part One

Wednesday, July 22nd, 2009

Over the years I bet I’ve heard this over a thousand times. It almost always happens when I meet someone I don’t know and explain to them what I do. As soon as they hear “I print t shirts” out comes the idea. They’re always excited about it and they all think they’re going to make a million dollars with the idea. So, here are a few thoughts on the marketing of t shirt ideas.

Before the Internet, having a good idea for a t shirt was like having a good idea for a book. The chances of anything happening were almost impossible. At best they would invest a few hundred dollars in art, screens, and production of a dozen shirts or so. They would give some to their friends and try to sell the rest.

In the 36 years I’ve been doing this business, I’ve only seen a handful of success stories. Those were people who already knew a thing or two about marketing anyway. All the others got an expensive education in Marketing 101.

With the Internet things have changed. The technology has changed too. Today you can use any one of a number of digital Direct-to-Garment (DTG) companies like Cafe Press, Zazzle, or Printfection. These companies allow you to create great one off images and they’ll even help you market your ideas across the Internet.

Second, before you go to all the expense of printing up a bunch of expensive samples do some basic market research to see if other people are as excited about your design as you are. Start by doing a Google Search (Your Design Idea) + T Shirt. So for instance do a search for: Funny Cat + T Shirt and see how many other people are thinking the same thing you are.

Here’s an IMPORTANT TIP - you WANT competition. If you don’t find anybody who’s doing something similar, it usually means it’s a weak idea or you haven’t hit the key idea in a way others will recognize. If you find 50 Funny Cat T Shirts (and there will be a bunch,) you’ll know there are other people who have gone to the trouble of developing and marketing a similar idea. This is a really GOOD sign.

If you’re encouraged by what you find, it’s onto the production step. In the early stages of your business, it’s probably best to go with digital DTG. With DTG, you pretty much go to the company website and follow their instructions to upload your art. Many websites will now allow you to build your design online in their design lab. This is an OK approach, but you are much better off doing your design work offline and simply uploading it through their order page.

You’ll want to make sure you have the art in the proper format. Here’s a hint, DO NOT do your art work in Microsoft Word or Power Point. They’re unacceptable formats. DO NOT do a screen capture from a web page. You’ll get horrible quality. Ask for guidance on the file format and preparation.

If you really believe in what you’ve got, go the extra mile and get the art done correctly right from the beginning. Great art is what sells shirts. When you have a great idea, you get their attention, but it’s the art that closes the deal. If you need to, get a REAL graphic designer to do the art for you. Having your cousin, who has Photoshop, do the art for you is like doing brain surgery on the kitchen table. Results are not going to be good.

With a few shirts in hand, it’s off to the races to see how many you’ll sell and how fast. Remember, the more people you can get your shirt in front of, the more exposure you’ll have. YouTube and Flickr can be great for this. Be sure to link to your sales page url so everyone who sees it can buy it.

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How Long Does Your Sales Cycle Take?

Wednesday, July 15th, 2009

How long does it take to make the sale? With the pressure from the economy ever present, this is the question we should all be asking. Keeping your sales pipeline full of prospects depends on your understanding of the sales cycle and how long the development of the cycle is. The longer the cycle, the more prospects you need in it.

Our business is guilty of what I call “sales by necessity.” This simply means, when the pipeline gets thin, we go out and try to drum up business. I’m guilty of this just like you are. When times are good, we don’t do any of this, we simply let the work come in and we stay busy. When it slows down, we start calling past customers or start pitching potential new accounts.

This is confusing and annoying to the prospects at the same time. It’s no wonder the reception is lukewarm at best. This is sales driven by our needs, not the needs of the customer or client. I’ve been watching many different industries for several years now and the sales cycle question is common across all of them. The way it’s handled in each industry differs.

The Internet Marketing community has it together the best. They understand the real value of their business lies in the relationship to their list. The “list” can mean prospects, joint venture partners, endorsed mailings, past customers, and current customers. They have metrics in place to measure effectiveness and they can tell you exactly what it costs at each phase of the cycle. Very impressive compared to how we do it in this business.

I harp all the time about getting your customer list together and keep it updated. At the very least, regular contact via a physically mailed newsletter or even a regularly scheduled email will do wonders in reminding those you do business with that you’re still around and open for business. You don’t need to pitch anything, although having specials, sales, etc. doesn’t hurt either. It’s the common courtesy of keeping in touch instead of constantly going to them when you need work that makes them appreciate you more.

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How Innovative Do You Want To Be?

Tuesday, July 14th, 2009

Innovation. One of the key things that’s supposed to differentiate you from your competition. It’s one of the things we value the most about being in business for ourselves. We’ve been told “If you build a better mousetrap the world will beat a path to your door.”

I used to believe this. It’s been one of the things that’s driven me and my businesses over the last 35+ years. But when I sit down and really look at the history and experience of the innovations, and the resulting business that’s resulted from those innovations, I have to take pause.

Personally, I derive a great deal of satisfaction from innovation. I love solving problems and finding a better way of doing things. But there’s a problem with it. Often the problems we choose to solve are only problems for us, and not others. At least, it isn’t a problem for them yet. And there in lies the dilemma.

People and companies that make innovation a key part of their existence position themselves at the front of technology, the market, or whatever. They’re at the cutting or bleeding edge. We used to joke about it, but when times get tight, business is off, and cash needs to be conserved, being on the bleeding edge can be dangerous to your business health. I don’t think it’s any coincidence the companies that innovate the ideas and introduce them are rarely the companies that make money with them.

Here’s the problem. For those on the edge, the problem is apparent and this triggers the need to solve it. For those not on the edge, well, they many not even know a problem exists. When this is the case, the innovators have to take valuable time and spend a bunch of money to educate the market to the extent and need for the problem to be solved. This diverts resources away from the innovation. Since the problem isn’t compelling for them, it’s easy not to embrace or invest in the solution.

Over the years, on more than one occasion, people have approached me at seminars, workshops, tradeshows, and so on and said something to the effect: “Mark, most of the time I don’t know what you’re talking about, but I know I’m going to need to know about in the future.” I used to laugh at it, but it got me to thinking what they were really saying.

It comes down to this. New, innovative ideas, inventions, procedures and the like are of little or no value unless they are tried, implemented, and embraced by the market. We all want a competitive advantage, but it is a thin line we walk between being too far out and having an advantage.

One of the main reasons I write and speak is to expose ideas. I’ve been criticized for this in the past as giving away my “secrets.” I laugh at this because there really are no secrets. Secrets usually mean some shortcut or quick fix to a problem that doesn’t require much effort. Most secrets are just incremental efficiency improvements.

My response to this charge is that it’s dangerous to be too far ahead. It’s a lot like running a long distance race. If you’re a good runner, it’s easy to separate yourself from the pack and if you aren’t careful, you’ll be too far ahead before you realiz you’ve missed a marker and you’re off course. By the time you realize you’re out of the race, you may not be able to recover.

Such is the case with innovation. Especially when it comes to technology. All those new cool gadgets and gizmos, all the new software and operating systems do no good if they aren’t reliable (meaning they work when you need them to work,) or there are other alternative innovations competing with them.

I’m not saying to stop innovating. That would be fundamentally wrong. What I am saying is to make sure the innovation is just slightly ahead of where the market currently is. If it’s an incremental improvement, pretty much everyone will “get it” and it becomes a no brainer to adopt.

It’s the truly innovative, industry changing innovations that are dangerous. Keep an eye out for who is adopting. Open a dialog with them. As long as you aren’t competitive in the same market, they’ll welcome your inquiries. You’ll give them someone else to commiserate with when the dang things break down or don’t work the way they’re supposed to.

For those with true innovations, the path is the same. Create a breadcrumb trail of steps toward the new innovation. The breadcrumbs are the small, babystep innovations that are the no brainers. Introduce them fairly quickly over a few months and you’ll have a much better chance of acceptance.

Adopting new ideas is a dangerous proposition. The inherent nature of people is to be risk averse. Change scares them. Business owners are especially prone to this. They don’t want to mess with something unless it’s broken. Why move ahead when we’re making money doing what we’re doing? That’s the subject of a whole new post.

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The Coming Sales Tax Storm for Online TShirt Companies

Friday, July 10th, 2009

We’re all aware of the amazing success of the online custom t shirt companies. You can build your design using the online design software, collaborate with others, and place your order to get the shirts printed. Great idea and it’s worked really well so far.

There are lots of winners in this model. The consumer wins because they can participate in creating their graphics without being a graphic designer. They also win because the freight is usually free and there is no sales tax due, so they save some money over the local guy. The final cost of the shirt may or may not be cheaper than doing it locally, but the experience is a lot more fun and they don’t have to deal with the local “silkscreener.”

The online t shirt company wins because they are almost always “virtual.” They don’t do the actual production. They contract with screen printers all over the place to do the work for them. Nothing at all wrong with that.

It allows the virtual company to find suppliers in the general geographic region where the original order was placed so they can get it produced close to the consumer and keep their transportation/shipping costs as low as possible. Nothing wrong with that and it’s good for the environment.

The screen printers are a big winner. Traditionally they are not good at marketing or sales. They are tech junkies who would just as soon print and never have to deal with a customer. Since the online guys are great at marketing, the screen printers get a steady stream of orders to keep them busy. What a great deal for everybody.

But there’s trouble brewing on the horizon. With 44 of the 50 states currently in a financial deficit situation they are ALL looking for ways to increase their revenue and online transactions are one of those areas where the microscope is focused. Those of us in California are probably in the worst situation right now.

Trouble is, the State of California has figured out that even if you are a third party manufacturer or drop shipper for an out-of-state company, you are still liable to collect the sales tax on orders produced and shipped to customers in the state even though you did not originate the order AND you do not know how much the order was sold for. The State has some bogus formula they use to concoct the Sales Tax owed.

One of our companies was caught in this situation a couple of years ago. During a routine sales tax audit the relationship to a large virtual online company was “discovered.” This set off all kinds of bells and whistles and ultimately we got a tax bill plus penalties for many THOUSANDS of dollars.

Fortunately the online company involved did the stand-up thing and ponied up the tax due, even though they were not obligated to under the “presence” or “nexus” statutes. However, this is only one case and I know for a fact other vendors operating in California have NOT been informed of this potential HUGE liability.

This is an enormous potential liability for companies who are acting as outsourced manufacturing. I don’t know how many other states have statutes like this, but I would bet it is more than you might imagine. If you do work for online custom t shirt companies, do yourself a favor and check this out before you get a nasty surprise when the tax man shows up demanding crazy amounts of money. The one thing we can count on for sure is that this is only the beginning.

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Seth Godin on Building Your Tribe and Being the Best

Friday, February 13th, 2009

Seth Godin is one of my favorite authors, bloggers, and visionaries. This interview at the TED Conference is particularly relevant for us in our industry today. It’s about surrounding yourself with your own Tribe of followers who “get” what you are all about. It fosters excellence and propagates that message.

Besides those two enormously important factors, surrounding yourself with advocates allows you to concentrate and focus your efforts at being excellent at what you do, whatever that may be. It is KEY to what we need to do today to get the economy back on track and protect our own business. Focus on influencing those areas where you are being heard. If you aren’t being heard or you don’t have a complelling story, you’re condemning yourself to a frustrated life of mediocrity surrounded by a crowd that doesn’t understand or appreciate you.

You can check out more of Seth Godin on his blog at http://sethgodin.typepad.com/ or his main page at http://www.sethgodin.com

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