NEW YORK/MADRID (Reuters) – The holy grail for clothing brands faced with the increasing uncertainty and costs in their global supply chains, it is to their merchandise closer to the point of sale.
FILE PHOTO: The logo of Amazon is seen in the company’s logistics centre in Boves, France, 13 May 2019. REUTERS/Pascal Rossignol/File Photo
Entertainment companies Walt Disney Co Dr. Seuss more and more Amazon.com Inc. ‘ s t-shirt printing service to help you to get there. The trend is up the end of the traditional licensing model, where brands worked with clothing wholesalers to produce garments and get them in the shops.
The ‘Merch from Amazon on-demand printing service, in its third full year of operation, works by printing t-shirts as soon as an order arrives, which means that creators of content, such as video game makers and pay-TV channels not to commit to a large merchandise inventory in advance.
This enables companies to offer t-shirts with niche characters that would not justify broad dissemination.
“You can’ night on Amazon all the merchandise for sale and then if your book sales you just make it and ship it,” said intellectual property attorney Gaston Kroub. “It completely cuts out that whole traditional supply chain.”
The expansion of the service is another way in which Amazon is a major player in the clothing industry. The company had a group of patents granted in the past few years, where a process to integrate fabric printing, cutting, sewing and shipping to a customer in a computer-driven process.
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Bringing clothing manufacture back to the United States and Europe would eliminate the long in production and deployment for large orders that are inherent for Western clothing brands sourcing from countries like China, Vietnam and Indonesia.
When fabric cutting is delayed until the last moment and the clothing are manufactured on request, it can also prevent the pile of unsold inventory, allowing brands to sell more stock at full price.
Amazon told Reuters the ‘Merch from Amazon’ format is allowed for the offering of designs in 21 colours and 15 sizes without brands and content creators have to manage the stock.
It said that it was interested in all brand-types of the major entertainment brands to musicians, consumer products, and social media influencers with a minimum of 100,000 followers.
After a complete revolution of the habits of the consumer, which has led to the shuttering of thousands of small clothing shops, Amazon has overtaken Walmart Inc. as the most shopped clothing retailer in the United States and exceeds the Marks & Spencer Group PLC in great Britain, according to surveys.
Amazon has a try-before-you-buy service as well as many of its own private label clothing brands.
Royalty income from the sale of the licensed goods and services worldwide amounted to $14.5 billion last year, an increase of 2.6% from 2017, according to professional licensing association LIMA, with more than half coming from the U.S. and Canada.
Entertainment and character licensing was the largest industry category, while clothing, toys, and fashion was one of the largest product category, a LIMA-survey found.
Dr. Seuss Enterprises has increased sales through ‘Merch on Amazon of 40 percent since the opening of his shop on the site around 18 months ago, the sale of t-shirts and hoodies decorated with characters like The Grinch and The Cat in the Hat, president Susan Brandt told Reuters.
Dr. Seuss helps Amazon with the design, but Amazon sources the clothing and allows for the sale and distribution, a Dr. Seuss Enterprises spokeswoman said. Dr. Seuss also sells licensed products through stores such as Target Corp. and Walmart, ” she said.
Disney, who started printing t-shirts on-demand via Amazon in December 2016, has increased orders and expanded offerings of all franchises since then, including Disney, Star Wars, Pixar and Marvel, a company spokeswoman said.
Disney also makes use of the traditional licensing models for the production and sale of products, the spokeswoman said.
Pay-TV channel Cartoon Network, which began working with ‘Merch on Amazon in 2016, has added designs and increase profits through the service since then, a company spokeswoman said.
The brand is printed with other suppliers, but the on-demand service that makes it possible to give frequent design updates and offer secondary characters that are not available in the traditional shops, ” she said.
“The profit-sharing on-demand model existed before Amazon started with their work, but the size that they are, they have a flood,” said Gabi Seligsohn, former CEO and current member of the board of Kornit Digital Ltd., the Israeli company that textile printers for Merch from Amazon.
The company is growing. Environmental authorities in Philadelphia have agreed to an extension of Amazon’s Pennsylvania printing company, which makes almost 50% more printers, the Philadelphia Department of Environment told Reuters.
Amazon also has a second printing plant in Dallas, which was also recently granted provisional consent for the installation of more printers, a spokeswoman for the Texas Commission on Environmental Quality said.
Outside of the United States, Amazon has launched a “Merch Amazon’ printing plant in Poland in mid-2018 in the service of the British and German market.
Amazon said that it had not made any announcements with respect to the extension.
Show more interest in on-demand clothing manufacture, Amazon is actively seeking patents in the space. Intellectual property lawyers say that this shows where the companies think the technology is going.
“There is no doubt that patenting activity is an indication of a kind of trend on the market,” said John Lanza, Boston-based intellectual property lawyer with Foley & Lardner llp. “On-demand clothing manufacture is very hot.”
In 2017, Amazon Technologies received a U.S. patent for on-demand clothing manufacture in which a textile printer, textile milling and computing device are connected with cut-out garment patterns and align them for sewing in response to the electronic orders.
Amazon Technologies granted other patents linked to on-demand clothing manufacture since then, including continuous feed fabric cutting using lasers and an automated system that uses fluorescent ink, as a guide for cutting fabric.
Amazon, a prolific patent generator, and one of the United States’ top patent holder, refused to say whether he was one of the patents in production. Amazon said that it served a number of forward-looking patent applications in exploring new technologies and said that they do not necessarily reflect the current developments of products and services.
“The trend for the things is always on the demand will only increase,” says Lanza.
Writing by Sonya Dowsett; editing by Vanessa O’connell and Edward Tobin