Zazzle aims to dazzle with on-demand merchandise
SANTA CLARA, Calif. -- When it comes to a product with pizazz, "It doesn't get any better than this," says Zazzle.com co-founder Jeff Beaver.
He's talking about a '70s-era Star Wars poster, not widely available in any retail store, featuring Princess Leia, Han Solo and Luke Skywalker in a fantasy setting, rocking out on stage at a concert. Customers of Zazzle can have the design printed on posters, T-shirts or mugs.
"We have thousands of these types of designs," Beaver says. Deep stock is "the beauty of on-demand merchandise."
Love that Goofy T-shirt but want it in red instead of white? No problem. Can't figure out where to get a Barack Obama "Yes, I Can" bumper sticker? Zazzle can help you there, too.
You get the idea. You can customize your own photos or other images or use licensed artwork available from some of the biggest names in entertainment, including Walt Disney, disLucasfilm, 20th Century Fox and Warner Music. wmg
"Anything you can imagine being sold in a mall, we want to offer online as a custom-made product," says Beaver, 28, who co-founded Zazzle with brother Bobby while both attended Stanford University. "We think the future of commerce is in micro brands."
Zazzle sees itself as an eBay-style marketplace for buyers and sellers. At Zazzle, once you've uploaded your custom design, you can sell it online. You can link to your Zazzle goods on your website or blog.
Custom T-shirts and the like may not be big business today, but it will be, says Marshal Cohen, a fashion industry analyst for market tracker NPD Group.
"Consumers — and, in particular, the younger generation — are expecting this kind of customization from products," he says. "Just look at the iPod. You design what you watch and listen to."
After a few years of tests, Zazzle got off the ground seriously in 2005 with T-shirts. The private company is shy about releasing sales statistics. It is not profitable, but it says business doubled in 2007 and is growing fast.
In February, it sold 900,000 different items to customers, up from 500,000 the previous February. All told, Zazzle says, it has sold 30 million products.
Zazzle's competition
Zazzle's primary competition is CafePress.com, which also offers custom T-shirts and accessories and has an e-commerce component that lets people sell their own creations. CafePress says it has 4.5 million registered users
Zazzle averaged 2 million visitors to its website in January, up from 1 million the previous January. Site traffic at CafePress was flat at 4.7 million visitors, year to year, according to measurement service ComScore Media Metrix.
Forty percent of Zazzle's revenue comes from apparel, 25% from on-demand postage and 35% from the "other" category, which includes mugs, posters, neckties and a new category introduced this week, business cards.
Zazzle is more than just a family-run website. It's also a manufacturing facility, churning out all those T-shirts, neckties, posters and stamps as soon as the orders come in.
The brothers figured out a way to make T-shirts while at Stanford. For help managing a manufacturing plant, they turned to their father, Zazzle CEO Robert Beaver, who had run business-to-business companies in the Palo Alto area and knew how to set up a factory.
"People question our logic. Why we would make this stuff ourselves?" says Robert Beaver, 61. "My fear was if we outsourced it, our vendors could become potential competitors."
Starting up a factory in Silicon Valley isn't done every day. San Francisco-based online book publisher Blurb sends its books to outside printers, while Redwood City-based Shutterfly produces its own photo prints at facilities here and elsewhere.
At Zazzle, brother Bobby is the engineering whiz who built the website, while Jeff focuses on sales and marketing. Dad knows finance. He helped raise $16 million from several firms, including early Google backer Kleiner Perkins Caufield & Byers.
Most of Zazzle's sales today come from shirts and accessories customers create with their personal photo collections, but the Beavers see that changing.
Firms such as Lucasfilm have thousands of images sitting around, waiting to be exploited, Jeff Beaver says, and Zazzle can turn them into cash.
Mike McGuire, an analyst at Gartner, says merchandising for movies, music and sports is potentially worth more to Zazzle over time than user-generated merchandise.
"It's a real, serious business, worth hundreds of millions of dollars yearly," he says.
Beyond the deals with entertainment companies, Zazzle also has an alliance with MySpace that offers 11,000 bands on the popular social network a vehicle to sell customized merchandise to fans. Zazzle takes a commission.
"Say you went to a concert and wanted to buy a shirt of the band but didn't like the designs," says Susan Kevorkian, an analyst at researcher IDC. "Come home, go to Zazzle, and go through many more designs, until you find one you like. The ability to customize your experience is a quality that really appeals to consumers today, especially younger ones."
The custom experience isn't just for shirts. Jeff Beaver says many bands opt for unique neckties and other merchandise.
About 250 employees work at Zazzle, down from about 500 during the holidays. "That's a challenge in this business," Robert Beaver says. "To ramp up to meet the demand."
What's next for Zazzle? Jeff Beaver sees a future that's way beyond T-shirts and business cards. "We want to be a place where users can create any product on demand."