Israeli tech aids Amazon with its new target: the T-shirt business

After revolutionizing electronic publishing, essentially enabling anyone who was interested to become a self-published author of e-books, Amazon is turning its attention to another business – T-shirts. With its new Merch program, Amazon allows anyone to get into the T-shirt business, with custom designs, logos, photos, or anything else – and it’s using digital apparel printing technology from Israel’s Kornit Digital to do it.

Last week, Rosh Ha’ayin-based Kornit announced that its flagship high-productivity system, the Avalanche 1000, was chosen for the on-demand production of promotional textiles as part of Amazon’s recently announced Merch program.

“State-of-the-art mass customization means benefiting from the economies of scale while providing a customized, high-quality product to every single customer,” said Sarel Ashkenazy, Kornit’s executive vice president of sales. “Kornit has a reputation and solid expertise in this field, based on its vast worldwide installed base.”

Whatever one thinks of it, Amazon’s Kindle has irreversibly changed the book industry. Before, authors had to peddle their books to publishers, who decided whether or not they were print-worthy. The publishers set the terms, and authors would often have to go out on the road to promote their book. If the book sold, great – and if it didn’t, it would end up in the remainder pile, with consequent damage to the author’s financial standing (they might not get the full amount promised in the contract) or reputation (too many flops, and the publishers would stop calling).

The alternative, of course, was self (vanity) publishing, in which an author would pay a publisher to print their book. Authors would have to promote their books themselves, and if the books didn’t sell, they were stuck with a garage-full – if not a warehouse-full – of books that nobody wanted.

Although it has plenty of critics – mostly about what some authors consider to be poor payment terms for authors – there’s no question that e-publishing, which Amazon pioneered and still dominates, has changed the face of publishing. Amazon e-books are mostly self-published (except for electronic versions of traditional print books released by publishers) by their authors, who do their own online marketing.

There’s no investment in printing, materials, etc.; when someone orders an e-book on Amazon (usually downloaded to a Kindle device), the author gets paid, while Amazon gets its cut. The Internet is full of Amazon self-publishing success stories, with some previously unknown authors reporting that they rake in thousands of dollars a month selling electronic versions of books that don’t require them (or a publisher) to invest huge amounts in printing, promotional materials, and other marketing materials.

Now, Amazon wants to bring that self-publishing platform to T-shirt design. The world, of course, is awash in T-shirts; ranging from a couple of dollars for a plain white (or other color) T to hundreds of dollars for a designer shirt, the number of t-shirts sold worldwide each year numbers in the billions, marketing experts believe.

With its Merch program, Amazon hopes to do for T-shirts what it did for e-books – get a lot of people to design custom shirts, and print, sell, and ship them, either directly to the designer or in its own on-line T-shirt store. Merch, according to Amazon, “is a new self-service program designed to help you increase revenue through the sale of branded T-shirts designed by customers and produced, sold and shipped by Amazon.”

Of course, there are hundreds of thousands of apparel factories around the world where an entrepreneur can get T-shirts printed up – but Amazon has something quite different in mind. Instead of mass-produced shirts, Merch will allow shirt sellers to design unique shirts, even personalized ones – printing them out in small batches, or even one at a time.

Thus, someone who wants to sell T-shirts to the local Little League can easily upload the team’s logo, and have Amazon print out a shirt with each player’s number, name – even photo, if that’s what they want. The size is always perfect, because the shirt is ordered individually, not in bulk (with screen printing, the traditional way of printing, buyers have to purchase by the dozen for sizes, colors etc.). And to make sure the team likes what it has ordered, the seller can order just one shirt as a sample, showing team members exactly what they are going to be wearing.

To pull this off, Amazon has turned to Kornit, one of the world’s biggest producers of DTG – direct to garment – printing systems. Established in 2003, Kornit was the first company to apply the principles and methods of digital inkjet printing to garment production, and is today the world’s biggest seller of DTG printing systems. With the Kornit systems, Amazon plans to digitally print shirts as orders come in, dispensing with the long-drawn out screen printing process (requiring transfers, stickers, and other messy features). With the Kornit system, an Amazon employee simply presses print, waits for the T-shirt(s) to emerge from the system, packs them up and sends them down to shipping. Kornit will also make service personnel available to Amazon at its facility in Texas, where the Merch fulfillment center will be, in order to ensure that everything goes smoothly, the company said.

Kornit went public in 2014. According to analysts at the Seeking Alpha financial news site, “Kornit is a pioneer in its particular niche within the textile industry, and it doesn’t have any outright competitors at the moment since it is catering to small-run designers and is not targeting large, mass-market, textile companies.”

It should be noted that Amazon did not invent this business; other T-shirt printing sites, such as Teespring, have been operating for the past several years. According to Teespring, at least 20 people in the US using its custom-print production system are earning over one million dollars a year from their shirt sales (the company itself produced about nine million T-shirts in 2015, making it the single largest shirt producer in the US). It’s this business Amazon is targeting, according to analysts – and with Kornit’s technology, Amazon hopes to get a technological advantage over the competition, said the Israeli company.

Thus, the deal is a huge one for Kornit – and the company couldn’t be happer, said Ashkenazy. “Amazon has been a leader in e-commerce for decades,” she added, “and we are honored to be chosen as a technology partner for Merch by Amazon.”