The Introduction to the Global Orphan Project
At the time that Zack McCarthy first approached us to work with the Global Orphan Project around January of 2016, they were operating two single sewing lines with a maximum production capacity of around 1000 shirts per day. To effectively supply the screen printing market, which consumes shirts in large quantities at a time, we knew that if we offered a product that was well received in the market, we would not be able to keep up with production.
Adapting the Tesla Model
We decided that we should emulate the Tesla model. Tesla will allow customers to put down a deposit for a car long before the car is even in production. In the case of the Model 3, customers deposited somewhere around $3,000 to secure a position in the manufacturing queue. For example, if you were the 200th person to make a deposit for the vehicle, the 200th car that rolled off the production line would be yours. We adjusted this system to work for us.
Allmade Early Access
During the Indiegogo campaign, that we kicked off in January 2017, we gave interested parties the option to sign up for Early Access. Early on, the program was contributing to the initial productions runs and the sourcing of materials. About 65 people signed up for early access during the campaign.
At this point in time, you contribute to ongoing sourcing of materials and the conversion of those materials into finished goods. The idea behind doing it this way is that we can throttle the number of customers that are depleting inventory and the number of shirts that are being consumed so that we will always have sufficient inventory to accommodate most larger orders. Since the campaign, another 120 or so people have signed up for Early Access. We currently have about 185 customers that have indicated an interest and buying Allmade shirts and have put down money to be able to secure their position in the manufacturing queue.
We received the first container of shirts in August of 2017. A container can hold approximately 74,000 shirts. That initial container was filled with a minimum amount of every color size and style that we offer. Three styles, six colors, and six sizes, which equates to approximately 685 shirts per variation. This quantity wasn't even enough to sufficiently supply our initial ten founders. It took at least three more shipments, which took until November 2017 to produce, before we had sufficient inventory to continuously supply the needs of those ten founders.
Had we immediately allowed everyone to buy shirts wholesale, It would be unlikely that anyone would have been able to buy a sufficient amount of shirts to even fulfill a single one of your customers. We would have been short in sizes you needed. We would have been short in the colors you needed. We would have been short in the styles that you were looking for. We would have immediately experience stock-outages that would have taken another month or longer to replenish. None of you would have had a positive experience.
Instead, during the initial months, only the ten customers that were the very first to sign up to be part of this initiative had the ability to purchase shirts wholesale. Even for them, the initial few months proved to be a bumpy road. We had to pass on a significant amount orders because we didn't have sufficient quantities of the right product.
Since then a couple of things have happened.
- Production capacity has exponentially expanded. LIFE is now able to produce more than 6,000 shirts per day. At that rate of production, we can fill a container in a matter of weeks so we have had much more consistent and frequent shipments of products coming back to the United States.
- We have changed our business model. The initial model assumes we have to turn inventory 6 times per year. We have since learned that that is unrealistic in the wholesale market and even more specifically for where we are in the lifecycle of our brand. As a consequence, we have reduced that assumption to only two times per year. Practically, what this means is that we will be sitting on significantly greater quantities of inventory at our warehouse in Kansas City. This ensures that no matter the size of your order there is a far greater chance that we will be able to accommodate it with garments that are currently stock and available.
- At this point, we have received 5 full containers of garments and have built up an inventory of approximately 250,000 shirts. On the other side of the equation, we have also given about 40 or 50 more customers access to inventory at wholesale prices so there are a lot more print shops that are starting to eat into that inventory.
Going forward, we will continue to add additional customers to the pool of customers that can buy shirts at wholesale. We will do that based on how the level of inventory and our ability to maintain that inventory evolves. When we see that inventory is depleting faster than we are able to resupply, we will slow the rate at which we add customers to the, what we call, active pool. When we see that inventory is building up faster than our active customers are able to consume, we will accelerate the rate at which we add incremental customers. This, of course, is very fluid and it's hard to monitor real time, so we have established a minimum and maximum inventory volume and consumption rate that we use to gauge where we stand at any given time.
We are currently in a situation where inventory is building faster then it's going out but we recognize that this is the slowest part of the year for all of you and even though we have added a fair number of additional customers, we are concerned that if we add too many we will see a rapid swing into the other direction once the print season kicks into high gear.
About 2 customers sign up for Early Access every day. In total, out of the hundred and eighty-five people that have signed up for Early Access, 65 now have access to wholesale inventory. We suspect that we will continue to add about 20 customers to the active pool every month for the next few months which means that if you sign up now, you will have access by July or August. This may accelerate if production continues to accelerate and inventory continues to grow.
Sign up for Early Access
By the end of this year we will have produced 2 million shirts and at that time we will have an inventory of about 750,000 shirts or more. We will continue this program of Early Access through 2018 and possibly well into 2019. If you have any interest in Allmade shirts, we highly recommend that you sign up now. The deposit is $360. This will be held as a deposit to be applied towards future purchases once access is available. If you have any questions, please feel free to contact us at email@example.com