Redbubble: Product Categories, Supplier Relationships, & Growth Opportunities | In Practise

We're gifting a 2-YEAR FREE SUBSCRIPTION to one user who completes this two-minute survey

Redbubble: Product Categories, Supplier Relationships, & Growth Opportunities

Former General Product Manager at Redbubble

Redbubble

Why is this company interesting?

Redbubble is an Australian-listed three-sided marketplace connecting individual artists, fulfilment partners, and customers. Artists upload unique designs and Redbubble partners with fulfillers to produce 'print-on-demand' (POD) products and ship to consumers.

Redbubble's competitive advantage lies in the 60m long tail of unique designs that drive organic traffic via SEO to customers looking for customised products. The flywheel starts with artists uploading designs, this unique content driving organic traffic which drives sales through the fulfilment network. As the fulfilment network scales, delivery time and cost declines which drives sales and the flywheel again.

Redbubble reminds us of Etsy in 2016; a marketplace with a unique and sticky supply side and a new CEO to focus the company on driving sales for sellers. RBL's 5-year revenue CAGR is +35% with gross margins over 40% and an estimated ~15% long term EBIT margins.

Print

Executive Bio

Former General Product Manager at Redbubble

The executive has over 4.5 years of experience working at Redbubble when the company was private and the first few years of being public. The executive led a team of category managers and worked closely with suppliers and fulfillers to launch new POD products.Read more

View Profile Page

Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

The company does not say much about the supply chain, so I would like to get a broad understanding of the supplier/customer relationship. Could we start with your background? What have you been up to and what is your relationship with Redbubble?

I currently work as a freelance consultant and I support startups with developing their product strategies for their future growth plans. At Redbubble, I first worked as their head of product helping to build their product portfolio. When I arrived, they were still a privately owned company, turning over $60 million a year, and the product portfolio was limited to artwork and some t-shirts. My initial role was to review the opportunities outside of those and identify what else might be possible for print-on-demand.

I spent a lot of time searching the world for the best suppliers, the kind of people we wanted to work with, and the kind of products our customers and artists wanted. We went through IPO and my role evolved so I ended up also looking after the shop environment in regards to the visual merchandising of products, how the product looked and felt and how easy it was to shop. I was responsible for ensuring customers knew what they were buying and how it would look on their body.

The current lineup of products has even extended into puzzles; is there anything missing from the product portfolio?

They have probably only executed a third of the list of opportunities created while I was there. There is still a heap of opportunities in different categories. We have not touched the sports category yet, where there are many opportunities because both sports and digital printing has to happen on man-made materials. The other opportunity is the pet category, which I am sure one day they will get to. So yes, there are still many things Redbubble could do to maximize on the print-on-demand opportunity.

If Redbubble were to add pet products, would they approach their current partners to print on established machines and simply source the blanks?

It depends on the product category. If it is one in which we already have capacity, we will ask our existing suppliers to produce that. For example, if it was something printed on melamine, we have that ability because they currently print phone cases on that material. The majority of our fulfillers can also create products on fabric and cut and sew products. There is some capability within our existing suppliers but they would also extend their ability if you gave them an opportunity and told them about the revenue and the size of the prize. That was always exciting for suppliers and you could usually convince them to extend their capabilities and add to their machinery base.

There were also other opportunities which people simply refused to touch, and you needed a specialist for those. We would then source from US, European or Australian suppliers of a new product category. We would perform research to identify whether that was an opportunity and was not already being produced.

Are suppliers contractually obligated when launching new products?

It is very normal in this kind of environment to ask for 12 months of exclusivity, otherwise Society6 could launch a product a month after you did. Contractually, there were no other restrictions we held them to.

Are there broader agreements in terms of the price of blanks?

There is little agreement with regards to that. Prices never fluctuate dramatically, and it is also often based on volumes.

Once you get to the hot season in the fourth quarter, it is very important to get enough volume from suppliers; how does Redbubble ensure they are served first?

Lots of sweet talking; Redbubble had amazing relationships with their suppliers. It is also about the volume throughout the year, so of course suppliers have to measure up. If we had a strong position with a supplier, we were in a much stronger position at Christmas, and if we had a weak position with a supplier, we had a much weaker position at Christmas. It is simply mathematics and basic business management. They would treat us the same as they would everyone else, but usually in a ratio-driven capacity. If we were with them for a long time, they would give us more support.

So there is nothing contractually agreed?

No.

How are the 45 to 50 suppliers distributed regionally, by product and size?

It depends on the volume of customers we have in that region. We have three different suppliers in Texas, South Carolina and California, all supplying the same product. We manage them based on the size of the audience in that area, to minimize shipping times. We may need more manufacturing capability on the West Coast who have more customers, or we may need more people in the East Coast because we know that at Christmas, they buy more product from Redbubble. We understand our audience location and how to distribute sales.

Who is the largest supplier? You manage so many smaller entities, would it not make sense to focus more on those who want to grow and push the hardest?

Sign up to read the full interview and hundreds more.

Investor-Led Interview

Interviews hosted by one of our Premium investor partners are only available in text format.

Did you like this article ?