I had to buy a plain black shirt for my son's 2nd birthday. A friend is covering it with thermal transfer vinyl to match the theme of his party. With three kids, I really didn't want to lug her into the store just for a shirt, so I took a chance. Doesn't look cheap to me. Looks like an old t-shirt to me. In terms of size, my son is a slim guy and wears a shirt for 18-24 months, so I bought him 2 shades. I would say this shirt is true to size. If you want the shirt to last a little longer, or if your child's body type is a bit taller, I would definitely go up a size.
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