Make Money with Merch in Four Easy Steps—Tips for Choosing Your Product Without Losing Money

04/07/14 • 14 min

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With digital music sales declining and music streaming robbing artists of yet another income opportunity, one of the few remaining viable revenue sources for indie musicians is a merch table.

I know. It doesn’t sound thrilling, and it carries nothing close to the rush of performing on stage. You’re an artist and performer, not a product pitch person. But, if you want a sustainable music career and not just an expensive hobby, you’ve got to learn to sell merch. It’s harsh, but true.

Think about the musicians you admire, the big artists who have already “made it”. When was the last time you went to their concert and didn’t see merchandise for sale? Never, right? That’s because these major artists understand the importance of selling merchandise. They rely on that extra income. When done correctly, it’s entirely possible that their profit from merch sales far outweighs their cut from ticket sales. If merch sales are so crucial to the success of these big artists, why would you shrink away from adopting the concept for your own career?

You shouldn’t. It’s time to stop making excuses and start making some choices. The longer you procrastinate, the more income you risk losing. Take some time today—now, even—to figure out what merchandise works best for your band and your fans.

Unless you are bringing in big money without merch sales and don’t need any extra, read on.

Choosing Your Merchandise

Let’s start by talking about the merch itself. Selling merch does require an investment, and choosing the wrong items—those that don’t end up selling—can result in money lost. Since your goal is to increase your income, that’s an especially frustrating and disappointing result.

You might be tempted to jump out and make large purchases of product to place on your merch table only to find that you missed the mark. Or, you might be so afraid of winding up with 700 CDs (or stickers, or shirts) left over in your closet that you haven’t ordered anything. Neither is a good place to be.

The following four tips can help remove some of the mystery when ordering merch and, hopefully, prevent you from making mistakes.

Popularity. Some items—your music on CDs or t-shirts with your artwork on them—are obvious choices, but others aren’t so clear. Ask yourself what your fans want to buy. If you’re out of touch with your fans or haven’t been selling merch, it might be difficult to answer this question. You can start by talking to or observing other artists in your genre or area who are already selling merch. What products are they offering, and what are people picking up and buying? Also find out what hasn’t worked.

Once you find a winner, stick with it; don’t tinker too much with perfection. If an item is a loser, dump it. Replace badly performing product with new choices. Don’t allow your merch table look empty and unexciting.

Quantity: how much should you buy to start? Once you’ve decided on a product to offer, how much should you buy up front? While it’s okay to be optimistic and hope for big sales, it is wise to test the market first. This might mean paying a higher per-piece price at first, but that’s better than a low per-piece price on a large order of product that doesn’t sell.

For example: you decide to sell a beer mug with your logo on it and think you can get $8 each on your merch table. If you buy 500 mugs, your cost is $3 per mug, which means your profit would be $5 per mug. Sounds good... if all the mugs sell. Or, you might decide to test the market and buy only 10 mugs, but then your cost jumps to $10 per mug. This means you lose $2 every time you sell a mug for $8. What should you do? Start with 10 mugs. While you do not want to be in the business of losing money, a $100 loss for 10 unsold mugs is nothing compared to a $1,500 loss for 500 unsold mugs.

It might cost a little more up front, but applying this practice to all new merch products will save you big money in the long run.

Price point and margin. These two items work hand in hand. Price point is the amount you charge your fans for the product, and margin is the amount of gross profit you make from the sale. For example: if your t-shirts cost you $7 each, and you sell them for $15 each, then your margin would be $8 each. This represents a reasonable margin of 53%.

Only two things really matter here: how much you have to spend to purchase the merch, and how much income the merch generates. The less you have to spend to generate a large income, the better. Spending ties up money and that money is at risk. Keeping your costs low is important. However, you don’t want to sacrifice quality on product or price things far higher than their actual value. Merchandise that falls apart or looks cheap probably wo...

With digital music sales declining and music streaming robbing artists of yet another income opportunity, one of the few remaining viable revenue sources for indie musicians is a merch table.

Unless you are bringing in big money without merch sales and don’t need any extra, read on.

Choosing Your Merchandise

The following four tips can help remove some of the mystery when ordering merch and, hopefully, prevent you from making mistakes.

It might cost a little more up front, but applying this practice to all new merch products will save you big money in the long run.

Previous Episode

You Need Professional Help

... getting gigs, that is.

There are two ways you can take this—the way your wife says it when she thinks you’ve lost your mind, or the way a well-intentioned friend offers you some career or relationship advice. The truth is, neither way is particularly favorable.

Most people in the music world would assume that this headline (and the subsequent article) is related to using the professional services of a record label or booking agent. It’s not. A record label might be a necessary part of furthering your music career, but that’s not what we’re talking about here.

So what are we saying? Maybe re-phrasing it would help:

You need help from professional friends

Let’s back up a little here.

Early last year, a talented young musician came by our office. She told us what she was doing to make it as a performing musician; she was full of creative ideas (so much so that we had some trouble keeping up), and it was an informative discussion. She plays gigs often, and she’s recorded quite a bit. She has a website, a product manager, music videos, CDs, and merchandise. She has a street team of dedicated fans that help out. She has profiles and content on all the right social networks: YouTube, Twitter, Facebook, MySpace, Instagram, LinkedIn, Google+. She has her music for sale on iTunes, and it is also available on Pandora, Spotify, and Last.fm. And then there’s...well you get the idea.

It didn’t take long to figure out that she has a lot going on. Maybe a little too much.

Part of our discussion covered how she gets gigs. Now, she stays busy, performing three to five times per week (on average), and her music is her only source of income. She knows gigs are important, she makes most of her income from gigging and selling CDs and other products from her merch table. Her challenge was finding venues that worked—meaning, the money was good, she connected with the audience, the venue fit her style and skill level, and the venue was happy with the night. When these gigs turned into regular repeat dates she was able fill out her schedule with rewarding performances. When all these stars aligned, she felt like she’d hit a home run.

Earlier in her career, she had worked with promoters and managers who had booked gigs for her. However, she hated that they monopolized the relationship with the venue, so she made an effort to start networking directly with the venue owners. As she dropped the managers and promoters, she worked her existing venue relationships to keep booking her regular gigs. To this day she still believes this was a good move for her career. She is in complete control of the booking process and it has paid good dividends.

The drawback to this method is that, when her go-to venues were booked up and she needed to connect with new ones, the new venues didn’t know her, and they didn’t know if booking her would work out for them. Remember, she no longer had access to a promoter or agent to introduce her to new venues. These professionals spent many years building a reputation for providing the talented artists that a venue needed to survive. If the manager or promoter vouched for the musician they were putting their reputation on the line. A trust relationship with the venue is very important.

Since she no longer had someone to vouch for her, our artist would quite often spend hours making cold calls trying to book a gig, and nine times out of ten the answer she heard was “no”. This soured our artist with this method of finding gigs. (We can’t really blame her; we have past experience with cold-calls in the business world, and it’s absolutely no fun to hear a dozen or more rejections before someone finally says yes.)

To make things even more challenging—when she got a “yes” it was really a “maybe,” and that was just the beginning. She had to send over a press kit that included a complete workup showcasing her talent. Once she passed this initial review (sometimes it would take weeks to get a response), she might be invited to audition in person—another hurdle. Sometimes she got no response at all. Now her success changed from one-in-ten to one-in-twenty. It wears us out just to think about the process.

With everything this girl had going on—all her talent, all her drive, all her gigs, all her outlets and channels and efforts—she still had trouble with getting by. She knew she needed to find a better way to get gigs, and that she needed better gigs.

Next Episode

Six Ways To Motivate Yourself To Write Songs

Written by: Cliff Goldmacher

As passionate as we are about our songwriting, the reality is that sometimes it’s difficult to motivate ourselves to write. Whether it’s the fear of plumbing our emotional depths or just good old fatigue after a long day, there are often obstacles to overcome when it’s time to write. While flashes of inspiration are great, we can’t always count on the muse showing up on our schedule. Instead, we’ve got to make our own inspiration. I’ve put together a list of a few things that should help you keep your creative fires lit:

Set up a place at home to write

As simple as it sounds, having a place to go where you can focus and be creative can be motivating. Even if it’s just a small desk and chair in a corner of your living room, the fact that you’ve dedicated it to your art will serve as that little push you might need to write. Keep your writing tools—rhyming dictionary, guitar, laptop, etc.—out and easily accessible. It’s amazing what a difference putting your guitar on a stand versus keeping it in a case can make. Make things as easy as you can for yourself, and you’ll be much more likely to dig in.

Set up a time of day to write

Routine can be a good thing, even for something as artistic and creative as songwriting. If, for example, you know that every day at 7pm you’re going to write for half an hour, then you’re more likely to do it. They say it takes a few weeks of consciously making yourself do something before it becomes a habit. A daily time to write will go a long way towards the healthy habit of songwriting.

Keep a file of unfinished songs

One of the hardest things about writing is starting with a blank page. By keeping an organized file of your unfinished lyrics and rough recordings, you won’t have to climb the mountain from the bottom every time you sit down. While sometimes it feels good to start with a fresh idea, don’t forget to check your unfinished ideas from time to time. It’s remarkable how a few days or weeks can add the perspective you need to see a partially finished song in a new light and finish it.

Find a co-writer

Nothing motivates more than accountability. If someone is counting on you to show up and work, you’re more likely to do it. Not only that, but halving the burden can make writing a much more approachable pursuit. This is one of the many benefits of co-writing. Other advantages include having someone whose songwriting gifts compliment your own in such a way that you both get a better song than you would have separately. If you haven’t co-written yet, this is as good a time as any to give it a try. Even if it’s not a perfect experience, we all benefit from observing firsthand someone else’s writing process.

Give yourself an assignment

Sometimes the idea that you can write about anything is just too much freedom. Often, it’s easier to write if you have some guidelines. For example, if you tell yourself you’re going to write a song with one chord you’ve never used or a song about a topic you’ve never covered, you’ll find it’s easier to get to work. Anything you can do to give shape and structure to what you’re attempting to write will make the task that much simpler.

Tell yourself you ’ll only write for five minutes

This is one of my all-time favorites. On days where you’re really struggling to make yourself write, tell yourself you’ll sit down for five minutes. That way, if nothing is happening after five minutes, at least you’ve tried. It’s astonishing how often those days are the days where the breakthroughs happen. Taking the pressure off of yourself may be all that you need to get on a roll. That being said, if it’s just not coming, stop. There’s no point in making yourself miserable. There’s always tomorrow.

Conclusion

Being a songwriter is a gift, but, as with most gifts, some assembly (otherwise known as work) is required. My hope is by suggesting a few ways to lessen the burden of getting started, you’ll be able to write more consistently and enjoy the accompanying results.

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