Getting the Most Out of Merch: Part 3

As featured in: Performing Songwriter Issue #59, January/February 2002.  Visit performingsongwriter.com to order back issues or subscribe.

By Bill Parsons

Part 1 | 2 | 3

HOW TO MARKET YOUR MERCH TODAY

So far we’ve looked at the financial and promotional contribution merchandising can make to an artist’s overall career plan. We’ve outlined some of the key characteristics of successful merchandise products. And we’ve considered when artists should start thinking about offering merchandise to the public.

In keeping with the news-you-can-use tradition of this column, we will leave you with the following tips on how to effectively create and market your merchandise, culled from the many generous insights of our interviewees.

There is a fine line between successful merchandising and crass marketing. While that line is different for every artist, find yours and don’t cross it. In general, your merchandise should reflect your vibe and your values. For example, Dar Williams does well with a reusable canvas bag she offered in conjunction with her Green World tour. Moreover, although it costs more, she insists on Made in the USA, 100% organic cotton for all of her T-shirts. Her fans would be disappointed if she didn’t, and wearing the shirt allows them to make a statement about their convictions as well as their musical tastes. Jim’s Big Ego has had success with its “Stress” coffee mug-- the perfect delivery device for the neurotic, caffeine-induced lyrics of its cult hit. Finally, Righteous Babe Records deliberately avoids using Ani DiFranco’s image on its merchandise so as to avoid encouraging any kind of cult of personality. Instead, RBR generally uses its label logo or lyrics on its merch--which its audience has demonstrated it prefers.

Before going out on tour, think in advance about where you’ll be going and manufacture your merch accordingly. In other words, tank tops for Tallahassee and sweatshirts for Sioux Falls--not the other way around. Also, the conventional wisdom is to make T-shirts in XL (roughly 50%), L (35%) and XXL (15%) sizes only. Even quality shirts shrink a bit and people tend to like big shirts anyway. Unless you know you have an audience that dictates otherwise, most of my interviewees told me the other sizes just don’t sell enough to make them worthwhile.

Buy quality. While it is true that your net return on merch turns in part on controlling your manufacturing costs, merchandise is no place to be pennywise and pound foolish. The best cost-control policy is to comparison shop quality manufacturers. If you only pay attention to price, you run the risk of selling sub-standard merchandise to your fans, who might then feel let down by their purchase. Always put your best foot forward to the public--merchandise included.

Start in small quantities to keep a lid on costs. If it’s your first time pressing T-shirts, don’t go over a gross (144) on your first order and see how it goes. If you don’t have enough money together for T-shirts, don’t be afraid to make a limited number of post cards, key chains, posters, pens or whatever. As long as you’re not breaking the bank, it’s good to give your fans something else to buy once they own your record.

In fact, even if you have enough money to make T-shirts and other apparel, go ahead and make a limited number of less expensive items anyway. It’s good to have an offering to match every budget.

On the flip side, even if you can afford it, don’t go overboard on the total number of items you offer for sale. The more merch you offer, the closer you walk up to that line of crass commercialism. Besides, many of my interviewees actually reported a phenomenon of decreased sales when you give people more choices than they know what to do with.

Price your merchandise commensurate with your position in the marketplace. If you’re an emerging act, make your merch affordable to give people every reason to buy it. Once you’re more established, you can charge more. In fact, you’ll probably have to--as larger venues sometimes charge hall fees of 20% or more. For what it’s worth, the general guideline for retail pricing is to set the retail price at twice the cost of production--and then adjust it as market conditions dictate, keeping in mind that it’s always easier to revise prices downward than it is to jack them up.

Sell merchandise online as well as at shows. While it is true that the majority of merchandise continues to be sold at performances, an increasing percentage of sales are now occurring online. You can’t be everywhere all the time, and the Internet gives your fans around the country--and the world--the opportunity to purchase merchandise without having to wait for your next show in town. It also goes without saying that every piece of correspondence you send to your mailing list should include at least a website, phone number or mailing address mention of how fans can order merchandise and CDs.

Get credit card enabled. Some artists report doubling their sales with credit card capacity. It seems being able to put the purchase on plastic can often mean the difference between buying that T-shirt or not. One cautionary note, though: Since there are costs associated with setting up and maintaining a credit card account, either be confident you’re going to do enough business to make those costs worthwhile, or check into getting a credit card account cooperatively with other artists or through the increasing number of online vendors offering credit card accounts to their artist customers.

Be innovative in the way you use merchandise. One band solicited T-shirt designs from the public, posted their three favorite submissions online and let website visitors vote for the winner. The contest really energized the band’s fan base and virtually by definition ensured that fans would like the design of the upcoming shirt. Another band included shirts in a premium package it offered to fans who wanted to help finance the band’s next record by paying for it in advance.

Think twice before giving away any of your merchandise to a record label during contract negotiations. Although it’s not standard, some labels ask for a piece of it anyway. Unless they’re also offering to share in the costs of designing, producing or fulfilling orders for your merchandise, you have a right to keep the rights to your merch and all of the revenue that flows from it.

Finally, be sure you or someone you trust keeps track of your merchandise and merchandise sales while you’re on the road. If you don’t, merch has a way of walking away on you--along with the money that got spent on it. Nothing is more frustrating than turning an income gain into an income drain due to carelessness. Also, although it’s tempting, don’t fudge on the states’ sales tax. It’s easier and cheaper to pay it the first time around than it is to get hit with back taxes and penalties if you’re ever caught in arrears.

OK, that’s it. Our best advice on getting the most out of your merchandise. Good luck!

Part 1 | 2 | 3