Music Think Tank

These days, merchandise sales make up a pretty big portion of most touring acts’ income. The staples of CD’s, shirts, and stickers have become even more important as income from performing has gradually dropped. There are many tips out there of what bands should order and how they should sell their products, but there doesn’t seem to be much on how to get the best possible pricing from vendors, how to calculate prices, or how much product should be ordered before a tour.

What You Should Order and Who You Should Order From

The standard band mix of products should include:

Music - CD’s are generally the best option for most artists because fans like having something tangible that they can take home (as opposed to a digital download) and take up less room than vinyl. They also have higher profit margins. Companies that I recommend for replication: Cravedog and Discmakers.
T-Shirts - The basic tee usually is a solid product to go with. You can usually get a better price and a more comfy product if you choose a lighter shirt, such as a Gildan 5.3 or 5.6 oz. More on how to get better prices below. These are some decent companies.
Stickers - Stickers are cheap, easy to produce, and can be used for promotion or selling. I order all of mine through Stickerguy.
Buttons - These are another easy, cheap product that you can sell for $1 each. I recommend the quality, pricing, and service from Busy Beaver Buttons. Or, if you have some upfront money, invest in a button maker. Badge-a-Mint makes a good one.
Posters - These are a staple. Most companies should give you a 12x18 poster for the same price as 11x17. I recommend Printing Conexions (let them know that Simon Tam sent you).

There are many other options out there and I do recommend that you explore custom merchandise, but it’s important to balance the “cool” factor of having variety with what actually sells and what you can make money on. These are other common products:

Bracelets - If you like the silicone styled bracelets, try 24 Hour Wristbands. They have some of the best prices and you can even get each one custom wrapped.
Shot glasses - I highly recommend Discount Mugs.
Beanie/hats - Use Curly and Spike; great pricing and quality, especially on these products.
Dog tags - I get mine through Oriental Trading Co. because you can order in lower quantities, which is great for a product that doesn’t sell as quickly. You can get ball chain necklaces on Amazon.
Other - If you want something really special, you’ll want to get someone who specializes in custom work. My absolute favorite company for that is Let it Ride Design. The company was started by a touring musician and they understand band needs. They also have some of the best quality prints I’ve ever seen.

How to Get Better Pricing for Band Merchandise

Here are some tips on how to get better prices for your merchandise:

Shop Around - Take your time to compare pricing from companies. Consider quality, minimum amounts ordered, payment plans, and additional costs that might not reflect the quote (screen charges, shipping, etc.). The internet is great for this!
Ask For a Better price - Most companies want your business and can work with you on your budget. If you find a better price elsewhere, they’ll often meet it or throw in some incentives (free design work, waive screen charges, etc.).
Ask About Leftover Stock - Many companies order large quantities of product to get a lower price but will have an assortment of odd sizes or colors at the end. Sometimes, you can get a great deal by asking for clearance stock that can take the same design. You can pass the savings onto your fans.
Begin a Partnership - I worked with a local vendor to get exceptional pricing and price terms by committing to a long-term partnership. I agreed to always consider them first when pricing options out and to order a certain amount of business. In return, I get the best pricing around and also 45 day net terms - In other words, payment for the products aren’t due until 45 days after I pick them up. It’s perfect when I need start up cash and merch for a tour because I can pay when we get back. You can also pitch a potential sponsorship deal.
Order in bulk - Most of the time, you really start saving money on shirts when you order at least 48 of them at a time.With stickers, it’s 250. With buttons, it’s 100. If you want to balance price per item and minimum quantities, talk to a representative about what optimal quantities are.
Order less designs - If you reduce the number of different designs, you can order higher quantities of each product. This in turn drives down the price per unit. Variety is good but often gives you a much higher start up cost.

How Much You Should Sell Your Merch For

There are a few different camps on this one. Some people believe that you should offer your products up for a suggested donation; others believe in having set prices. How much do you want to make off of your merchandise? Is it more important for you to have more cash in hand or products in the hands of your fans?

If you want to run your band like a business, then you’ll want to calculate things like ROI (return on investment), profit margin, turnover (how quickly the product sells), and keep track of your inventory. Translating that to the band world would look like this:

Return on Investment (ROI) - This is how much would you make if you sold all of that product at your asking price subtracted by the total cost for ordering that merchandise.For example, if you ordered 100 shirts for $500 and sold them for $20 each, your return on investment would be $1500.
Profit Margin - This is a percentage of how much you make per item. If a shirt cost you $5 and you sell it for $20, that’s a profit margin of 75%. Every business has a mix of products that bring in different profit margins. The more items that you have with high profit margins, the more money you’ll make (and the less upfront costs you’ll incur). I recommend selling products in the 40-60% range.
Turnover/Turns - This shows how fast you “turnover” your inventory, For example, if you ordered 100 shirts at a time and sold 500 in one year, that would be a turnover of 5. The higher the number, the better. If you sit on some products for a very long time, that means that aren’t making back the money it cost to make them in the first place.
Inventory - Before ordering merch, know how much you have. It’s important to break things down by size/color as well so you know which items move more quickly. Sometimes, inventory can be hard to track while on tour so it’s recommended that you keep a running total on paper (or through a program like Square Register).

Tip: you should have something in your inter-band agreement about merchandise policies: who pays the upfront money, how people get paid back, who is able to take/give away merch, and what terms are involved with that. Some band members sell merchandise to family and friends, others give it away. It’s best to have upfront conversations about how much merch can be used for promo or charitable reasons. If you decide to give away or discount a certain amount, that should be factored into your cost as well.

This is how much I typically sell merchandise for at shows:

CD - $12

Shirt - $15-20 (depending on design/type)

Hoodie - $45

Poster - $3

Sticker or Button - $1

Necklace - $5

Cell phone charm/Earrings - $3

Bracelet - $3

Water bottle - $8

Shot glass - $5

Lighter - $10

Another tip: Offer combination packages, it gives a better value to fans and helps you sell more. For example, we’ll often sell a cd, shirt, poster, bracelet, sticker, and button for $25-30.

How to Sell More Merchandise

Focus on Quality and Design - If you want to sell more, you have to give fans something worth owning.
Get a Better Display - Your merch setup should should be easy to see, organized, clean, and in a prominent location. Learn how to fold a shirt properly. Invest in a decent display. A good display goes a very, very long way.
Accept Credit Cards - Got a smartphone or iPad? Download Square.
Man the Table - Having the band members at the table makes a huge difference, especially if they have friends coming out to see the show who want to talk.. Make the merch area the place to hang out.
Offer an Incentive - You can give out low-cost items (sticker, poster, button) for a higher-ticket item like a shirt or CD.
Announce it - When you’re playing, let people know you have merch and where they can find you.
Promote it Ahead of Time - You can build up excitement about new merch by talking about it in your e-newsletter or social media sites. Get fans involved: ask for design ideas, favorite designs, requested types of merch, etc.
Out With the Old - Give special pricing to older designs that you’re trying to get rid of. I use price tags that call out the special.

Supplies Every Merch Bin Should Have

In addition to the obvious (merchandise), your merch bin should have the following:

A banner
Portable lights (battery powered and stronger ones with a long extension cord)
A locking cash box with change
Binder clips and hangers for the shirts
A roll of painter’s tape, duct tape, and clear tap
Markers and pens
Display equipment (folding shelves, CD display, etc.)
Blank sheets of paper
Price tags or sign
Mailing list signup
Extra Square card readers
Scissors, pliers, and a basic tool set
Table Cloth
A set of bed sheets (to cover the table when you are away)
Hand sanitizer (let’s face it, some venues are gross)

Less Common Items Bands Should Own

Here’s a list of helpful items you should eventually get:

Laminator - You can create tour ID placards for your road crew, price tags, price sheets, QR code display with an email list sign-up or Facebook page, etc. They’re cheap, easy to use, and very handy.
Button maker - You can often find these on eBay.
Silk Screen Press - handy for limited runs of custom merchandise
Rolling Tool chest - Our band loves things with wheels, especially things that stack. It makes load out much faster. I use this Stanley rolling tool chest to hold all of our merchandise. It also sometimes doubles as a stage riser or merch table.
Projector - You can make a dramatic merch display in a dark venue.

More than anything else, make sure that your approach to merchandise is thoughtful, makes sense for your music, and makes sense for your budget. It’s definitely worth investing into but it should be done the right way!

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Simon Tam is the President and Founder of Last Stop Booking, author of How to Get Sponsorships and Endorsements, and performs in dance rock band The Slants. Simon’s writing on music and marketing can be found at www.laststopbooking.com. He is on Twitter @SimonTheTam