Selling merchandise, commonly known as merch, can be a lucrative way for businesses, influencers, artists, and more to generate revenue. However, successfully turning a profit on merch sales depends on several key factors.
What is merch?
Merch is shorthand for merchandise – physical goods like apparel, accessories, home goods, and more that feature a person’s or brand’s name, logo, slogan, or designs. The word “merch” emerged in the 1980s and originally referred to band merchandise like t-shirts sold at concerts. Since then, the popularity of merch has exploded thanks to the internet making it easier than ever for brands and influencers to sell goods directly to their fans and followers.
Who sells merch?
Today, many different individuals and companies leverage merch:
- Musicians, bands, and record labels
- YouTubers, influencers, and social media stars
- Athletes and sports teams
- TV shows, movies, and streaming services
- Video game creators and eSports teams
- Comedians and podcasters
- Artists, illustrators, and graphic designers
- Food and beverage brands
- Fashion and beauty brands
Essentially, if a person or business has a recognizable brand identity and an audience of fans or followers, they likely sell merch in some capacity. Selling merch allows brands to generate revenue while simultaneously strengthening their bond with customers.
Why do people and brands sell merch?
There are several key reasons why merch is so popular:
- Monetization – Merch provides a way to monetize fame or influence. For individuals like social media influencers, merch sales may be their primary revenue stream.
- Brand awareness – Merch spreads brand awareness and recognition when worn publicly. It provides a form of free advertising.
- Fan connection – Fans feel more connected to their favorite creators and brands through merch. Wearing a branded shirt or hoodie makes the fan feel like part of the brand’s community.
- Collector’s value – Limited edition and exclusive merch drops allow brands to tap into fans’ desire to collect rare memorabilia.
Additionally, profit margins on merchandise tend to be high. Apparel has markups around 2-3x. When an influencer or brand already has a captive audience eager to rep their gear, merch can have tremendous money-making upside.
How much money can you make selling merch?
Profit margins and revenue potential from merch sales can vary substantially based on factors like your audience size, merch quality, and sales channels. But to illustrate the earning potential:
- YouTuber MrBeast claims to make $1 million per month just from merch sales.
- The K-pop band BTS reportedly generated $170 million from merch sales on their 2019 tour.
- The TV show Stranger Things sold $15 million in merch in 2017 alone.
For influencers and content creators, monthly merch revenue in the mid 5-figures is fairly common. But for massive internet celebrities and global entertainment brands, merch earnings can scale up into the millions.
How much profit margin is there on merch?
Profit margins on merchandise vary based on the product, production costs, and retail pricing. Some typical profit margin percentages include:
| Merchandise Item | Typical Profit Margin |
|---|---|
| T-shirts | 65-80% |
| Hoodies and sweatshirts | 60-75% |
| Hats | 55-70% |
| Posters and prints | 45-60% |
| Phone cases | 60-75% |
| Mugs and water bottles | 50-65% |
These profit margin estimates are based on merch priced in the $15-$60 range. Profit margins tend to decrease with lower priced items like stickers and increase with higher priced items like jackets and bags.
What sells best as merch?
T-shirts are consistently the best selling merch item across the board. T-shirts offer a blank canvas for endless design opportunities, appeal to all genders, and tend to be affordably priced for fans. Other top selling merch items include:
- Hoodies and sweatshirts
- Hats and beanies
- Posters
- Phone cases
- Water bottles and mugs
When it comes to merch, apparel and accessories tend to sell better than home goods and collectibles. Items that can be worn or displayed publicly perform best, as they offer social value for fans.
How do you price merch?
Pricing merch comes down to finding a sweet spot between generating sufficient profit margin and keeping prices affordable for your audience. As a rule of thumb:
- T-shirts: $15 – $30
- Hoodies and sweatshirts: $30 – $60
- Hats: $15 – $25
- Phone cases: $10 – $25
- Posters: $10 – $20
Higher prices are acceptable for limited edition drops and bundles. Also consider production costs – more intricate designs, higher quality garments, and made in the USA production will require higher pricing.
How can you maximize merch sales?
Some tips for maximizing merch revenue:
- Sell across multiple platforms – List merch on your own website, third-party merch platforms, and marketplaces like Amazon and Ebay.
- Promote new releases – Share news of merch drops across your social channels and email list. Create hype around limited edition products.
- Offer bundles and discounts – Bundling multiple items together increases average order value. Occasional sales and promos also boost conversions.
- Collect email addresses – Use merch sales as a way to build your email subscriber list which you can market to again.
- Add more products – Expand your merch catalog over time with more designs, styles, and product types to bring in more revenue.
Merch should be a natural extension of your brand. Align merch designs, products, and promotions with your target audience and existing content strategy to maximize sales potential.
What are the best merch platforms?
Selling merch doesn’t require you to manufacture, stock, and ship items yourself. Third-party merch platforms and marketplaces handle production and fulfillment. Some top merch platforms include:
- Shopify – Build your own online merch store through Shopify. You design and add products while they handle shipping logistics and payments.
- Teespring – Teespring allows you to design and sell tee shirts on demand. No need to pre-order and stock inventory.
- Redbubble – Redbubble is a print-on-demand marketplace. Add your designs and get them printed on t-shirts, posters, phone cases, and more.
- Etsy – Popular for creative entrepreneurs to set up their own shop selling handmade goods, art prints, apparel, and merch.
These platforms provide easy merch tools so you can focus on marketing and selling. They also integrate with sales channels like Instagram and TikTok for wider distribution.
Should you sell merch yourself or use a merch company?
Selling merch yourself allows you to maintain full control and earn bigger profit margins, but requires handling production, inventory, shipping, returns, and more. Using a merch company offloads operations at the expense of lower margins.
For individuals and businesses getting started with merch, partnering with a merch company provides an easy turnkey solution. Once merch sales scale up substantially, transitioning operations in-house makes sense to improve customization and increase profits. Large entertainment brands, athletes, and artists with massive merch demand typically manage merch in-house.
What are the steps to create merch?
The main steps for creating merch include:
- Research and planning – Assess merch demand and identify target audience, pricing, products, and design styles.
- Design creation – Hire a graphic designer or create designs yourself.
- Production – Manufacture and source items through a merch partner or your own production.
- Listing and sales – Add merch products to your online shop and sales channels.
- Marketing and promotion – Market merch through social media, email, influencers, paid ads, and other channels.
- Fulfillment and shipping – Handle order processing, fulfillment, and shipping internally or via platform.
Start small with just a few designs and products to validate demand before scaling up your merch lineup. Use analytics to identify your best selling items and customer demographics to refine the merch strategy.
How often should you release new merch designs?
There is no definitive rule for how frequently to release new merch designs – it depends on your goals and audience. Some guidelines include:
- 1-4 times per year for seasonal drops (e.g. holiday releases)
- Monthly for smaller batches of limited edition drops
- Tie merch releases to events, new content, or campaigns
- Routinely retire and replace underperforming designs
A mix of “evergreen” and limited edition designs is common. Frequent new releases keep fans engaged while building demand and hype. But take care not to oversaturate the market – retain exclusivity of your merch by occasionally restocking popular legacy designs.
Should you do preorder campaigns or always keep merch in stock?
Preorder campaigns help mitigate risk by validating demand upfront before manufacturing a large inventory. This prevents getting stuck holding unsold merch. However, fans increasingly expect their favorite brands to have fast shipping with items continually stocked.
For the best of both worlds, brands use a hybrid approach:
- Preorders for new releases to gauge interest and ensure no overproduction.
- Made-to-order through print-on-demand to fulfill one-off orders.
- Stock of popular evergreen designs for immediate shipping.
As your merch program matures, stock more inventory on core and seasonal items. But use preorders for experimental and limited edition drops where demand is unproven.
Conclusion
Selling merch enables almost any brand – from musicians to YouTubers to food bloggers – to generate revenue from its audience. But launching a profitable merch operation requires carefully validating demand, creating quality designs tailored to your fans’ interests, pricing appropriately, and promoting merch using your existing marketing channels. While merch takes effort to produce and sell successfully, the profit margins make it well worth the investment.
