Merch Smarter – Unraveling 5 Common Mistakes Artists Make With Their Merch Business

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Managing your band's merch sales[This article was written by Vanessa Ferrer of InFocus Artist Management and Merch Cat.]

There are two ways that musicians have always made money. One is by performing and the other is by selling merchandise (“merch”).

With the continued decline in music sales (except vinyl), and the increasing popularity of music consumption through streaming platforms like Spotify, artists are yet again forced to lean more heavily on other income sources in order to make a living doing what they love.

Touring and live shows continue to be a primary revenue stream for artists, and most artists sell 85% or more of their merch directly at live shows at the merch table.[1] With that, merch can be a lucrative source of income to artists if they play it right. While many artists know that selling merch is a good way to keep the hypothetical lights on in their business of being an artist, we’re still seeing some common mistakes being made out there across all levels. Let’s zone in on 5 of these and see if we might make more sense of this merch madness.

1. Not having a merch business

See above!

In order to win at the merch game, you need to be in it. Artists are under the misconception that there is a high cost barrier to entry for having a merch business, but the reality is that you can, and should, start small.

There are multiple merch vendors out there who have low minimums with good price points and cater to the independent artist. Start small, see what works and build it out from there. Keep designs simple to start – this will help keep costs low. A one-location, one-color item for a first run will suffice to get you started. Yes, you will have to do the leg-work of ordering, choosing styles and sizing, and actually selling the merch, but the reward is that you get to keep 100% of the profit.

If you buy 50 shirts for $250 ($5 each) and sell them for $15, you’ve made $10 per shirt. Multiply that by your 50 shirts and your profit is $500. Yep – an additional $500 in your pocket to fuel the van, feed your belly, buy more beer, or reinvest to buy more merch and grow your business.

Your fans WANT to buy things from you to help support you, so give them the opportunity to do so. Merch is not just a way to make cash, but it’s also a great marketing tool. Let your fans be your brand ambassadors and spread your music message by wearing your latest merch.

2. Not accepting debit/credit cards for payment

Crazy, but true, many artists still do not accept debit/credit cards. I was recently on the merch line at the show of a successful veteran artist who shall remain nameless. The people in front of me asked the merch person if they took cards, the merch person said “no” and the people walked off of the line. Maybe they went to ATM machine to get cash and come back, but I’m guessing that sale was lost. Today’s world is all about convenience, and unless that fan REALLY REALLY wants that merch item enough to go find cash and get back on line, that pivotal moment is gone.

Not accepting the form of payment that a fan is most likely to have in their wallet – i.e. plastic, will result in sales lost. In today’s day and age with the multiple payment services out there that will give you a swiper for free, there is really no excuse for leaving this kind of money on the table, unless you just don’t need it.

I often hear complaints about the transaction fees for cards, but let’s do the math. At an average transaction fee of 2.75%, the benefit of being able to make the sale, outweighs this small cost. Don’t lose a 20 dollar sale to save 60 cents.

3. Not keeping track of what is being sold

Okay so now you have merch to sell, you’re taking cards for payment and your merch business is starting to rock. How are you keeping track of what you’re selling? Are you using a tally sheet? Excel spreadsheet? Not keeping track at all? Do you know if you’re making a profit? How many shirts did you give away at your last show? What inventory did you sell? What inventory is left after a tour or show?

If you’re not keeping track of what you’re selling, it will be near impossible to understand what’s going on in your merch business. If you don’t know what’s going on in your merch business, it will be hard to make future decisions to ensure that it is working for you in the best possible way.

4. Not knowing when inventory is low and it’s time to re-order

That moment when 5 of your biggest fans rush to the merch table and all want a size small and all you have left are larges. Depending on the fan, this may or may not result in lost sales, but wouldn’t guaranteed sales be better?

Timing is everything, and time is money, so the better handle you have on what inventory you are out of, along with allowing enough lead time to re-order so you’re not paying more for expedited shipping, the better position you will be in to capture that fan in the moment and make as much profit as you can on that sale. Fan engagement is a key driver of an artist’s business today, so you want to be able to capitalize on that to every extent possible.

5. Not taking note of fan behavior at shows/venues

No, I don’t mean taking note that fans try to jump on stage when you play a show at Mercury Lounge in NYC, but when you play at Smith’s Olde Bar in Atlanta, they beckon you to crowd surf. While there might be value to knowing this, I’m talking about taking note of what your fans are buying at what shows – styles, sizes, and quantities.

What sells big in the Southeast may be different from your bestsellers in the Northeast, both in styles and sizes. Maybe you kill it in Merch at venues in primary cities, but when you travel to less mainstream destinations not so much. Or maybe it’s vice versa.

There is not an exact science to this, but chances are that if you start keeping track of these things, and listen to what the data is telling you, the next time you have shows in these places, you will be better prepared. You can also measure venues against one another to figure out why you had a killer merch night at one, but not another. Maybe your price point was too high and next time you can try lowering it a bit, or maybe the location of the merch booth didn’t have the right visibility, so next time you work a little harder to make it known that you’re selling merch. Paying attention to these metrics will also help minimize waste. If you know what people are NOT buying, you will not re-order those items and sizes on the next go around.

Now I know you’re thinking this all sounds like a whole lotta work. How am I supposed to do this while traveling, writing, recording and doing whatever else artists do? Enter Merch Cat, a one-stop app and web solution that was created for artists like you to help you have a better merch business. You can sell your merch, keep track of inventory and get real time analytics, all from your iOS device at the artist friendly price of $7.99/month.

For CD Baby’s DIY Musician Blog readers, Merch Cat is offering a 60-day free trial to give it a shot. Simply go to http://www.merchcat.com/promo, enter the code CDBABY and you’re ready to go (offer expires on 12/31/16).

With the grunt work taken care of, the rest is on you! Get out there and slay your merch business today!

[1] Hypebot.com “Modernizing The Merchandise Madness”

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