Every day is Christmas at the merch table.
This isn't a terribly complicated process by any means, but it will require a bit of math. Hold up. Before you go running the other way, just prepare a calculator. If you don't own one, there should be one in your computer's program menu. There. There you go. Now we're all set.
I suppose this isn't a terribly good time to tell you that you don't really need a calculator for this. The point I'm trying to make is that (okay, fine, there was no point) you should put some thought into your merch prices, especially if you want to be shrewd and make more money. We all like to make a bit of pocket-dough, right? So it serves to reason that you should be smart about this.
It's like that time I almost took a cab ride in New York. I found out that the place I was trying to get to was only five blocks away, so I decided to go on foot instead. In the freezing cold. I really stuck it to the man that day!
So let's get into it. Here are some factors to think about as you seek to exploit the masses set competitive but profitable swag prices.
Understand Production Costs
Okay, so getting your merch done up probably cost you something (unless someone did you a solid). Do you still remember those figures, or is it too much to expect that you would be that organized? Fine, I'll wait... Go and find your invoices.
Okay, now that you know what your merch orders cost you, your ultimate mission is to make more money than you spent. It sounds pretty simple, right (were you expecting algebra)? There's a little something called the break-even point, and it is pure magic when you know how it works. This is where a little bit of math comes in.
Let's say you bought 50 T-shirts at $10 each. So that would mean you spent $500 on the shirts, right (have I lost you yet)? If you sold them at $15 each, you would ultimately make $750, which would mean $250 profit. How many would you need to sell to make $500? Well, the math gets a little funny at that point, because you would need to sell 33.3 repeating shirts to make back your $500 (500/15). Basically, if you sold 34 shirts, you would cross the break-even point at $500.
By the way, don't listen to the people who say things like "it's so shady to charge more than the cost of the product". Those same people buy, sell and trade products that are marked up every single day. There is always a difference between wholesale and retail price. Businesses wouldn't survive if they couldn't post a profit. "But it's such a rip-off." Oh, shut up!
Ahem. Sorry. I get a little passionate about this. Let's move on to the next point.
Determine Your Margin
Here's the part that some artists dread. You need to mark up your products so you can actually make a profit on them (it will allow you to calculate your break-even point too). Moreover, if you ever want to give that big-boobed girl a special price or you want to throw a few items out at the crowd during your show or you just want to put certain items on sale for a while, you're going to need a little bit of "margin" to work with so you don't end up losing money.
Yes, I know, it all sounds very technical. Most of the time it's just a matter of charging a few dollars more than you spent on any particular product (on small-ticket items it will be more like few quarters). Give yourself a bit of breathing room so you can still do sales and promotions from time to time.
Price Your Goods Competitively
If you aren't actively stealing good ideas from other bands, man, it's time you got on that. Do you think a band that has toured extensively for a decade might have a clue about what they're doing? No, no way.
So if you're independent, you might not be able to charge as much as the big shots and get away with it. But consider this: $15 to $40 per T-shirt isn't completely unusual, and yeah, people still buy that stuff. Since people buy some rare shirts on eBay for like $1,000 or more, it shouldn't be too much of a stretch to sell one of yours for 30 to 40 smackers. Just because you're small-time now doesn't mean you can't make a few bucks.
If you're not particularly decisive or you're just trying to figure out a good price point for something, feel free to make up your damn mind already experiment. You could even set up a few "pay what you want" promotions and see what your fans think your goods are worth. Promotions of this nature probably won't hurt you over the long term.
Try selling bundles too. Take a couple of dollars off the top so people will think it's a good deal (you should still make a profit). If you have anything that's not selling particularly well, you can always throw it in with the bundles to start getting rid of inventory.
Any other thoughts on the subject? Well, we're in the web 2.0 age now, and I hear there's a little something called comments you can leave. Make sure to submit one before you go.
Cover image by michaelz1