Your merch doesn’t have to suck

The Good Old Days

First, know this: I’m a t-shirt snob. 

That’s relevant because t-shirts are by far the most popular Creator merch (I don’t have data to back that up, only my lived experience - take my word for it).

Back in college, I used to read t-shirt blogs for fun, and I’d collect shirts with cool designs the same way some people collect sneakers. 

At the time, websites like Threadless and Design by Humans allowed an avant garde group of emerging Creators to produce and sell wearable art. Indie t-shirt companies owned by many of those Creators begged tastemaker blogs for reviews so hipster-punk college kids like me could discover new designs that would entice people to talk to us at parties. 

It was paradise.

But beyond the art, there was also practicality. We all judged t-shirts not just on the design, but also on the quality. We wanted shirts that were soft, comfortable, and would last - and the whole ecosystem supported that because the incentives supported that.

What incentives, you might ask?

Well, back then, if someone wanted to sell t-shirts, they had to take a big financial risk by buying and holding inventory. 

There was no on-demand printing or dropshipping. You predicted how many of each size you’d need, bought the shirts, held them in a warehouse space you paid for, and tried to sell them all before you made the next purchase.

The incentive for making high-quality products was risk-mitigation. If you didn’t sell all the inventory you paid for, you lost money. Period.

T-shirts aren’t high-fashion, they’re comfortwear. You’d be more likely to sell your inventory if the blogs and your customers talked about how good the shirts felt to wear alongside how cool the designs were.

Early in my career, I managed merch campaigns like this for artists like Borgore and Paul van Dyk. It was a tremendous amount of work - and stress - trying to figure out how much inventory of each shirt size to hold and what to do if it didn’t sell out.

Then print-on-demand (POD) merch companies arrived, made my professional life immeasurably easier, and ruined merch for a decade.

The Downfall

POD companies promised a new, risk-free way for artists and Creators to sell merch.

When I was at WME, we invested in one of these companies and ran 6- and 7-figure merch campaigns for clients like Rhonda Rousey and Neil deGrasse Tyson without any operational effort at all. It was amazing, and lucrative!

For me, after spending my early career managing high-touch artist merch campaigns this new paradigm felt like heaven.

As a merch fan, though, it turned out to be hell.

The way these companies made their profit put downward pressure on product quality. Here’s what a typical waterfall might look like:

A POD company would tell Creators they could sell a t-shirt for however much they wanted to, and keep the difference between the price of each t-shirt and the selling price. Nice and Creator-first, right?

Well, sort of. The price sheet would have multiple quality levels, with different pricing, but those prices weren’t just the t-shirt wholesale - they included the POD company’s markup as well. 

In 2015, Hanes and Gildan were $2-$4 per blank, while the much softer, nicer American Apparel (RIP - it went bankrupt and was acquired by Gildan) was $5-$9 per blank. A POD company would then list them at $6-$8 per shirt for the lower-end and $9-$14 per shirt on the higher end.

Creators wanted to make their tees accessible to their audiences, so they might charge $20 per shirt (remember when t-shirts were only $20???)

Which quality option do you think most Creators generally chose more often - the one with a $6 margin or the one with a $12 margin?

At the end of the day, no one had incentive to pick the most expensive, highest-quality options - everyone wanted the best margins, and there was no inventory risk putting pressure on sales. 

I have a hypothesis that this is what actually killed American Apparel (this, and the founder being scum - but replacing him didn’t ultimately help the company). They stood at the pinnacle of blank t-shirt quality, but were too expensive for the print-on-demand era.

Now, it feels like everything is printed on the much-less-nice Hanes and Gildan.

Since the print-on-demand merch companies arrived, the quantity of merch on the market has exploded - literally millions of Creators have shirts, tote bags, and other stuff on sale - but the quality has tanked. 

If you buy a print-on-demand shirt today, you’re basically wearing washed cardboard. 

There’s hope though.

A New Hope

I’m increasingly seeing innovative, artist-minded Creators partnering with boutique companies to produce limited-run, ultra-high-quality products. These are priced higher than an equivalent on-demand version might be, but the quality is an order of magnitude better.

There’s a win-win-win in this strategy:

• Creators win because they get to sell a wider variety of bespoke, high-craft products 

• Small businesses win because they get the benefit of built-in marketing from their Creator partners.

• Audiences win because they can acquire products that match their expectations of their favorite Creators’ quality.

But how is this possible? These small businesses don’t have the risk appetites to front the cash needed to buy and hold inventory, and custom, high-quality products can’t be printed on demand.

The answer is customer pre-orders - a euphemism for crowdfunding.

Crowdfunding is the happy medium between the high-risk “make it and pray” model and the low-quality print-on-demand model.

If you have an idea for a unique product and can find a boutique company to help design and produce it, you can then mitigate your risk by putting it on sale BEFORE you actually make it. 

Set a unit or dollar pre-order goal that covers the cost of your effort, manufacturing setup, and initial inventory, then run a crowdfunding campaign on platforms like Kickstarter and Indiegogo.

If your fans want it enough that their pre-orders cover your costs, your risk is mitigated and you can get to work!

(And if they don’t, you don’t waste any time and money making something that won’t sell)

I’ve purchased some truly incredible products through this model, including:

All of these had some sort of pre-order system in place that (I assume) amortized the cost of the Creators’ efforts and initial manufacturing run.

And all of them are absolutely fantastic, ridiculously high-quality products. 

The downside is that the upside is capped. 

A POD product can be purchased infinitely. A boutique product eventually runs out, and you have to decide whether or not to take more inventory risk.

The boutique pre-order model isn’t for every Creator. For most, POD might be the simplest, easiest way to get something out there for fans to buy.

But for those Creators whose brands are tied to quality, who really want to deliver something much better than the norm - there’s a new model that seems to be working.

Poll