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This is a guest post by Carlos Castillo, a musicpreneur, web designer, live performance recordist and Captain of the Schwilly Family Musicians. Find him at SchwillyFamilyMusicians.Com, tweet him at @CaptainSchwilly, or email him at Carlos@SchwillyFamilyMusicians.Com.

As the band was packing up, I brushed by and could hear the owner spouting his contorted excuses about why he couldn’t pay the guarantee. I’ve heard it all before and I’ve felt that crushing feeling of not knowing how I would make it to the next town because an owner or promoter let me down. I was glad it wasn’t me in that position that night.

That’s why it surprised me to see that Tony just nodded and smiled as he listened the news!

It all made sense twenty minutes later when I saw him packing up the merch booth. As he stuffed an impressive wad of cash into his guitar case, he gave me the most valuable piece of advice I ever heard on tour:

“Don’t rely on the promoters. As long as you put on a killer show and have killer merch, you’ll always have enough gas to make it to the next stop.”

The bottom line is that if you want to be a professional musician, you should have a solid merch setup and promote it effectively at your gigs. Because it might be the only money you make that night.

What constitutes a solid merch setup?

The first thing you need to consider when developing your merch strategy is who your fans are. It should go without saying, but you’d be surprised at some of the misdirected merch attempts I’ve seen. So make sure to offer items that your fans want. Don’t assume you know. Ask them. Not only is it a great opportunity to engage with your fans, it’s a solid icebreaker topic if you’re shy about starting conversations with them. The more you get them involved in the development of your merch the more eager they will be to buy it. In fact, fan-designed merch (especially t-shirts) almost invariably outsells everything else on the table.

The other thing you need to consider is who the purchaser or decision-maker is. A great example is children’s music. The kids may be the consumers, but the parents are the purchasers. Although your shows may be filled with equal parts men and women, do the merch buyers tend to be from one group more than the other? Pay attention to that and provide merch that suits the buyers.

Set up your merch booth professionally! Here are some quick guidelines to make sure people know you mean business:

Have an actual, packable, portable, merch table. It should be part of your regular gear and kept with your amps and guitars to that it’s with you wherever you go. Invest in a banner and tablecloth or whatever else you need to make it look nice. The investment in a professional quality merch table will pay for itself almost immediately.

Make sure it is well lit. I like to use flexible tube lights with a spattering of blinky buttons. The merch booth should be second only to the stage in spotlight coverage.

Position it in a spot that is visible when coming and going. As close to the smoke-break route as possible.

Have someone stationed at the table during the show. Placing an honor-system bucket on the table while you’re on stage is not nearly as effective as having an actual person there who is motivated to sell. A cut of the profits is a great way to motivate someone. Don’t take advantage of your friend’s kindness to run your table for free. Cut them in and you’ll feel the results in our wallet. Pay your money-maker. Don’t treat them like crappy promoters treat you.

When you’re not on stage, be at the booth. Make sure that is the area to party with the band. Not backstage. You don’t make money there. Backstage is where you get swarmed by groupies that drink your beer and distract you from the show. If you bring that party up front, some of those groupies will probably leave with t-shirts and CDs instead of (insert dirty groupie joke here).

The merch table should be the last thing you tear down. Not only do people hate carrying stuff around all night, it’s at the end of the night that they cash out at the bar and have their credit cards in hand. PS: Accept credit cards.

Pay attention to profit margins. Please don’t do mental math. Keep track of ALL costs (including paying you merch girl). Even if you don’t have an advanced understanding of accounting, by keeping track of all the numbers you will learn to understand and optimize your profit margins.

Don’t over order. The money you save by purchasing 1,000 CDs does you no good while those CDs sit in your garage. You might need that money to re-up on t-shirts or flasks or get your guitar fixed. The profit from having more variety in your merch will make up for missing out on that bulk discount. Use companies that provide fulfillment-as-you-go like Kunaki for CDs. Support local business (like screen printers) whenever you can and you’ll find they will return the favor.

How do I promote my merch effectively at shows?

Now that you have a bunch of great merch and an attractive table, what can you do to get that stuff off the table and into the fans’ hands?

If you want to be a professional musician, you’ve got to get out there and do your job. As with any other business “do your job” refers to more than making music.

You are responsible for all the activities associated with turning your music into money. That’s the difference between a professional and a hobbyist.

This is why it’s crucial that instead of basking in your rockstardom with a herd of groupies or hiding in seclusion backstage, you need to be where the money is being made. The math is pretty basic: As the star of the show, people will gravitate toward you. So be where they will spend money.

What makes people want to buy? Here are some quick tips to help you move that merch:

Rotate your merch. Having the same stuff all the time discourages repeat buying. So switching it up and offering limited edition merch will go a long way. Anyone with a business degree knows that it costs 6 times more to get a new customer than a repeat customer. Since you probably don’t have a business degree, I reckon that’s an important statistic for me to share with you;)

Announce from the stage that you have merch AT LEAST twice per show. Here’s an idea to try: “This next song is from our new album, ‘___’! And until we finish playing it, ANY of our CDs will be available for $5! Just go talk to Jason at the Merch table!”

Price individual items higher than you think you should so that you can offer discounted bundles. “CD’s are $15 or 2 for $20.” Yes, this can even work if you only have one CD. People still buy music as gifts. Maybe even have some pre-wrapped gift editions on display to “plant the seed” in their minds.

Design, commission, or otherwise achieve really good album covers. Those still make a difference, but there are some new considerations. This image should look good on an MP3 player. So crazy, intricate designs don’t do well for that.

Don’t skimp on the quality of your merch (especially t-shirts). Your merch represents your music very directly and very publicly. You should want the world to know that you provide quality products (music AND merch), not that your out to make a quick buck.

Have a cool shirt. Unless your logo is so cool that it stands alone (Rolling Stones, Misfits) you have to spruce it up. Lyrics on t-shirts sell well (let your fans pick the lyrics). Also fan-designed shirts, as I mentioned before.

Display your awesome shirt on the stage. Drape it over a speaker. Have hot chicks wear your shirts and sell them right off of their backs (LITERALLY)! Get women’s t-shirts and onesies (both very neglected yet highly in-demand products).

If someone buys a t-shirt, thank them form the stage. Point them out. “Look how cool Jerry is in his new t-shirt!” Buy him a beer. That’s a MUCH BETTER use of your drink tickets than getting wasted and falling off the stage. In fact…

Use your drink tickets to sell merch, NOT to get drunk. Some places will even sell you additional drink tickets super cheap. You can get pretty creative with that. Or you can simply hang out at the merch booth, mingle with fans, and buy drinks for people that buy merch.

Put a stack of CDs at the bar or cashier and make arrangements with the staff so that they can buy a CD when the pay their tab.

Have change on hand. It really bites to lose a sale because you couldn’t break a $20.

Ultimately, it’s important to note that marketing is not sales. Marketing is all the stuff you put into presenting your products professionally, and effectively engaging with your fans so that they want to buy. This should be part of your whole thought process and routine.

If you absorb that into how you manage your business, you’ll never have to ask for the sale, which I know is the hardest part…

My special invitation to the Jazz Spotlight Readers

I help musicians apply entrepreneurial skills to their careers. The Schwilly Family Circle is a community of Musicpreneurs just like you who are working toward making music our full time careers! Because I love The Jazz Spotlight (and you!) so much I’d like to invite you to join our community. Check out this Schwilly Family Musicans page, drop your email and I’ll send you over some awesome stuff I’m preparing especially for musicians like you.

Here’s what you’ll get:

An 11-page Strategy Guide for Marketing your Music online.

Regular updates and tips on how to make the most of your music career.

The opportunity to open a one-on-one dialogue with me about your musical journey, goals, and strategies about how to accomplish them.

Inclusion in our PRIVATE Facebook group where we share ideas and inspiration.

Thanks so much for reading my stuff and don’t forget to check out Schwilly Family Musicians.

Carlos Castillo is a musicpreneur, web designer, live performance recordist, international road-tripper, lap steel player, and Captain of the Schwilly Family Musicians. Find him at SchwillyFamilyMusicians.Com, tweet him at @CaptainSchwilly, or email him at Carlos@SchwillyFamilyMusicians.Com.