Should your <product/service/brand> sell merch this year?
Selling branded merchandise can be a great way to add a revenue stream to your business and build brand awareness. You probably already have a t-shirt or tote bag in your closet from a favorite coffee shop, brewery or grocery store.
How did those businesses decide to pull the trigger on custom merch?
Top 3 questions to consider before purchasing custom merch
Does my <product/service/brand> deliver quality?
The best place to start for any business is focusing on quality and building trust by delivering a 5-star experience. This can also lead to more referrals- bonus!
Do I have a community of customers that love to show their support?
If you answered yes to question 1, there’s a good chance that your answer to this question is also yes, which is great news! It’s important to build community around your business, so customers will be proud to rep your brand.
Do I understand the cost-benefit analysis for custom merch?
Return on investment for branded merch is all about impressions!
So, what is an impression?
If you choose to put your logo on a t-shirt, and one person wears that tee outside of their house, any interaction they get becomes an impression. Their t-shirt now becomes a walking advertisement for your business that has spread to new places and new people you didn’t even know you could reach. And the best part? All that advertising is free!
Check out this great video from BELLA+CANVAS to visualize how impressions work!
Case study for custom t-shirt ROI
To help determine if your small business can benefit from custom t-shirts, let’s consider a case study for a local market. They’ve been in business for a couple of years and are interested in trying something new to increase their overall sales and add an additional source of revenue.
What will the t-shirts be used for?
The market has a loyal following, so they plan to sell most of the t-shirts to their customers.
They’ll host five social media contests this year where the prize will be a branded tee.
Five shirts will be saved to gift to potential business partners.
And they’ll give ten to new employees as uniforms.
The market wants a quality t-shirt that they know people will enjoy wearing, so they’ve opted for a BELLA+CANVAS premium t-shirt for its superior fit and softness. Let’s start with a hundred shirts at an average price of $9 per shirt. Shipping is always free with Magnetic Merch, so the initial investment will look like:
(5 social media prizes x $9) + (5 business partners x $9) + (10 new employees x $9) = $180
The remainder of the 80 t-shirts will be marked up by two and sold for $18 each for an overall value of $1,440.
We’ll estimate that the market sells 2 t-shirts per week, which means they’ll be out the $720 cost of the t-shirts for 20 weeks. We’ll say the cost of this is 10% interest earnings for the year at $72. So far, the total cost to our market for custom printed t-shirts has been:
$180 for the shirts that won’t be sold + $72 of interest = $252
The market will break even on the 80 t-shirts once it sells the 40th t-shirt, which means t-shirts 41 through 80 will be all profit!
Now let’s discuss the return in terms of impressions, or the number of people who will see the custom t-shirt. Impressions depends on two main variables: how many times the person wears the t-shirt and how many people see the t-shirt. Excluding the 10 employee t-shirts, there are potentially 90 t-shirts out in the world. We’ll estimate that each of those 90 people will wear their t-shirt once a month, since most of them bought the t-shirt and it’s so comfy! In the great state of Texas, it’s almost always t-shirt weather, so let’s call that 9 wears per year.
The next part can be tricky as it’s difficult to guess how many people our t-shirt wearers will come in close enough contact with to see their t-shirts. Let’s say that 10 is our low end of impressions and also consider a higher value of 50 impressions per wear. The total number of impressions would be:
(90 t-shirts x 9 wears) x 10 impressions = 8,100 impressions/year
(90 t-shirts x 9 wears) x 50 impressions = 40,500 impressions/year
8,100 to 40,500 impressions in the first year of distributed t-shirts is a lot of potential new customers! And the cost per impression is only:
$252 / 8,100 = $0.0311 or $252 / 40,500 = $0.0062
A penny per impression from the initial $252 investment, plus $720 of profit from selling their merch, makes brand marketing a no-brainer! Whether it’s t-shirts, hoodies, hats or tote bags, it’s clear that putting your company’s logo on merchandise and getting it out and about is a fun, inexpensive way to attract more customers and meet your sales goals.
Ready to get started on your custom merch project? You can email us, browse our recommended products or get a quote here!