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How Much Merch Should You Stock?

I've changed my mind since writing that merch problems are an insult to your fans. While I still agree that losing revenue and bumming fans is bad karma, I'd like to refine my position.

When you buy inventory, you're forecasting demand. Easy for Walmart, difficult for musicians meeting at Taco Bueno. So when you decide how much to buy, you can either err on having too much or too little merch, so let's take a look at the costs and benefits of each decision..

Excess Inventory (Pro):
   Less risk of lost sales / bummed fans.
   Bands with larger fan bases can still possibly sell excess inventory.
   Bulk discounts.
   Less waiting for fan orders.
Excess Inventory (Con):
   Higher up-front costs.
   Higher risk of having unsold inventory (taking a loss).
   More inventory to track and haul around to shows.

Limited Inventory (Pro)
   Lower up-front costs.
   Less risk of unsold inventory.
   Easier to experiment with different items. (Top sellers are easier to scale up, bad merch is easier to drop)
Limited Inventory (Cons)
   More risk of lost sales / bummed fans.
   No bulk discounts.

Personal experience: We waaaaaay overestimated demand on our initial release. We could have saved a significant amount of money by buying less merch in preparation for our first release. Since our first release was paid out of our own pockets, overpaying was not only a bummer but it's left a chunk of our capital sitting idle in the corner of the practice room.



My advice for your band?

For an entry-level to mid-level band: It's better to err on the side of too little. In this stage you're still experimenting with merch, sound, marketing and whatnot. Since you're not relying on your legacy material as much as a more established artist, you should always experimenting to find what your fans want the most. Having demand drive your decisions will save you money AND help you get a feel for what sizes/things your fan base actually wants.

For a mid-level and above band (extended tours): It's better to err on the side of too much. Esetablished bands have breadth of both material and fans. If a shirt doesn't sell on one tour, you can carry it over to the next one with a better shot at selling than only a local band. And since larger bands rely more on merch, the risk of missing a sale hurts much more than a smaller band that's still building out a product line.

What's your take?

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