10 Ways to Avoid Merchandise Cuts and Save Money as an Artist
I have sold merchandise for dozens of bands and music festivals. As a promoter, I have never taken a merchandise cut. For those who aren’t familiar, a ‘merch cut’ is when a promoter charges a band a percentage of their merchandise sales.
How do merch cuts work?
Typically it looks a lot like '“30% on soft, 10% on hard” which means if it’s soft like a t-shirt the venue wants 30% of sales and if it’s hard like a CD or poster, they want 10%.
An example of how this plays out…
$1,000 in revenue for t-shirts, hoodies & hats - Promoter/venue takes $300
$250 in CD & Poster Sales - Promoter/venue takes $25
Then there are other fees they like to take out…
Retained Sales Tax (7-8%) - Promoter takes $93.75
(VAT Tax is 10% or higher in Europe to compensate for the import of goods)
Venue Seller Fee - Promoter takes additional $150. (Ex. $150 for a seller OR an addition 10-20% of sales whichever is higher)
So at the end of the day…
-$500 (cost of goods sold) + $1250 revenue = $750 - $325 (merch cut) - $93.75 (Tax) - $150 (Seller Fee) = $181.25
Yes, I know, it disappears fast. Then there’s the cut for the record label or the manager.
Disclaimer: It is fair to retain sales tax and venues definitely need to compensate staff, but in cases where it’s mandatory that the venue sell for the band and they take 20% extra, they can be taking half the revenue, if not more. (Venues have staff physically count in merchandise inventory in cases where the band sells it themselves to monitor their numbers…more on this below)
Rather than start my complaining and over-embellish, here it is…
10 Ways to Avoid Merch Cuts and Save Money!
Ask your manager and/or booking agent to add a “no-merchandise cuts” clause to your performance agreements (Or at the very least, have them use it as a negotiating tactic - “If you can’t meet the requested guarantee, can you please waive all merchandise fees? Then we can confirm the show.”
Have fans tip you for a “free item”. This is not the sale of an item, so it is not taxed either. Don’t just do this with a sticker, do this with posters or another limited item fans can only get with tipping.
Lie your ass off. For the integrity of the bands I have worked for, I assure you I have never done this. If you are going to save $$$, be prepared to lie when they ask you “How much did you sell?” Many strategies below to seal the deal…
Use an alternative spreadsheet to calculate your totals, or duplicate the original toward the end of the night and alter it. This only works at smaller venues on smaller tours AND you need to be ready to commit. Don’t be sloppy with this one, have a system.
Use alternative merchandise systems. If you use atVenu for shirts & CDs, have a backup Square account for selling your vinyls & hats.. you will need to be sneaky with this one! (If you get caught say you were having Wifi issues with your original system and didn’t want to lose the sale)
Give fans an incentive to pay with cash. Again, this is a way to circumvent a system - throw the money in the tip jar if you need to.
Sneak merchandise into the venue with a backpack or empty guitar case. If they insist on doing count ins and count outs, sneak in extra merch. Only add what you know you have sold so you don’t ever have quantities that exceed the original count.
Pack up and leave before the venue can collect their cut. If you do this, make sure your crew is all aware - it is best to make this a calculated move, and you should only do this as an opening act.
Have an iPad available on the merch table where fans can other merchandise directly from your website. And as the above ideas haven’t made this clear enough, don’t tell the venue what the iPad is for and don’t report these sales.
Avoid using venue sellers. I want to make it clear that there are great people working at larger venues, but they are held to the responsibilities of their job. So within this item, I’d like to add that whenever possible you should avoid putting an honest, hardworking venue rep in a bad position with their employer.
I hope this list gets you inspired to take home more of the money you have worked hard for and earned. Please try #1 and #2 first.
If you get caught doing something shady, better to admit what you’ve done, apologize, and live to play another day. I am not endorsing these ideas or claiming to have done these things. There are clearly some that involve more creativity and less lying.
At the end of the day, I really have no pity for multi-billion dollar companies losing out on a few hundred dollars. Please don’t deploy the shady tactics with independent venues or promoters. Wherever possible, don’t put honest, hardworking people in bad positions.
This industry desperately needs those who advocate for artists (managers, agents, promoters), to double down on doing their part. This industry desperately needs the multi-billion dollar companies to stop charging insane ticket fees on top of merchandise fees and promoter fees on top of venue fees.
If you’re an artist staying quiet, I encourage you to speak up.
If you’re being loud, get louder.