Should You Start a 'Merch by Amazon' Business?
Merch allows you to upload your t-shirt designs and sell them in the world's largest ecommerce marketplace. Are you listening, designers?
Are you familiar with the Merch by Amazon platform? It allows you to upload your unique t-shirt designs and sell them in the world's largest ecommerce marketplace. Designers will find this prospect particularly appealing, since they may already have artwork concepts stored away in their archives, ready to be leveraged.
You may even already be selling your designs on other platforms.
But what about non-designer sellers who are interested in this opportunity? If you're one of them and don't know how to put together attractive t-shirt designs, you may be wondering if you'll be left in a lurch.
Fortunately, it is relatively straightforward to run an MBA (Merch, not master's) business with a team in place; the business can actually run itself. What's more, some sellers have reported making tens of thousands of dollars per month selling t-shirts (though this is certainly not the norm).
Here are some of the pros and cons of starting a Merch by Amazon business, from the perspective of a designer and entrepreneur.
1. Fulfillment by Amazon means no distribution hassles or shipping and storage. Whether you're a designer or seller, the fact that Amazon handles everything from production and manufacturing to logistics and customer service means you don't have to sweat the details. You won't need to purchase large amounts of stock and find a place to store it, nor will you have to pick, pack and ship products to your buyers. You won't have to deal with angry customers, either.
Your primary concern will be creating designs consumers love and finding ways to stand out from the competition. Experienced sellers may already know how to do keyword research and optimize listings, but if you're a designer, this is a skill you may need to develop or potentially outsource. It's critical to your success.
2. Amazon takes royalties only from shirt sales. This means there are no up-front costs associated with starting your Merch by Amazon business. Amazon charges you only when you sell an item, and pays you whatever is left over after its costs and fees. On a $20 t-shirt, for example, you can expect to make roughly $7.
Therefore, your profit margin is relatively predictable. Since Amazon handles customer service and distribution, it's a pretty fair tradeoff. It frees you up to focus on designs and business development -- the more nuanced aspects of the operation.
By determining your profit margin ahead of time, you can also figure out how much you can put toward marketing and outsourcing; the numbers are relatively easy to crunch. Generating higher volumes of sales is the tough part.
3. It's easy to maintain once you have a team in place. Sellers interested in taking advantage of this opportunity will need to put a team in place to get their business off the ground. If you currently have a site with merchandise that already has a proven track record of selling well, you might even consider raising funding to get a team in place right off the bat to build out and scale your designs right away.
This process may take some time. Finding a skilled designer isn't difficult. You can hire contractors using platforms like Upwork or Freelancer. But you should be aware that finding the perfect fit will take time.
Not only do you need to find someone who can skillfully craft designs: You also need someone who is aligned with your overall vision. Don't be surprised if you end up going through multiple designers before settling on one that understands your stylistic requirements. To make the most of this opportunity, you will need multiple designs. This means you'll want to build a strong relationship with your designer.
Whether you're a designer and your business is growing fast, or a seller who requires the help of a designer, outsourcing will become essential to scaling and maintaining your business.
1. There is heavy competition in the niches. It has often been said that the riches are in the niches. But when it comes to Merch by Amazon, there is already heavy competition, even in the niches.
To make matters more difficult, there are some things you need to watch out for, such as copyright laws and copycats.
When putting designs together, you need to ensure they do not infringe on any existing trademarks. If Amazon finds issue with your designs more than once or twice, you will be banned from Merch by Amazon. Treatment for copycat or knock-off designs is equally harsh--if not harsher.
If you are persistent in your efforts to build your business, however, and work hard to diversify your profit streams, it's possible to build a five-figure per month business. The value of your MBA business will ultimately be determined by how streamlined your team is, how well your designs are selling, your marketing strategy, and cross-platform selling.
2. You'll Need to do SEO research to get ahead. Optimizing your listings within Amazon will be key to your success, and where the bulk of the work lies. Failing to take this step could mean sabotaging your chances at creating the kind of income you're hoping to achieve.
Fortunately, there is no shortage of keyword tools you can use to conduct competitive analysis, such as Merch Informer. Finding a high-volume, low-competition keyword can take time, but it will give you a better chance at making a go at the Merch by Amazon opportunity. Research can make or break your business.
Another key piece of information you'll want to look at is a product's Best Sellers Rank. You can tell how well a product is selling by looking at this number. The lower the number, the better the product is doing in the marketplace overall.
Merch by Amazon is a research-intensive business. If you want to generate higher levels of revenue, you'll want to take your time to find keywords worth targeting. The effort you put into this will pay off, but you must be willing to put time and energy into this aspect of the business.
There isn't necessarily a major advantage to being a designer in the Merch by Amazon business if you don't know how to do SEO research. Meanwhile, if you're a seller and don't know how to develop a design, you have no way to get your business off the ground without some help. Balancing these two roles is the key to success in an MBA business.
How well you do in this opportunity mostly comes down to whether it's something you want to pursue and if you have the patience to research and work with outsources.
Entrepreneur Leadership Network Contributor