Merchandising 101: How to Make Money Beyond Music Sales

Article by Manuela Bittencourt – 08/05/2025

In today’s music industry, selling music alone often isn’t enough to make a living. That’s where merchandising — or just “merch” for short — comes in. Merch gives artists a way to monetize their brand, build loyalty with fans, and promote their identity far beyond streaming platforms.

From t-shirts and mugs to exclusive limited drops, merchandise has become both a creative and financial cornerstone of modern music careers. Whether you’re an established act or just starting out, this article breaks down how merch works, how to produce it, and how to sell it strategically.

What Counts as Merch?

Merch includes physical items branded with an artist’s name, image, or likeness (NIL) — a form of intellectual property known as the right of publicity. This right allows individuals to control and monetize the commercial use of their name, image, or likeness. While the right of publicity is governed by state law, emerging technologies like AI are pushing conversations around federal protections.

Common merch items include:

• T-shirts and hoodies
• Coffee mugs 
• Buttons and patches
• Hats and beanies
• Posters and signed vinyl

These are often sold at concert tables, on the artist’s website, or via print-on-demand platforms.

Merch and Record Label Deals: 360 and 180 Agreements

If you’re signed to a record label, you may not own or control 100% of your merch revenue.

What is a 360 Deal?

A 360 deal (also called a “multi-rights deal”) is a contract where the record label earns a percentage of all the artist’s income — not just music sales. Think of your income as a pie — under a 360 deal, the label gets a slice of every piece: merch, touring, brand deals, publishing, sponsorships, and more — not just from the recorded music. 

In exchange, the label typically provides funding, marketing, tour support, and sometimes full control over merchandise manufacturing, distribution, and design.

The label’s reasoning behind a 360 deal is this: “If not for our investment, those additional revenue streams wouldn’t exist.” In the early 2000s, most artists were virtually unknown until they landed a record deal. If a label saw potential—maybe you were playing local gigs—they might take a chance on your demo, even if you were unproven. That meant assuming significant risk in hopes of turning you into a star. From the label’s perspective, since their financial backing and infrastructure were key to launching your career, it’s only fair they share in the income generated across all areas—not just record sales.

What’s a 180 Deal?

A 180 deal gives the label a cut of only some revenue streams. Which rights the recording artist and record label decide to work on together is up for negotiation (this works for both 180 and 360 deals). This comes up with all types of labels (indies, majors, etc).

If you’re negotiating a label deal:

• Ask if merch is included in their revenue participation.
• Negotiate the % split and clarify who controls production and creative direction.
• Understand whether you can still sell your own merch independently on other platforms.

Why might artists agree to these types of deals? Things to evaluate.

Labels offer these deals because they help fund the upfront costs of merch manufacturing and distribution. For newer artists without the resources to launch merch lines on their own, this can be a valuable service.

Before signing a publishing deal, it’s essential to carefully assess what exactly is being offered. Don’t just look at the headline numbers—dig into the details. Ask yourself:

• 💰 What’s the advance?
  How much money are they offering upfront—and how does it compare to other offers?
• 📈 What’s the royalty compensation?
  How will you be paid going forward? What percentage of publishing income are you entitled to?
• 🛠️ What rights are being granted?
  Are you giving them exclusive or non-exclusive rights? Is it a co-publishing deal, an administration deal, or a full publishing assignment?
• ⚖️ Who owns the copyright?
  Are you keeping ownership of your songs, or will the publisher own the compositions?
• 🔍 Are there better offers on the table?
  Compare multiple deals if possible. Is this the best publishing agreement you can get—or is someone else offering more favorable terms?

Focus on the three most important elements: Compensation, Rights & Restrictions, and Copyright Ownership. These define your creative freedom, long-term earnings, and control over your music. Don’t rush—get legal advice if needed.

Downside: You lose control and a portion of your profit. The label may take a large share of income for handling production, even if you could have outsourced it more affordably yourself.

Active vs Passive Roles for the Label in These Deals

In 360 or multi-rights deals, a record label can take either an active or passive role in non-record revenue streams (like touring, merch, endorsements, etc.). The distinction affects how much control the label has and how money flows between the artist and the label.

Passive Role

• The label does not participate in decision-making and does not provide services related to that specific revenue stream.
• They simply receive a percentage of the income.
• Example: If the label has a passive interest in touring, and the artist books a tour with a promoter on their own, the label doesn’t help plan or execute the tour, but is still entitled to a share of the profits.
• In this case, the artist pays the label its share, similar to a revenue cut—no royalties are paid out by the label.

Active Role

• The label takes the lead in managing and executing the activity. They’re involved in decision-making and logistical planning.
• The artist may still work with outside partners (like a tour promoter), but the label oversees or coordinates those efforts.
• Here, the label is heavily involved and may even provide financial or operational support.
• In these cases, the artist might receive a payout (like royalties), but the label retains significant control over the process.

Before signing a 360 deal, artists should clarify which revenue streams the label is involved in—and whether the label’s role is active or passive in each. This affects both creative control and financial arrangements. Make sure you negotiate the % the label will keep, if possible. For some artists, keeping full control of their merchandise is a reason to stay independent.

Designing and Producing Merchandise

Know Your Audience

Understanding your fanbase is key. What age group are they in? What styles do they wear? Are they into minimalist, edgy, or nostalgic aesthetics? Use polls or comments on social media to  gather feedback before launching designs.

Start With Strong Branding 

Your visuals should reflect your music and persona. Invest in professional design, or work with a graphic designer to create compelling logos, album art, or slogans that translate well onto physical items.

Understand the Merch Industry

The merch business is a highly specialized industry. Decisions like how many T-shirts to print, what sizes to stock, or which colors sell best aren’t always intuitive. That’s why many artists partner with experienced third-party merch companies.

Some leading companies and platforms include:

• Bravado (owned by Universal Music Group):
  • The industry leader in large-scale merch production
  • Focuses on pre-manufactured merch sold at live events
  • Mostly used by universal-signed artists, but available to others too
  • Not typically used by Sony or Warner artists
  • Offers robust infrastructure, but less artist control over creative/design

• Print-on-demand (POD) platforms like Zazzle or Cafè Press:
  • Manufacture-on-demand: items are only made after purchase
  • No upfront investment required – ideal for independent artists
  • Pick products, upload artwork, and set prices
  • The platform keeps a base cost, and you earn profit from the markup
  • Useful for custom merch and testing limited designs risk-free

Setting Prices and Managing Inventory

Pricing Basics

To determine how much to charge for merch, calculate:

• Production cost
• Shipping and packaging costs
• Platform or third-party fees
• Your desired profit margin (usually 30-50%)

Research what artists in your lane are charging and use that as a reference point. Pricing too low cuts into your margins; pricing too high could hurt sales.

Inventory Options 

1. Bulk manufacturing:
   1. Higher profit per unit
   2. Requires upfront investment
   3. Risk of unsold stock
   4. You’ll need to manage shipping, storage, and sales
   5. Best for artists with a solid fanbase and reliable demand
2. Manufacture-on-demand:
   1. Zero upfront investment
   2. Products made only after they’re purchased
   3. No risk of leftover inventory
   4. Slightly lower profit per item
   5. Great for testing designs or building your first merch line

With platforms like Zazzle or Café Press:

• You select the products (shirts, mugs, stickers, etc.)
• Your design is printed onto pre-manufactured items
• They handle production, fulfillment, and shipping
• You set a price above their minimum to make profit

Selling Merch Online vs At Shows

Online Sales

Pros:

• Reach fans around the world
• Runs 24/7
• Ideal for passive income and digital marketing campaigns

Cons:

• Requires consistent promotion
• Shipping logistics and customer service can be time-consuming
• Platform fees can eat into profits

Tips:

• Use Shopify, Bandcamp, Big Cartel, or your own website
• Run limited-edition drops to create urgency
• Promote through Instagram, TikTok, and email newsletters

Selling at Shows

Pros:

• Highest sales conversion rate – fans are hyped and emotionally engaged
• No shipping or third-party fees
• Great opportunity to build direct connections

Cons:

• Physical setup required
• Must manage stock, POS systems, and staff
• Only accessible to people attending your shows

Tips:

• Accept card + mobile payments (Square, PayPal, Tap)
• Offer exclusive “tour only” merch
• Create bundle deals (e.g. shirt + CD + sticker for $30)

Final Thoughts

Merch isn’t just about making money – it’s about building a visual and emotional extension of your music. Whether you go DIY with print-on-demand platforms or partner with a label through a 360 deal, having a merch strategy is crucial for your career.

Understand your contract. Know what you’re giving up if you let a label control your merch. And don’t be afraid to start small – even a single T-shirt design sold online can begin a long-term relationship between you and your fans.