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Merch Is the Money: Turning Tour Margins into Real Independence · Clone Wars: The Spinoff

• 0:00
  Welcome back to Clone Wars: The Spinoff.
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  Today the title says it all: Merch Is the Money.
• 0:06
  Four voices in the room, and we start with the number that scares people.
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  A Ditto Music survey of 1,500 unsigned artists found 82 percent can't afford touring
• 0:17
  costs.
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  And a Pirate Studios survey found 72 percent of the artists who did tour made zero
• 0:23
  profit.
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  Calvin, you lived the Atlanta math.
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  Walk us through it.
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  Two week regional run, ten cities, you can spend three to eight thousand dollars
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  before you sell one ticket.
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  Fuel, van repairs, lodging, per diems, inventory.
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  In Atlanta, 1,200 capacity room, my net door guarantee was fifteen hundred.
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  The merch table did thirty eight hundred.
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  That's why one thirty five dollar shirt is worth roughly 8,750 streams.
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  Chartlex puts merch at 30 to 50 percent of touring revenue for independent acts at
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  the club level, around two to eight dollars per attendee.
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  Hip hop can run higher when the piece feels exclusive, but treat that as a lever,
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  not a guarantee.
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  And that's why I start with ownership before the shirt.
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  Own your masters, own your storefront, own your customer list.
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  If a platform holds the list, they can mute you tomorrow and your merch money goes
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  with it.
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  I promise I'm gone eat it all, and you can't eat what somebody else owns.
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  Then comes the part that eats your plate: venue merch cuts.
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  Usually 10 to 25 percent, and 25 to 35 percent in the big corporate rooms.
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  Dan Mangan wrote about this on Talkhouse.
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  Hard merch, meaning music like vinyl and CDs, usually gets a lower commission.
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  Soft merch, shirts, hats, totes, gets hit higher.
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  Do the math on a thirty dollar shirt that costs ten to make.
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  Twenty percent to the venue drops your take from twenty dollars to fourteen.
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  That's thirty percent of your margin gone.
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  And Mangan's point is that nobody reads that line in the contract until it's too
• 1:58
  late.
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  In rooms under 300 capacity, Chartlex says those fees are often negotiable or
• 2:05
  waived.
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  Bring your own card reader, Square or Stripe, bring your own seller,
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  and read the deal memo.
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  Cadence Weapon's #MyMerch campaign helped push over 200 venues and festivals to say
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  no to cuts, per Mangan.
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  So ask the question out loud.
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  Worst case, they say no.
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  Now the cost side, because I'm Currency Development, I live here.
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  Bulk screen printing gives you about double the margin of print on demand.
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  A heavyweight tee, Comfort Colors or Bella Canvas, runs seven to twelve dollars in
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  bulk and sells for 25 to 35.
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  That's 60 to 75 percent margin.
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  Print on demand costs fourteen to eighteen dollars base, so you keep 30 to 40
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  percent.
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  Totes cost three to five dollars and sell for fifteen to twenty,
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  no sizing headaches.
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  Vinyl in a 100 to 300 unit pressing costs eight to fifteen dollars and sells for 25
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  to 40.
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  Track your real cost of goods: blanks, print setup, freight,
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  sales tax across states, card fees of 2.6 percent plus ten cents.
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  And that's where brand meets math.
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  Merch is the brand in your fans' hands.
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  Tour dates on the back, a bold simple front, a heavy blank that doesn't feel cheap.
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  A tour shirt is a wearable memory.
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  It says I was there.
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  Limited runs and drops create urgency, and a generic logo on a website can't do
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  that.
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  Bundle it too.
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  Shirt, vinyl, and tote for seventy instead of eighty three.
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  Bundles and tiered pricing can lift average spend 30 to 50 percent.
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  This is where knowledge of self comes in.
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  Supreme Mathematics and the Five Percent Nation shaped a lot of hip hop's language,
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  and I'm using it as a lens for building your own, not speaking for anybody's nation.
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  Knowledge, one: know your real costs, your audience, your list.
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  Wisdom, two: execute with discipline, a premium garment, a premium table.
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  Understanding, three: understand the settlement sheet and the cut percentages before
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  you sign.
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  Born, nine, is the business actually coming to life as equity and legacy.
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  Power, five, is economic independence, no corporate advance and no predatory room
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  split controlling your moves.
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  And Build or Destroy, eight, is dismantling the middleman habit while building
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  direct to fan: Bandcamp, Shopify, a QR code on the shirt tag,
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  an email clipboard at the table.
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  Generational wealth sounds big, but it starts boring.
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  Separate accounts.
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  Set up an LLC, run merch through the business account, and never treat cash in your
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  hand like personal profit.
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  Then reinvest 50 to 60 percent of net merch earnings into restocks,
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  masters, and physical assets.
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  Pay yourself last, pay the business first.
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  Alright, takeaways.
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  One, audit the contract before you sign: strike cuts on soft merch where you can,
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  push for zero on hard merch, and bring your own card reader.
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  Two, build a ladder.
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  Three dollar stickers, thirty dollar tour shirts, seventy dollar bundles.
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  Give every fan a price they can say yes to.
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  Three, track cost of goods to the penny, keep business and personal money apart,
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  and reserve inventory capital before you take a draw.
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  Four, capture the list.
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  QR code, clipboard, phone numbers, emails.
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  Your customer data is your land, so own it.
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  Build your own economy.