3. How much money can I realistically make with Merch by Amazon?

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Welcome to the Merch Entrepreneur Podcast. I’m your host, Elaine Heney, and in this episode, we’re going to have a look at how much money can you realistically expect to make with Merch by Amazon. I started this business in February of 2016, and what I’ve found is that it is a bit like Amazon FBA – if you’re familiar with that program.How much you make depends on two major factors. Number one, how many products you’re selling, and number two, what time of year it is.

Initially when I started to sell in early February, I was at the 25 tier, so just 25 t-shirts that I could put up. I think my … Let me just double check how much money did I make in my first month. My first month profit, I made $49.84. Not absolutely massive or huge or anything like that, but this for me was proof that it could work.

If I could make that much money with 25 t-shirts, I was like, okay, I’ve got it. This is scalable. All I need to do is to upload more t-shirts to get tiered up, which I’ll talk about again, but to get tiered up to be able to upload more t-shirts because my theory was that the more products I had for sale, the more potential sales that I could make.

Just going through, been selling for nearly a year now. Spring was kind of okay. It really got interesting in the couple of weeks coming up to Father’s Day. That seemed to go absolutely crazy. I think from talking to other sellers as well, it was similar. Everyone got a really good lift. At the same time, I think actually maybe a bit before that, Amazon started throttling, and they started delaying the tier ups.

Basically, the way it works with the tiers is when you get your new account, you can only upload 25 t-shirts. Once you sell 25 t-shirts, Amazon is like, “Okay, you’re doing a good job. Now we’re going to give you 100 slots.” Then you’ve got to really quickly upload the next 75 designs. Then you’ve got to sell 100 t-shirts, and then once you’ve a 100 t-shirts sold, doesn’t matter who buy them, doesn’t matter if you sell 99 of one t-shirt and one of another t-shirt or you sell one of each of your 100 t-shirts, they don’t care.
Once you’ve got 100 t-shirts sold, then you move up to the 500 tier. Then yo have space for 500 t-shirts, and it continues on. It goes to the 1,000 tier, 2,000 tier, 4,000 tier, which I’m on at the minute, and then either six or eight. I’ve heard of people being tiered up to both. Then ten, and God only knows what’s beyond that. It’s really good.

Basically, if you prove that you can sell, then Amazon gives you more space. What was happening, and it happens on and off, is that Amazon can have difficulty with capacity. Obviously this is a brand new program for Amazon. They’re just trying to figure it out. They didn’t really know what demand was going to be, how many sellers were going to be on the platform, are people going to buy these t-shirts.
What they I think have realized quite quickly is that demand is huge. They’re actually having problems keeping up with being able to complete all of the orders. When this happens, what you see on the Amazon website is that instead of your t-shirt shipping in two or three days or something, now instead if someone wants to order, it’ll say, “This t-shirt will ship in seven to 10 days,” which isn’t really ideal which may actually cause people not to place the order.

As well as that on the seller end, they can stop tiering people up. Maybe you’ve sold 25 t-shirts, and you reach that point a couple of days ago, and your account is still at 25. This is what was happening in the Spring, and people actually waited … I think I was waiting to tier up maybe from 100 to 500, I was waiting a month or two, and it just stayed solidly at 100 even though I’d sold 150 or something at this stage.

There’s nothing you can do, but with the timing corresponds with when you actually should be tiered up, you can be delayed a number of weeks, a month or two, which will obviously impact your sales because then you can’t upload anymore designs. That’s what they were doing. I think there’s a little bit of that happening now. I know some people were due to tier up in the last two or three weeks, and it doesn’t seem like anyone has tiered up recently. They seem to have put a bit of a hold on the tiering up at the minute, which isn’t really ideal.

Then the other thing is with the throttling. If they can’t keep up with the demand, what they do sometimes with the various algorithms that they use is that your t-shirt won’t always display in the search results. If you go and search for it, even though it’s live, you actually might not be able to find it in search. This is because Amazon again, they don’t have the capacity to fulfill all of the sales that if everything was available …

They don’t have the people or the machines. Obviously they’re running to catch up the whole time and make sure that they do have capacity, but it takes time to train people. These machines are incredibly expensive, so they have to put everything in place. Sometimes, your sales can be impacted because literally people can’t find your t-shirts on Amazon, or sometimes also maybe they can find your t-shirts, but it’s not available in black or all the women’s sizes have disappeared, that kind of thing.

It’s not perfect, and there’s definitely things going on that for now are going to have a small impact on how much you can actually sell. It’s not like everything you put is for sale everywhere all the time, but still. Even regardless of that, it’s still a huge opportunity that you can jump on. I was trying to work out a calculation of how much money you can actually expect to earn with Merch depending on how many t-shirts you have. It really depends.

In terms of the time of the year, when it started in February, it was okay. I didn’t really know what to expect. Coming up to Father’s Day, there was a huge boost because people were going crazy buying Father’s Day t-shirt. Any t-shirt that had the word father in it was pretty much selling. Then right maybe just a few days before Father’s Day when it was too late to print and ship t-shirts, then everything just nose-dived.

I was thinking summer would be busy because t-shirts, people wear t-shirts in the summer, but the summer was kind of quiet. Then it picked up again a couple weeks before Halloween and then got really busy coming up to Halloween, a little bit like Father’s Day again. Then three, four, five days before Halloween itself, everything for really quite because again the shipping wasn’t going to work for people, so they had to stop buying on Amazon. They wouldn’t get it on time.

Now we are in November, and there was a couple of quiet days at the start, but it started to pick up again, maybe back to normal. Then definitely looking forward to Black Friday, Cyber Monday, Q4, where I predict things are going to get a little insane. I know that for FBA, you could expect to do somewhere between at least three times your normal sales in that month or six weeks between the end of November and December. I’ve heard crazy stories of people doing six times the normal sales or ten times, then everybody runs out of stock and there’s a panic and all this kind of stuff.

One of the wonderful thing about Merch by Amazon is for the first time, stock is not our problem. Running out of stock is Amazon’s problem. They’re the ones that need all the t-shirts in the warehouse. I hope there’s many, many trucks with Amazon logos on them driving in towards them, their t-shirt warehouse just to stock up on zillions and zillions of t-shirts that they’re ready for the rush of Q4.

In terms of how much revenue and royalty that you can make, again, one of the things, it depends on the price of your t-shirt. I definitely recommend just starting at $19.99. If you’re going for something really competitive, you can go a little bit less expensive if you’re doing something that you think is maybe there’s not as much competition in Amazon or you really like the design or you think it’s quite unique, you could do it for more. You could do it for $24.99 maybe. It’s really up to you, but about $20 is a great place to start.

In terms of the calculating it, I think conservatively, if you were to be sensible about the numbers, there is … I was working out this thing which I call the 150% rule. Basically, if you have 100 t-shirts in your account, you could expect to make about … This is a conservative estimate, about $150 a month. If you have 1,000 t-shirts in your account, you can expect to make maybe $1,500 a month. If you have 8,000 t-shirts in your account, you could expect to make about $12,000 a month.

For these numbers, I’ve hit the 150% rule. In times when things are busy like Halloween and Father’s day, I’ve gone way beyond it. Then you get your slower days when you’re a bit under it, and I’m like, “Oh, my God. What’s happening? Somebody turn on the traffic.” It really depends, but that’s just a good, conservative ballpark, what can I expect. It really comes down to a numbers game that if you have 25 t-shirts, you’re just not going to make a lot of money because you’ve got so few products.

With Merch by Amazon, it’s really about … You need to have nice designs and good keywords, but a good 50% of this is quantity. It’s how many t-shirts can you put up. If you have empty slots, you’re leaving money on the table. You need them full. If they don’t sell, you can delete them and put up something else. For me, empty slots are a no-no.

That is it for this episode, how much money can I make with Merch by Amazon. Just think of how many t-shirts that you’re going to have up. If you have up 100 t-shirts, I would say you could definitely aim to earn $150 for that month. If you have 1,000 t-shirts, you could definitely aim to earn $1,500 dollars that month.

If you can think of how much money would I like to make, maybe as a side income, “I’d really like $1,000. I’d really like $2,000. I’d really just like $500 dollars. That would be really good, make a big difference,” you can work out from there how many t-shirts that you need to publish and what tier you need to be at.

That’s it for this episode. I hope it was interesting. If you want to learn anymore, you can pop over to the website, MerchEntrepreneur.com. We have a cool little handout, top five tools and resources that you can use to grow your Amazon business. You’re welcome to grab a copy. That’s it for this episode, and talk to you in the next one.

Thanks so much for joining us this week. If you enjoyed this episode, press the SUBSCRIBE button on your iPhone and automatically get each new episode when it is released. Have some feedback you’d like to share? Leave us a review on iTunes!

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