How Much Does It Cost to Make Merch

If you have a large fan base behind you, it might be a good idea to start your own merchandise to generate additional revenue. But, to do that successfully, you must know how much does it cost to make merch.

Let’s reveal the expenses of starting your own merch business and preparing the products for selling. Once you have a general picture of how big of a budget you need, you can make an informed decision whether it is worth it.

How Much Does It Cost to Make Merch?

Starting a merchandising business is one of the most popular business ideas in modern times. Unlike in the early days, today, everyone with enough followers and fans can start and run a successful merchandise business.

If you have innovative design ideas and a target group you can sell your products to, what you will have left is finances. So, how much does it cost to make merch?

The expenses to make your merch from scratch start at $15,000 and can reach more than $100,000. The reason behind the wide price range is that custom merch packages have variable expenses. Every decision you make will either reduce your budget or increase your overall expenses.

To calculate your specific merch cost, you should understand the two basic and unavoidable expenses, which include:

• Production costs per unit
• Fees for licenses and permits

Cost per unit

Your initial inventory is one of the basic expenses for starting a merch. The cost per unit might depend on the product you choose, printing services, and other additional services. 

You can use the table below as a guide to calculate how much does merch cost to make according to the quantity you plan to produce.

Merch product	Cost per unit
T-shirts	Starting at $2.5
Hoodies	Starting at $5
Caps	Starting at $5.5
Keychains	Starting at $1.5
Tote bags	Starting at $1
Mugs	Starting at $2
Stickers	Starting at $0.20
Phone cases	Starting at $2

Insider tip: When you are making your business plan and budget for your merch, it’s good to consider the scale of production. In simple words, many printing companies offer discounts when you order more units at once.

The inventory acquisition costs will depend on the number of units you plan on purchasing initially. The total expense for inventory will proportionally increase as you order more merch products. Generally, budgeting between $10,000 and $50,000 for a multi-product merch store is more than enough.

Licenses and permits

Many wonder do you have to pay to make merch. Well, if you consult with the law, you will have to. 

To run a legitimate merchandise business, you need various licenses and permits. The exact legal requirements and associated costs might vary from one state to another.

First, you will need an employer identification number (EIN). You can apply for one online and for free at the Internal Revenue Service website. Besides, obtaining a business operation license is required. The cost will depend upon the business type you plan to start. The starting price for a business operation license is $50.

Another important document required in many states is the seller’s permit. It doesn’t cost anything, but some states require a security deposit. Several states in the US charge a registration fee ranging from $5 to $100.

So, when starting a merch business, you should set aside at least $100 for licenses and permits.

Factors Influencing the Initial Cost of Starting a Merch

There are many factors that will influence the initial cost you should be ready to cover when you start your own merch.

Type of printing services you will choose

One of the biggest considerations is whether you will purchase in bulk or use print on demand services. Understandably, you will have to make a higher investment if you purchase in bulk and have all the units delivered and ready to sell.

The printing method can also make a great difference. You should choose the printing technique according to the type of product you want to offer, the design and the quantity of your order. Some printing methods are more affordable for small orders, while others are more suitable for large-unit printing. 

Design costs

The cost of starting a merch can depend on whether you hire a designer. If you do, it is highly important to ask whether they charge per design or by the hour.

Also, when brainstorming ideas for merch designs, it is essential to understand that more complex designs can cost more. If you choose to screen-print your merch you should expect higher costs per unit.

Product versatility

How much does it cost to make your own merch will greatly depend on the variety of products you want to include. The more versatile your product line, the higher the initial cost. 

Different products require different materials, manufacturing processes, and design considerations. Let’s take T-shirts for example. Although printing T-shirts is a simple process, the costs vary based on the material used for each T-shirt as well as the printing methods. Screen printing is an affordable option for small orders. In contrast, most use screen printing for orders of more than 24 pieces as more affordable.

Cost and quality of the materials

Not all merch products are made the same; the quality of materials impacts both durability and cost. High-quality materials typically result in more durable and premium-feeling products compared to low-quality materials. 

Cotton is softer and more durable than other materials, which offers a premium feel but comes at a higher cost. The same goes for organic cotton – an environmentally friendly material that is more expensive than blends.

Marketing and branding

Your marketing strategy can greatly influence the cost of producing merchandise. You have a range of marketing techniques available, from free to paid options. For instance, sharing content on social media and increasing your online presence is free and can yield substantial benefits. 

Conversely, you can opt for paid marketing strategies such as traditional advertising, search engine optimization, or search engine marketing, which provide targeted reach and enhanced visibility.

Merch strategy

How much does it cost to make merchandise will depend on the location where you want to sell your products. 

If you decide to make your products available only online, you will need to plan funds for website design and e-commerce functionality. You can use an e-commerce website builder or hire a web development company. Using an e-commerce website builder is more affordable and might take less time if you use templates. 

On the other hand, if you go with in-store sales, you will have to calculate other types of costs. To open your store, you must pay rent, operational costs, staff, etc. But if you find stores that will sell your merchandise, you will need to plan and pay for logistics, including product delivery.

Conclusion

Making merchandise requires a lot of dedication and, of course, finances. To determine how much does it cost to make merch, you will have to consider various factors. The most important ones are the quantity and versatility of your initial inventory, marketing strategy, design choices, type of printing services, etc. Before you start, make a detailed financial plan and do a thorough research on all of your options.