Is Merch by Amazon A Good Side Hustle or a Waste of Time?
During my never ending search to find a new side hustle, I came across Merch by Amazon. I'm familiar with Fulfillment by Amazon which is how I sell physical products on Amazon.com, but I hadn't heard of Merch by Amazon before.
Merch by Amazon is basically a smaller version of FBA, where you can only sell t shirts and sweatshirts, and Amazon will handle all of the order fulfillment and product creation.
Compared to the FBA program, Merch is even easier because you don't have to worry about finding a supplier or managing the logistics. All you have to do is come up with awesome t shirt designs and Amazon will take care of the rest.
Pros And Cons Of Merch By Amazon
Whenever I'm thinking about picking up a new side hustle, I look for 2 main features.
- Can this business make more money even if I'm not working on it. Said another way, am I trading my time for money or not? Hopefully not.
- Can I sell this business for a multiple of it's monthly profit?
There are a lot of side hustle gurus pushing Uber and Shipt because they're easy to get started with and you see instant results. But they both have the same problems and they violate both of my tests for side hustles.
As an Uber driver, if you aren't driving your car, you aren't making money. Being an Uber driver is basically a second job where you are trading your time for money and you can easily calculate your $/hr rate.
Being an Uber driver is also not a valuable asset. You can't sell your Uber business because there isn't a business there. Nobody needs to buy your Uber business from you, they can just sign up and start driving on their own.
Merch by Amazon checks off both of my criteria.
Once you have a t-shirt design created and listed on Amazon, you don't have to do anything else to it. I've got designs I made 6 months ago that are still selling a couple of shirts per week and bringing in passive income.
The second criteria is that the business can be sold for a multiple of monthly profit and Merch checks this box as well. Here's a sample of the listings on Empire Flippers for Merch businesses that have sold recently:
There's a handful of people who were able to get to $2k-$4k per month in income and they sold that side hustle business for $40,000 or more. Pretty impressive.
Merch by Amazon Cons
Ultimately the reason I quit Merch by Amazon is that it's too easy to have your designs knocked off. Even if you can come up with an awesome, unique design, as soon as you start to see good sales numbers coming in, you'll have a huge swarm of competitors copy your design.
Amazon does a good job of protecting your designs and making sure nobody makes a 1 for 1 replica, but if they just change a small thing like the color or 1 word of a phrase, they can be listed right next to your listing. Copy catting on Merch is rampant and unavoidable.
And unlike an Amazon FBA business where you can follow up with customers and gather reviews for your product, you can't do that with Merch.
You have no control over what your competition does and you have no way to strike back by getting better/more reviews since you are all sourcing t-shirts from Amazon; the only differentiating factor is the wording/design which is easy to copy and means you can quickly be knocked out of the search results by scummy competitors.
How To Sign Up For Merch By Amazon
You can sign up to join Merch by Amazon (MBA from here on out) by going here and clicking the orange button that says 'Request Invitation'.
Don't be scared off by the invitation part. Amazon hasn't 100% opened the floodgates on MBA so there's still a waiting period before you'll be approved.
When you sign up, you'll have to answer some questions about whether or not you have an existing brand and what type of business you're running. I answered these honestly (no brand, no business, nothing) and I still got approved.
I joined MBA a while ago, back in early 2017, and at that time there was about a 6 month waiting list for everyone who applied.
Since then, the waiting period has gone down a lot. The latest reports I've seen are that people are getting approved in less than a week so that shouldn't hold you back at all.
When you sign up, I'd recommend using an email address that is different from your Amazon.com or Amazon FBA email address if possible. You don't have to do this, but when I joined FBA and Merch I used the same email as my Amazon.com shopping account and it's been a pain in the butt. Amazon links all of the accounts together and it could make it easier for your competitors to track down your accounts later if they were really determined or if you slipped up and left a trail that connects your different accounts.
Merch By Amazon Tiers
After you've got your account approved, you'll be able to get to your dashboard which is where you'll manage your account.
The MBA dashboard is super minimalist and there aren't a lot of options. Amazon really only gives you 3 options in your account.
- Submit new designs.
- Edit existing designs.
- View your sales.
MBA has a tier system that restricts how many new designs you can have live at any time and how many new submissions you can create each day.
This is to stop spammers from setting up new accounts and uploading thousands of designs right away.
The Merch Tiers are named for how many designs you can have uploaded at any time. In order, the Merch tiers are:
- Tier 1 - 10 designs
- Tier 2 - 25 designs
- Tier 3 - 100 designs
- Tier 4 - 500 designs
- Tier 5 - 1,000 designs
- Tier 6 - 2,000 designs
- Tier 7 and beyond - A lot
When your account is first created you'll be at tier 1 which means you can only have 10 designs live. You'll also be restricted to 1 new submission per day. To move up from the 10 design tier you must sell 10 shirts. That will put you in the 25 design tier and will allow you to submit 2 or 3 designs per day.
Once you've sold a total of 25 shirts, you'll get bumped up to the 100 design tier and you'll be able to submit 10 new designs per day.
Each time you move up to a new tier, your sales from the old tier still count towards your progression. So when you sell 10 shirts and get up to tier 2, you only need to sell an additional 15 shirts for a total of 25 shirts sold to move past the 25 design tier.
In the beginning of your Merch career, your design slots are at a premium. If you have 10 crappy designs, you'll never get any sales and you'll never move up to the next tier. The key in the beginning is to get high quality designs at a low price point so you can move up tiers.
The real money in Merch is by having tons of designs available for sale. Most merch shirts will only get a couple of sales per week or less, so it's a numbers game that relies on flooding the Amazon search results with your shirts so that the odds of actually being found go up.
This gives a huge leg up to sellers who have been around for a long time and have 5,000 live designs. Even if you have awesome designs with an optimized listing, you'll still only have 10 designs available which means you'll have a hard time showing up in the search results.
How To Find Shirt Designs That Will Sell
Now that you've got an account created, you have to get your first designs created and listed for sale. If you're a creative person who has tons of ideas already, then go with those and see how they do.
For the rest of us, we'll rely on good ole competitor research and some nifty software tools to find out what's selling.
The only tool I've used and the only one I'd recommend for Merch is called Merch Informer. When you're starting out, you should sign up for Merch Informer and go through all of their tutorial videos. They teach you a lot of concepts like keyword research, competitor analysis, and listing optimization. These are all important parts of the puzzle if you want to figure out how to get your designs ranking well on Amazon.
Merch Informer has 4 different pricing tiers with the cheapest option costing $10 per month. This plan will work when you're getting started since it can access all of the data you need to find good keywords. The only thing that you unlock with the higher tiers is the ability to track historical data like keywords, trademarks, and products.
Merch Informer has a keyword research tool that lets you see all designs that show up for specific keywords or you can just browse designs in order of how many sales per month they are getting.
You probably don't want to target the same keyword as the #1 seller or even the top 1,000 sellers. A rough rule of thumb is that a t shirt with a best seller rank of 100,000 is selling a couple shirts per week. This is where I would recommend starting your search. If you can sell a couple shirts per week then you'll be doing pretty well for a new account and you'll be able to move up through the tiers quickly.
If you don't want to use Merch Informer, you can just search for keyword ideas and find the bestseller rank on the listing. Just go to Amazon.com, search for your keyword and go to the listing. About half way down the page you'll see the best seller info.
Make sure you only pay attention to the best seller rank in the top level category of Clothing. The other categories are more specific so the best sellers rank will look better than it really is.
Another way to find shirt designs is to use Google and Etsy. Just search for 'funny t shirts' or 't shirts for teachers', 't shirts for children', etc. Any possible combination of t-shirts for X will bring you to different websites that specialize in those designs. Almost every t shirt site will start by showing you their best selling products. These designs are a good place to start if you're looking for inspiration and don't have any ideas.
How To Create Your T Shirt Designs
The "best" way to create your shirts is to use Photoshop or Gimp. All Merch shirts must be 4500x5400px resolution. If they aren't this exact size, Amazon will give you an error message and tell you to fix the dimensions of your shirt.
Amazon provides a template that's the exact size you need to upload which makes it easy if you are familiar with Photoshop. I've only used Photoshop a handful of times and on a scale of 1-10 with 10 being an expert, I'd probably be a 2 or 3. I found Photoshop too difficult to use and I ended up using a website for all of my designs.
The site I used is called Merch Designer but it looks like it's been rolled into another site named Merch Dojo. I've never used Merch Dojo and it looks a little sketchy so I'd be careful before signing up.
You can even use Microsoft Paint if you want. Just make sure the resolution is 4500 pixels wide and 5400 pixels tall with a transparent background. For some simple designs this might work well enough but it's probably worth watching a few Youtube videos on Photoshop or Gimp and learning how to use them since they're much more powerful than Paint.
Another resource for creating shirts is to outsource the design work. Basically you would come up with the idea then you'd hire a freelancer to do the design work and give you a finished image file that you can upload without any work.
I've seen stories of people who have designers working for them at a cost of $4 per design once they're able to provide consistent work for their designer. If you're only doing a 1 off design I'd expect to pay a little bit more.
If you're going to be in this for the long term and you want someone you can rely on, I'd look at Upwork or OnlineJobs.ph to find a graphic designer.
For one off designs you can go to Fiverr and find an army of t shirt designers waiting to work for you. If you search for "merch by amazon" on Fiverr you'll see a ton of results. Just look for a seller who has good ratings and has designs that you like.
If you want to sign up for fiverr you can use this link which will give me a commission and help keep this site going at no cost to you.
I'd recommend not spending more than $25 on any designs when you're first starting out. After Amazon takes their cut, you won't make much money per shirt and as a beginner you have no idea what sells and what doesn't. You don't want to pay $100 per design only to find out your first 10 designs are flops. You can get quality shirts made for $5 a pop and that's enough to get you started and tiered up.
Merch By Amazon Commission Structure
Amazon charges a flat fee per shirt. The fee they charge depends on the style of shirt and whether or not you're printing on the front only or the front and the back.
Most shirts on Merch are t-shirts that only have a design on the front. For these style of shirts, here is what the commission structure looks like:
|Sale Price||Commission||Net Profit||Margin|
|$ 19.99||$ 14.61||$ 5.38||27%|
|$ 18.99||$ 14.36||$ 4.63||24%|
|$ 17.99||$ 14.12||$ 3.87||22%|
|$ 16.99||$ 13.88||$ 3.11||18%|
|$ 15.99||$ 13.63||$ 2.36||15%|
|$ 14.99||$ 13.39||$ 1.60||11%|
|$ 13.99||$ 13.14||$ 0.85||6%|
|$ 12.99||$ 12.90||$ 0.09||1%|
When you're first starting out your only goal is to tier up and get more designs. To get sales quickly you should use a lower price. I set my designs to $14.99 which is usually lower than other sellers.
Most people price their designs at $19.99 which nets you just over $5 per sale. A good strategy I've read about is to start at $14.99 and once you get a couple of sales you increase the price to $17.99 or $19.99.
You can test different price points and see how the sales are. Usually if the keyword your design targets is more competitive you'll have to set a lower price. If your designs are really unique and you don't have much competition then you can set a much higher price, even higher than $20 if the market will bear it.
How Much Money Can You Make With Merch By Amazon?
This question doesn't have a blanket answer. If you only have 10 designs on Amazon and they're moderate sellers (50k-100k BSR), then you'll probably only make $25-$50 per month.
If you get 2,000 designs live and you can get some of them in the top 10k or 1k BSR, it's possible to anywhere from $1k to $10k per month. The challenge is sustaining this level of revenue. As soon as your shirts start selling well you'll see a flood of competitors copying your designs and eating into your sales. The only thing you can do to combat this is to launch more t shirts and try to compete on volume.
Because of the competitive nature of Merch and the lack of control over listings and reviews, there is a cap to what you can earn with Merch. Based on the listings I found on Empire Flippers I'd say it's very rare to crack $5,000 per month in profit with Merch. It's possible to hit $1k-$5k if you're really dedicated and have a ton of designs, but you will probably never see anyone making $20k or $50k per month with Merch. There's just too much competition and too little control over the platform to really grow Merch into a huge business.
One of the methods people use to scale their business is to list their designs on other platforms. There are software tools available that will transfer your Merch listings to Etsy or other print on demand services which lets you tap into entirely new audiences that aren't searching for shirts on Amazon.
I wouldn't worry about branching out on to Etsy or other platforms until you're at the 500 tier or higher and you've hit your ceiling on Amazon. Your main focus should be unlocking higher tiers and making as many designs as possible on Amazon before you consider spreading your efforts.
Amazon is REALLY strict with copyrights and trademarks on the Merch platform. If you use even 1 word in your listing that is copyrighted you'll probably get rejected. I made a shirt about basketball and for the bullet points I said that this shirt is great for people who like the NBA and my design was rejected because I used a trademarked term (NBA).
I've read stories about people getting kicked off the platform for continually violating trademarks and copyrights but unless you're purposely doing it or repeatedly breaking the rules, you probably won't have any problems.
If you're not sure how to name your design or write your listing, your best bet is to look at your competitors. If you see them all using a term then you can be pretty sure that it's OK and you can use it in your listing.
Make sure you don't copy other designs exactly. Not only is it scummy but it's also not allowed. Amazon doesn't want their platform flooded with hundreds of identical designs since that would ruin the shopper experience. You have to change something with your design to make it unique and not violate any of Amazon's rules.
Merch By Amazon Wrap Up - Worthy Side Hustle Or Waste Of Time?
If you're looking for a side hustle that's easy to get into and if you have some design chops, Merch is definitely worth looking into. There are some big draw backs with the competitiveness of the platform and the race to the bottom it creates, but it's possible for the average Joe to start on Merch and get up to $500 per month in sales after just 6-8 weeks.
The best part of Merch is that you don't have to spend more time on it once you have your designs listed and selling. It's a truly passive side hustle that will continue to earn money even when you're not working on it. Of course, like any "passive" income, it requires significant up front time to get the designs created and if you don't pay attention to it you'll eventually see your sales dwindle and head towards 0. But compared to driving for Uber or a lot of other popular side hustles, Merch is much easier to scale and sell later on if you want.
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