Amazon Merch is such a great opportunity to make money while you sleep. Upload a first designs a day, and before you know it you'll have an expansive offering of shirts for sale on the world's biggest eCommerce website.
But how much should we be charging for shirts?
Amazon takes so much of the work out of it for their sellers, that we can be burdened by making even the smallest decisions, such as how much should we be charging for t-shirts?
In this article I'll go over pricing strategies for 2019, after the most recent hit to seller royalty payouts.
Amazon Merch Royalty 2019
Beginning yesterday (as of writing this), January 30, 2019 Amazon / Jeff Bezos vacuumed up even more profit per order placed through the Merch platform "in order to account for increases in our manufacturing costs" (+ divorce is expensive).
Jeff's personal life aside, you can always view the live royalty settings on the official royalties resource page.
Just from this chart alone we can take away a few things... they're assisting us in providing "suggested" purchase prices:
- $15.99 ($2.21 royalty)
- $17.99 ($3.72 royalty)
- $19.99 ($5.23 royalty)
- $21.99 ($6.74 royalty)
- $23.99 ($8.25 royalty)
- $25.99 ($9.77 royalty)
We all know Amazon shoppers LOVE a discount, so it's going to be harder and harder to convince them to spend over $19.99 on a t-shirt in my opinion.
That said, I of course love running experiments, and have been able to support a $24.99 price point on a specific t-shirt design over the past 2 months (& 1x sale of a hoodie at $44.99):
| Sales | Revenue | Royalty |
|---|---|---|
| 4 | $99.96 | $36.64 |
| 4 | $124.95 | $36.64 |
| 1 | $44.99 | $8.33 |
| 1 | $24.99 | $9.16 |
Ultimately I don't think it's the best strategy. Personally, I'm more a fan of tailoring your pricing strategy to your tier.
Merch Pricing Strategy By Tier
Unless you're selling a hot trending shirt that you're confident you are first to market with, you should likely be pricing your products based on your upload tier.
I'm in tier 8,000 and treat my uploads very differently today than I did back when I was climbing the ranks.
Here are my high-level thoughts on how I'd approach pricing by tier:
Tier 10
Target Price: $13.07
Your price should reflect your goal of getting out of the 10-tier as quickly as possible.
Low prices attract more buyers - it's a matter of fact. Do like Jeff Bezos did and delay profitability for the time being while you scale your business.
This is the closest you can get to giving away the shirts for free. Amazon Prime members get free 2-day shipping as well... so as long as your designs aren't really bad & aren't buried beyond the first page, you should stand a chance at getting sales.
Tier 25
Target Price: $13.99
25 max uploads is enough to put 25 high quality designs on Amazon, but given the fact that they let you upload to shirts, premium t-shirts, long sleeve shirt, hoodies, and pop sockets... I'd much rather have more "cushion" to upload a single design onto multiple products.
Upping your price to $13.99 could even increase your conversion rate, as studies have shown that ending your price in ".99" can lead to more sales.
Tier 100
Target Price: $14.99
Congrats on making it to the 100 tier, it's time to make some money... just not too much (yet).
$14.99 is a wholesome number that customers are used to seeing, and your designs should easily support this price point. Targeting niches that get you visibility (not buried on page 2+) is a different story.
Tier 500
Target Price: $14.99
No, that's not a mistake. I think you should keep your pricing around $14.99 until you get your largest "double up" to date - the tier up from 500 to 1,000.
Tier 1,000
Target Price: $16.97
This is just personal preference, but I'm more a fan of "$16.97" than I am of "$16.99". either way, increase your left-digit by +2 for the first time, and enjoy that additional
Tier 2,000
Target Price: $16.97
This is where I believe you should shift your strategy to a more dynamic one... set a starting-out price point of $16.97 to entice buyers, and follow the first sale, feel free to increase the price to $17.99.
Any time you increase a t-shirt's price, monitor its sales volume over time and decide for yourself if it can support that price point - if not, reset the price accordingly. Remember, no sales = no money.
Tier 4,000
Target Price: $17.99
$17.99 is probably my favorite price point for Amazon Merch shirts. I don't know exactly why... it just feel like a really fair price.
I remember back in the day when a sale at $17.99 would net you over $5 in royalties. I look back on those times as the good ol' days of Amazon Merch.
For now, I think it's fair to target a $16.97-$17.99 price range with your basic shirts, and reserve $19.99 for your best sellers.
Tier 8,000
Target Price: $19.99
Once you're in the 8,000+ tiers you can pretty much do what you want with your uploads. Unless you're treating Merch like a full-time job, chances are you're not able to design, upload, & sell even 4,000 unique designs.
This is important to note because per the Amazon Merch FAQ, if something doesn't sell in the first 180 days, it will be removed. Our uploads used to only get 90 days... so I'll gladly take 180.
Either way, I think of this as the "re-upload" tier where you can set reminders every few months to re-upload you entire catalog.
I've been doing this and seeing great results... keeping in mind how saturated Amazon's t-shirt market is, you can have the same shirt uploaded 3 times at 3 different prices, and guess which one will sell -
Not the cheapest one.... not the most expensive one... not even the mid-priced one... the one that will sell will be the one that Amazon decides the customer sees first, regardless of price.
Their search ranking algorithm is proprietary & while we do understand a decent amount about it, I believe that their handling of MASSIVE saturation in categories like clothing is a bit different.
The best sellers will always hold onto the top spots in search results, but you can't bank on ever locking down one of those spots in a competitive niche (while operating at a profit). So I believe the next best thing is to re-upload every so often and occupy more internet real estate!
You can read more about my multi-upload strategy in my article: how I made $700 royalties in one day on Amazon Merch.
Pricing Psychology
I'd be remiss not to mention the importance of pricing psychology.
I also need to be up front about the fact that I have little to no formal training here... so I'd much rather leave it to the experts & endorse someone I'm a big fan of:
Nick Kolenda researches perception and behavior, and has a very effective way of communication complex information on his website.
His pricing psychology article is nearly 10,000 words of pure gold, & I'd consider it a must read.
Here's a snippet regarding what he considers to be the most important tactic in determining how to price your products: reducing the left digit by one.
The dataset above is sourced from Gumroad and easily illustrates how shaving a single penny off of a sale price (i.e. $14 to $13.99) can lead to a marginal increase in conversion rate!
I strongly recommend doing your best to read the entire thing, it will pay dividends down the road as you expand your Amazon Merch catalog of offerings.
