Merch is one of the biggest money makers for bands, and with the right approach, you can start making money with your band even if you have a small following. The absolutely essential ingredient for merch that sells well is great design and merch that is designed for your audience.
If you just get a black t-shirt and print a white logo on it, people probably aren't going to want to buy it. You should think about the kinds of imagery that suit your band and the style of music you play, and use that imagery to apply as much artistic creativity to your merch designs as possible.
Certain design styles are more popular in some genres than others. You're more likely to see metal & grindcore bands using crazy metal barbed wire logos, and you'll often see electronic outfits with more minimalist and blocky designs. It's very important to understand your audience and the common design traits within the genre of music your band fits within. Look at what other bands in your genre are doing with their merch and see what is successful for them. It's a good idea to play it safe at the beginning, and stay within the design styles suitable to your genre of music, but don't be afraid to experiment once you know your audience!
If you are stuck for design ideas or none of your band mates are artists/designers, reach out to your fans to see if any of them are artists, or hire an artist on a freelancer marketplace such as PeoplePerHour. It's not hard to find somebody who can make you something that looks great, and investing the money in an artist who is happy for you to print their designs on your merchandise is absolutely worth it.
When it comes to deciding on the types of merch you are going to make, there are a few things to consider:
What types of merch do fans of your music typically like?
Next time you're playing live, look at the kinds of things people in your audience are wearing and have with them. Do they have band t-shirts or hoodies? Baseball caps? Bags? Badges? Have they sewn patches onto a jacket? You might think it's a great idea to make 200 bottle openers with your band's logo on them, but if your fans aren't the type of people who want to buy bottle openers then you could quite easily be wasting your money. T-shirts are the staple of band merch for a reason. People going to gigs expect a band to have a t-shirt; it's already ingrained that that's something they might want to buy if they like the band.
How much money does your typical fan have to spend?
It's no good selling a premium quality print on a long sleeve t-shirt for £25 if your average fan only has £5-£10 to spend on merch. If you are on a budget and you can't afford to manufacture lots of different types of merch, t-shirts are often a safe bet. But even if you are on a budget, don't skimp on quality. Spend the extra £1 per item to ensure that you get a high-quality print on a nice garment. There's nothing worse than spending £400 on t-shirts only to end up with a finished product that nobody wants to buy because the quality is poor.
What climate are you selling your merch in?
If you live in a predominantly cold climate, items like hoodies and hats are going to sell better than they will in warm climates. This is also a seasonal consideration. If you're getting merch ready for a summer tour, consider what the weather is typically like in the areas you are touring in. If you're coming from a cold climate and going to a warm one, don't expect all of your overseas fans to want to buy your hoodies when it's 32°C outside.
What sizes should you buy?
When you're buying clothing, the worst thing you can do is order 20 items in each size so that you've "covered all the options". It's likely you'll sell more M and L t-shirts than you will S and XXL, but this can change depending on your fanbase. If you're not sure what to buy, post on your social accounts asking people to comment with the size they'd want if they were to buy your merch. Come back a day later and collate all of the results in a spreadsheet. It'll be a boring hour of work, but you'll be much better informed, and you'll avoid situations where people are walking away from your merch table empty-handed because you've sold out of large t-shirts but still have 18 XXLs left.
What colours should you use?
Appeal to people's desire for variety and choice. Try multiple t-shirt designs or at least different colours. You can play it safe by getting black, grey, and white t-shirts, or you can be adventurous and try some reds, blues, and greens. Make sure your design works on these colours before buying - any good merch printer will send you a proof before you confirm the order.
How do you price?
Pricing is always a tough call. Again, it's a good idea to look at bands similar to you and see how they are pricing. It's often better to price slightly lower to encourage more people to buy. Having 5 people buy an £8 t-shirt is better than 1 person buying a £14 t-shirt. Bundles can also be very successful because of the perceived value. If you have multiple t-shirt designs for sale for £8, try selling two tees for £12-£15, or a tee and an album for £15. Don't be afraid to discount your items. As long as you still have a profit margin on your bundles, pricing them well can result in high volumes of sales.
Merch is a great world to get into as a band, but if you dismiss it and do the minimal amount of work to get a t-shirt printed, don't be surprised if they don't sell well. Apply some time and creativity and it could be the turning point for your band to be able to afford to go on tour!