What Is This Merch Thing On Amazon?
About a full year ago, Amazon made a very clever move that combines Amazon’s dominance as a large online retailer / advertising platform with its stake in the mobile gaming market. Amazon introduced a service called Merch by Amazon. Originally, it was aimed at helping app developers. The primary purpose was to increase the app developers revenue by selling branded t-shirts to their gaming customers. Amazon has since opened this platform up to other content creators, like myself, who happens to enjoy creating custom art with pen and paper that I can then turn into shirt designs using a program like Photoshop.
Developers and others can use the Merch service to create custom T-shirts that are advertised in their mobile applications or elsewhere online, then printed on demand. For each T-shirt a fan buys, the creator earns a royalty that increases with the number of shirts sold. Developers loved the Merch by Amazon concept because it offered a tool that eliminated out-of-pocket costs for developers who wanted to expand beyond traditional in-app advertising or in-app purchases.
Offering physical merchandise is something a number of game developers try to do. However, it often requires a large upfront investment. This is why the marketplace has seen merchandise from bigger brands, like the extensive collection of toys and games from Rovio’s Angry Birds franchise, merchandise from Plants vs. Zombies, or partnerships between gaming giants like Zynga and toy company Hasbro. Before Merch, we really didn’t see the same from independent developers.
To use Merch by Amazon, graphic designers upload custom designs to an Amazon’s online dashboard. Designs can be as simple as a logo or any form of custom art. Amazon even provides templates to get started. The content creators then set the price for the t-shirt using Amazon’s royalty calculator which lets the artist see what the royalty per shirt will be depending on the Prime price. Did I forget to mention that these are sold as Prime exclusive shirts? Yes! Merch designers get the benefit of the Amazon Prime brand. Countless consumer studies have proven the buyer confidence when buying from Amazon Prime. This benefit is worth it’s weight in GOLD and content creators get this for free!
Developers earn a royalty based on the list price they set, less Amazon’s costs, which was about $8.00 when the platform rolled out, and a small listing fee, which is 15% of the selling price. Amazon does requires that the minimum price cover its own expenses. Amazon calculates everything from stocking blank shirts, printing the shirts with artwork, customer service, shipping to the end consumer and “other” selling expenses into the $8 fee. Amazon will do a bulk order if you have a design with a large demand. Volume discounts can be seen here.
The shirts themselves can be made as either one or two-sided. Designers can specify the actual shirts that the designs can be printed on. Creators pick from either Anvil and American Apparel brands. The shirts are available on one Amazon product page in men’s (S-3XL), women’s (S-XL) and kid’s sizes (K4-K12). After the sale, the designs are printed by Amazon controlled print shops and then shipped to customers.
Amazon’s entry into the print-on-demand space challenges businesses like CustomInk, Spreadshirt, Teespring, Zazzle, CafePress and other services where users can design and sell T-shirts online. Some of the pioneers of Merch have a tremendous head start on their competition, these include Backflip Studios (DragonVale), Etermax (Trivia Crack), Big Blue Bubble (My Singing Monsters), ZeptoLab (Cut the Rope) and Glu Mobile (Deer Hunter 2014). The Merch by Amazon service is live here.