Merchandise Deals

Merchandise represents one of the most direct revenue streams for working musicians. Unlike streaming royalties, merchandise provides immediate income with meaningful profit margins. For independent and touring artists, merch revenue can fund recording projects, cover touring expenses, and provide cash flow between releases. A strong merchandise agreement can support your brand identity while generating sustainable income. A poorly structured deal, however, can limit creative control, reduce earnings, and create obligations that are difficult to exit.

Many artists focus on headline numbers like advances or revenue splits without considering how those splits are calculated, who controls designs, what quality standards apply, or what happens when the partnership ends. Understanding financial mechanics, creative control provisions, and termination terms, before signing, helps avoid common pitfalls and builds long-term merchandise revenue.

Structuring Revenue

Merchandise deals often propose revenue splits expressed as percentages. The key distinction is whether your share applies to gross or net revenue. Gross revenue is total sales before deductions, while net revenue subtracts costs like manufacturing, shipping, staff, venue fees, and payment processing fees or chargebacks. The difference can dramatically affect take-home income.

Agreements should clearly define which expenses are deductible and include reporting requirements. Negotiating caps on certain expenses can prevent deductions from significantly reducing your share. Understanding the structure before signing ensures realistic expectations of income from merchandise.

Touring and Online Merch Considerations

Touring adds financial and logistical complexity. Many venues require a portion of sales, and some mandate specific sellers or labor, adding fees that reduce net revenue. Payment timing is also critical, and some companies pay quickly, while others hold revenue for weeks. Your agreement should clearly outline payment schedules, advances, and settlement timelines.

Tour support provisions define operational tasks. Who staffs the merchandise table? Who transports the inventory? Who covers any rush orders or replenishments? Clear contract language prevents unexpected costs or lost sales during a tour.

Online merchandise sales are increasingly important for direct fan engagement. Contracts should specify who operates the online store, how revenue is split, and ownership of customer data. Fulfillment details like shipping standards, returns, and customer service should be defined to protect your reputation and maintain fan trust.

Who Controls the Brand and Designs

Merchandise reflects your brand and connection with fans. Some agreements give the company broad rights to create designs and use your name or likeness without approval. You should retain approval rights for all designs and product categories. Ownership of design files, including logos and artwork, should be clear to prevent loss of your creative assets if the partnership ends.

Product selection affects both revenue and brand consistency. Oversized product lines can lead to excess inventory, while minimal lines may not reflect your artistic identity. Input into selections balances commercial practicality with creative authenticity.

Manufacturing and Quality Control

Quality control affects fan satisfaction and your reputation. Agreements should specify production standards, sample approval processes, and who selects manufacturers. You should have the right to approve samples for color, fabric, sizing, and construction.

Defective merchandise provisions should define responsibility for unsellable goods and how fan returns are handled. Production timelines should be outlined to meet tour or release schedules. Clear standards prevent delays, financial losses, and damage to your brand.

Termination Clauses and Buyback Provisions

Termination clauses define how each party can exit the relationship and what happens to the remaining inventory. Performance clauses can allow early termination if standards are not met.

Post-termination obligations should clarify who owns inventory, customer data, and design files. Buyback provisions should be reasonable, limiting financial exposure by setting fair purchase prices or allowing sell-through periods. Inventory management during the relationship affects potential termination costs, so agreements should address production control and accountability.

A well-structured merchandise agreement balances fair revenue, creative control, quality standards, and clear exit strategies. With the right terms, merchandise can become a reliable income stream that strengthens your career. Hrbek Law reviews and negotiates merchandise contracts to protect artists’ rights, creative identity, and long-term financial goals. Contact us today if you need assistance with your merchandise contract.