Merch Buying & MOQs
Two Approaches to Purchasing Apparel Goods
When it comes to music merchandise, artists have two primary ways to purchase apparel goods. The first approach is wholesale buying of pre-made styles, often referred to as "blanks," in a range of colors and sizes. Wholesale pricing is specifically designed for artists buying in bulk with the intention to sell these goods at retail to end consumers. The more blanks an artist buys, the greater the savings per style. Once purchased, these blanks must be personalized, at an additional cost, with the artist's graphics or logo.
The second approach involves working with a design team that goes directly to an apparel manufacturer to fully produce styles on behalf of the artist. This method allows the artist to choose all the elements of a style—fabric, colors, details, trims, etc.—and includes all graphic printing, eliminating the need for additional work. These items are typically purchased FOB (Freight on Board), covering material costs, production costs, shipping costs, and any related duties or taxes. They do not carry any wholesale mark-up except what is pre-determined by the merchandise design partners. However, this approach usually requires minimum order quantities (MOQs).
Understanding Minimum Order Quantities (MOQs)
MOQs ensure that a manufacturer covers the costs of setting up their factory to produce the goods. Once an MOQ is reached—typically ranging from 250 to 600 units, depending on the style and fabrics—scale or volume pricing begins to apply. For instance, if an artist orders 1,000 units, the cost per item decreases, providing the artist and their design partners with additional profit margin.
It's important to note that MOQs are often misunderstood. Many believe that they must order a specific number of each style to reach the MOQ, but this is not usually the case. MOQs are typically related to the main fabric itself. For example, ordering 300 cotton tank tops and 300 cotton tees can collectively meet the MOQ if the primary fabric is the same.
Because the MOQ is tied to setting up a factory, reorders or replenishment within a given timeframe are seen as additional quantities. This means that with the right factory partner, replenishing fast-selling goods can be easy and lead to further savings. These savings, as volume grows, become additional profit margins, as final retail prices usually remain consistent within a selling period, such as a year-long tour.
Choosing the Right Approach for Music Artists
So, which option makes the most sense for music artists? For new artists or those selling merchandise for the first time, option one—wholesale buying—may be the best choice. It allows them to test the market with "tried and true" styles and order and print them relatively easily and domestically. There's no need for more than a graphic design team, and the mark-up from wholesale to retail is straightforward. Many companies facilitate this process, offering industry know-how and recommendations.
For well-established artists looking to grow and differentiate their merchandise, the second option provides a fully customized range of styles and more control over the production process, including replenishment. This approach can lead to savings by producing beyond MOQs. However, it requires a strong partnership with a design and manufacturing team, as it involves ongoing communication, strategic planning, and management, across a global supply chain. Aligning this process with the artist's vision, such as the development of an album and tour, can enhance the success of this approach.
Key Takeaways
Wholesale Buying: Ideal for new artists, allows for market testing with pre-made styles, involves simple personalization, and is easy to manage domestically.
Direct Manufacturing: Suitable for established artists, offers full customization, more control over production, and potential savings with larger orders.
Minimum Order Quantities (MOQs): Essential for covering manufacturing setup costs, tied to main fabric, and can lead to additional savings with volume pricing.
Partnerships: Crucial for successful direct manufacturing, requiring alignment with the artist's vision and ongoing strategic management.
Musique Mode is the first company offering full-service design and retailing for artists, providing not just a revenue source but an opportunity to grow their brand and engage fans across multiple channels. By understanding and leveraging MOQs, artists can make informed decisions about their merchandise strategies, ultimately enhancing their brand and profitability.
