Hey you!
My name is Thomas “TomSka” Ridgewell and welcome back to YouTube Money, the series
where I’m trying to answer the big questions of “how to make money on youtube” and
“just how much money can be made”.
Today I’m gonna be focussing on merchandising or, more specifically,
making money directly from your audience.
So first, let’s talk about merchandise - official
products you can buy from a YouTuber to support them.
There are many different types of merchandise including: clothing, accessories, posters,
books, art, toys, media, beauty products, collectibles, and…
Mugs? Probably.
But where does this merchandise come from?
Well, first it needs to be designed.
This can either be directly by the YouTuber themselves, someone they’ve commissioned,
or a fan they’ve stolen the idea from.
A lot of the time though, the product’s design and manufacturing will be taken care
of by the people also selling and distributing it.
But who are they?
Well once the merchandise has been designed it needs to be made and sold.
And the way most YouTubers go about this is the low-risk/low-profit option.
Basically, a company will cover the cost to make all the merch, sell all the merch, and
ship it off to the customers with no expense to the YouTuber.
But, in exchange, the YouTuber will only be given a fraction of the profits.
The company keeps the rest of it for themselves as a fee of sorts.
The other approach however is the high-risk/high-profit option.
Here, the YouTuber will cover the cost to have the merchandise made and then either sell
directly to customers or to a retailer.
The reason to do this is because the profit margins are way higher but you also run the
risk of being massively out-of-pocket if the merch doesn’t sell.
Let’s take my Mine Turtle plushies for example.
If I order 2,500 plushies, the factory charges me £3.50 to make each turtle.
With shipping and storage, that rounds out to a total of around £10,000.
I then take those plushies and either sell them by hand at conventions for £12 each
or to a retailer for £8.
All said and done, an investment of £10,000 turns into around £25,000, £15,000 of that
being profit.
That is, of course, if we sell everything.
Please buy them, I have so many.
Now the last thing worth noting on the high-risk option is profit margins and bulk ordering.
Basically, the more you merch you have made, the less it costs to make each individual
item.
For example, if I order 1,000 posters to be printed, I’ll get charged around £1 for
each poster.
However, if I order 2000, I only get charged 80p per poster.
So, if I sell the poster for £5, that’s either a £4 profit or a £4.20 profit each poster.
Basically, the more money you spend, the more money you risk making
But also the more money you risk having spent for nothing if you don't sell the merch.
Basically, you gotta spend money to make money.
And also risk losing all your money.
So I've talked about how merch gets made and sold, but what merchandise actually sells
the best?
Well, the biggest sellers are always t-shirts, posters, and wristbands.
But what gets put on those depends on the type of content the YouTuber makes and their
relationship with their audience - specifically, what people actually like the most about them
and their channel.
However, they can’t go wrong with a catchphrase or encapsulating a popular moment from their
work.
Only if their audience’s primary interest is the You Tuber as a person can they get
away with selling their name or face on something; be it a t-shirt, a poster,
or a book they didn’t even write.
(airhorn)
Gah! That was a lot louder than I thought it was going to be!
Okay, so that covers merchandise.
But, despite the title of this video, that’s not the only way to make money directly from
your audience.
There’re also donation or “tipping” services such as Patreon where people can
give YouTubers money just to support them.
On Patreon, for example, people choose to donate a certain amount per video, or per
month just… Because.
For love! I guess.
Other fundraising platforms include Kickstarter or IndieGoGo where audiences donate money
to help fund a project, usually in return for exclusive content, merchandise, or just
the warm fuzzy feeling that get from supporting their favourite creator.
But while these donations usually come with a promise of a product or a perk, they’re
still just donations. Voluntary donations.
Not a legally binding purchase. So you could wind up with nothing.
For any creator, fundraisers are sort of a unsure-risk/unsure-profit kinda deal.
It’s also important for creators to budget carefully because once they’ve received
the amount they requested, they’re obliged - ethically, not legally - to create what
they promised.
I myself massively under-budgeted my first fundraiser and had to personally match the
amount raised just to deliver what I’d promised.
So be careful.
So that’s pretty much everything I think you need to know about money making on YouTube.
Obviously there’s an endless amount of variables and exceptions but those are the basics.
Whether you’re watching this series as a YouTuber looking to make some cash, or as
an audience member just trying to make sense of the industry, I hope I’ve helped clear
some things up.
Thank you for watching and I’ll see you next time.
TomSka out.