Merch By Amazon Review Q1

2017 Q1 Review [Merch By Amazon vs. Redbubble vs. Teepublic] + 3 Big Lessons

Last Updated: April 10, 2017

Yes, the first quarter of 2017 is over already! yikes!

So it’s time for a review post.

Hold on to your hats.

Let’s Look At Those Numbers!

Here’s my month on month from Q4 2016 to Q1 2017:

Merch By Amazon Earnings Graph

As you can see I experienced a big drop from December to January.

Of course that was not unexpected – December is always going to be the biggest month in retail.

But that drop was a little harder than I had hoped, and I’ll get into why later.

Let’s look at the breakdown of this income:

Merch By Amazon Income Report

This shows my breakdown of total income in Q1 by channel.

Nothing much has changed here from last year – Merch By Amazon is still responsible for about 70% of this income.

Redbubble and Teepublic have actually held up really well – and by last month (March) were doing figures similar to what they were producing in July last year. Pretty, pretty good.

What You Can’t See

There are some channels and sources of income that aren’t included in these numbers – either because I couldn’t be bothered to track them, or because they are unrelated to my T-Shirt royalty income – so it doesn’t make sense to include them.

These include:

  • TeeSpring. I started uploading designs to TeeSpring in January, and they have been making some organic sales each month. I would guess that the total income is currently running at less than $500/month.
  • Other POD Sites. I have a number of accounts across other print-on-demand platforms that are not show here. But they don’t generate much more than a couple of hundred dollars a month put together.
  • Amazon Seller Central. I only have about 15 products on my Seller Central account, but it is pulling in a couple of sales a week. Again this is worth less than $500/month right now, if that.
  • My Shopify Store. If you’re subscribed to my newsletter, then you know that a lot of my time over the past few months has been spent on developing and growing my own Shopify store (with paid advertising via Instagram). This is currently profitable to the tune of a few thousand dollars a month, but is anything but passive (compared to the income displayed above), and requires multiple thousands a month on advertising to return that profit.

What About Expenses?

It’s always super annoying (and borderline evil) when people report revenues without listing expenses.

Typically (ie. last year) my royalty income from POD sites has been almost expense-free – because I never previously paid designers, and did everything myself.

But since January I have been employing a number of designers, and in total that’s costing about $1000/month.

Obviously that eats into profit somewhat (compared to last year) but I’m more than comfortable with the trade-off (and it seems to be paying off) because my inventory of designs is ballooning fast – my overall income is going up month to month – and all of those designs should continue to serve me for years to come.

Aside from the designers, I really don’t have any additional ongoing expenses that I didn’t have last year…just the usual software etc.

3 Big Lessons From Quarter One

So what have I learnt from the first quarter of 2017?

I’m so glad you asked!

1. Always Be Creating

I took my foot off the gas during Q4 2016 – and stopped producing designs like I had been doing through Q2/Q3 2016.

I think that if I had just maintained my output through the end of last year, January 2017 would not have been as big a drop as it was.

So the lesson is: never stop producing.

Any design is better than no design, and when you are a lower-level seller – you need every design you can get!

So don’t expect Amazon or anyone else to bring a ‘natural’ boost to your income over time. If anything you will probably see ‘churn’ rates increase as competition increases.

This means your output of new designs (that sell) must outweigh those old designs that are ceasing to sell (either because the competition is beating you, or because the customers just aren’t buying like they used to). That’s the only way to maintain growth in your income.

2. Be Willing To Change

I didn’t want to outsource designs, because – number 1 – it was just too much hassle. (having to deal with the back and forth, organising the briefs etc.)

I also liked being in complete control of my work. I didn’t like the idea of handing the job off to someone who would – in all likelihood – not do as good a job as me.

But good enough is good enough.

An incredible design will probably only sell slightly better than a ‘good enough’ design.

I’m not saying design quality isn’t important: but it’s much less important than idea, market, volume and optimisation.

There’s only one of my designers who I think is as good (actually, probably better) as an artist than me. But that doesn’t matter, because the designs they produce are certainly ‘good enough’ (and usually better than the competition) – and so there’s really no downside to having slightly-less-good designs.

If I was not willing to outsource the design process I believe my income in 2017 would already be way lower than it currently is.

I wouldn’t have been able to spend my time focusing on ideas and research, and I probably would have become increasingly frustrated at not being able to produce as many designs as I would like.

So don’t limit yourself and your income by refusing to change and to grow. Outsourcing is hard and time-consuming, but it’s the only way I would have been able to maintain growth.

3. Know Your Level

Last year I made it my business to chase trends.

This year, not so much.

Designing for trends made sense for where I was at last year – I had time to do daily research, to keep my ear to the ground and to chase away copycats.

But this year it really doesn’t make much sense for me to do those same activities.

Now that I have a design inventory of around 1000+ and growing, compared to say just 300-400 – my focus is on producing as many valuable evergreen designs as I can (designs that are not trend-related, but that should produce for months and years to come).

But it all depends what level you are at and what your goals are.

If you are happy and able to focus on trends (as I was last year) – and are happy with the return on that investment of time, then make that your focus, and go ‘all in’ on it.

If you think you are going to get a better return on your time by outsourcing designs and just focusing on volume (and you are prepared to manage that and pay the upfront costs for the designs) – then go ‘all in’ on that.

There’s no right or wrong here. We are all at different levels of income, and we all have different working situations and different commitments, and different goals.

  • Beginner. When you’re just starting out you are nimble. You have more time to do detailed research. You can alter your prices on a daily basis, depending on the competition. You can do daily searches for copycats and get them removed. You can charge higher prices because you know the markets you are playing in extremely well.
  • Intermediate. When you go to the next level you probably have less time to do the detailed research. You start to increase volume and focus less on the details. Maybe you start looking for whole ‘niches’ to design for, rather than single design concepts. You can’t alter prices daily depending on the competition, so you have a more general pricing structure.
  • Advanced. When you go to the next-next-level you have next-to-no time to do detailed research. You are almost completely focused on volume, and you stop caring about copycats. Your focus is on maintaining that growth, and maximising returns from what you already have. That may mean making bulk changes to pricing in order to test what impact that has on your bottom line.

Anyway I trust you get the point. Figure out what level you are at, and what level you should be heading to next (assuming you want to go to that next level – maybe you are perfectly happy with the income you get from T-Shirt designs right now, and have no reason to ‘up’ it).

Ok, that brings me to the end of this Q1 review. Hopefully you got some value from it!

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Published by Michael Essek