Creating brand merchandise can strengthen customer loyalty and enlist fans to spread your name—"but you don't want to make just another oversized T-shirt.
Reddit's extensive online shop grew out of a first fight co-creators Alexis Ohanian and Steve Huffman had after securing their first $70,000 in angel funding. Ohanian wanted to invest some of the money in merchandise to sell on the website; Huffman was skeptical. Ohanian got him to agree to a small run that cost a few thousand dollars, hoping to break even at worst.
"Fortunately, they ended up selling out in first 24 hours," he says. "There was just a hunger. Particularly because we weren't abusing [our readers] with advertising, they were looking for ways to support us, and this was a great way."
Reddit, a site that curates links from all corners of the Internet, has a rabid fan base. The most fervent of those fans go to the store and buy one of a many items with the alien mascot on it, including soap, golf shirts, and baby onesies.
Creating brand merchandise is a great way to create new loyalties with your customers and enlist them to spread your name to new audiences. But you have to do it in a way that creates viral sensations, not just oversized promotional T-shirts that end up at the bottom of someone's closet.
Purveyors of some of the hottest brand merchandise around offer these simple tips to follow.
Getting Started in Making Merch: Begin With Baby Steps
Ohanian used his success with Reddit to go on to create more promotional material for his other projects, Breadpig and flight search engine Hipmunk. He learned the key is to test the waters a bit before you invest in a bunch of swag with your logo on it.
"It's not something you do until you've got some funding, got some traction," he says.
When Ohanian worked to publish a collection of web comics by XKCD, he kept the first run limited to a few thousand copies so the initial expense was manageable.
"Know there's some demand out there before you fill your home with a lot of books," he says.
Near Charleston, South Carolina, Firefly Distillery—which makes the popular Sweet Tea Vodka and other southern-flavor-infused beverages—was just getting the business going when it first printed shirts with the logo.
But co-owner Scott Newitt says the company treated the items as free promotional material at drink nights and bar events. The company didn't start selling them until they opened a tasting room the following year. By then, the vodka was already a smash hit, ubiquitous at bars, stores, weddings, and other events throughout the South. The offerings grew to include more apparel, beer cozies, hats, visors, belt buckles, signs, and more.
When the distillery was starting, they used local vendors so they could buy in small increments and keep an eye on cash flow as they built a fan base.
"They're billboards walking around, which is great," he says. "The beer companies have done it forever."
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Be Creative When Considering What Products are a Good Fit
Ohanian says that if you're passionate about your company, you're in luck.
"The nice thing with Reddit and each thing I've been working on: the target market is also me," he says. "If I can make something I think I will want, presumably other people will like it too."
For Reddit users, that means USB flash drives and posters of inside jokes from the site. For the simple interface site that is Hipmunk, that means putting the company's cute aviator critter on basic T-shirts.
Newitt knows that the fans of his vodka are typically Southerners in the 21 to 29 year old range, and those are the kinds of people who are frequently spotted donning visors, polo shirts, and large belt buckles.
"It's really geared toward my demographic," he says. "That's really why we did it. It's great branding when someone sees that shirt somewhere at a concert or whenever."
Dig Deeper: Ordering Shirts Online
Stay Focused on Quality
The excitement of being at a sporting event and catching a rolled up T-shirt as it's shot out of a cheerleader's cannon is immediately deadened when you realize the shirt is two sizes too big, an ugly shade of white, and packed with as many logos as a NASCAR driver. Creating boring merchandise is a good way to ensure your logo won't be worn anywhere outside of desperate laundry day.
Experts say instead to focus on products people will actually wear and use. Atlanta-based e-mail service MailChimp has seen its shirts become a hot commodity due to an attractive design incorporating the company's monkey mailman mascot on soft American Apparel tees.
"We try to make it the shirts that people actually enjoy wearing. It's not just a cheap shirt with our logo on it," says Mark DiCristina, the company's brand manager. "People really love them and wear them all the time. It's not like people would feel like they're wearing a big Coca-Cola logo."
Firefly and Hipmunk also print on American Apparel tees. The shirts cost more than run-of-the-mill fabric, but they say the high-quality cotton and fit are worth the extra expense.
Ohanian does most of his designing in-house and works with a production team over the phone or via e-mail for his simple products, such as the Hipmunk luggage tags that were produced in China. But he says if you've got something more complicated in the works, it's worth a plane ride to sit face to face with the overseas team.
"You could half-ass it. You won't pay a lot for it of course, and you'll get very poor quality," he says. "It definitely takes a lot of time to know what you're getting into."
For another product—magnetic poetry of lolcats speak that was sold on Breadpig—Ohanian was able to easily find a skilled person to make them quickly and easily by doing simple online research.
"If you're willing to do a little bit of work, you can figure out how to make just about anything," he says. "Its really just a matter of tracking down a matter of who can get it done."
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Consider Your Merchandise Advertising, Not Revenue
No matter how good your brand merchandise is, experts say you shouldn't expect it to become a significant part of your company's profits.
For all its success selling T-shirts and other sweet-tea vodka paraphernalia, Firefly merchandise only accounts for about half a percent of total sails, Newitt says.
"It’s a great way, if you're a new brand, to get your product going," he says. "I always look at it as advertising. If I can break even on it, I'm happy."
MailChimp doesn't even sell its shirts, limiting them only to just promotional events and customer rewards.
But the company goes even further: they created an app that let customers sign up for the batches of T-shirts as they get released. Through the app, they have the option to subscribe to the newsletter to learn about future promotions and company news.
"It just created a kind of cool little experience we could give people," DiCristina says. "It was a way for us to capture people who were interested in knowing more about MailChimp and giving them the opportunity to know more about it."
Ohanian says when you're making high-quality products, your product margins won't be very big, but the potential for viral advertising pays off.
"In a lot of ways, we're benefited by the fact that people just want to support us," he says. "If there's a cool and interesting way to do so by buying a cool and tangible thing, they'll buy that."
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Don't be Invasive
To find the Hipmunk merchandise, you have to notice the small "store" at the bottom of the mostly plain home page. The company relies on other means to promote its merchandise, including Facebook photos of customers snapping pictures with their Hipmunk luggage tags around the world.
"We won't ruin the actual search experience with advertising," he says. "It'll all be fairly non-invasive promotion of it."
Certain Firefly brand items are exclusively available only to people who visit the South Carolina distillery, which encourages some 20,000 people a year to visit.
Ohanian's Breadpig offered limited-edition shirts available only for a short time, which boosted sales in bursts, and help keep costs down by limiting the number he had to order.
Once you pique their interest in your company and its cool merchandise, it's sometimes easy to make the sale.
"It’s a wonderful captive audience, you've already convinced them they want to buy it," he says. "You just need to show them the link."
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