Merch cuts have become a contentious issue for musicians since the pandemic, with many feeling that they’re being taken advantage of. To shed some light on this topic, I spoke with KW Campol of Mythos Management, Vile Creature, and the Prepare The Ground festival. He shared his insights on merch cuts and introduced me to his merch cut calculator (which you can access and use for free right here), a tool designed to help bands get a fair deal.
What are merch cuts?
“Merch cuts have been a part of the industry for a long time, but they used to be limited to large shows. Now, they’re becoming more common at smaller venues. Essentially, a merch cut is when a venue takes a percentage of a band’s merchandise sales. For example, they might say, ‘we want 15% of your merch sales.’ This means that for every item sold, the venue gets 15% of the revenue.”
“The argument against merch cuts is that they’re unfair. Bands don’t ask for a cut of bar sales, so why should venues ask for a cut of merch sales? It’s like comparing apples and oranges. If you’re Taylor Swift playing at a stadium, it’s understandable that the venue might need to take a cut to cover their costs. But for smaller bands, merch sales are often their primary source of income.”
“As a band, your merch is how you make a living. It’s unfortunate, but it’s the truth. We’re not just artists; we’re also salespeople. And when venues take a cut of our merch sales, it can be devastating. For bands playing to smaller crowds, merch sales are crucial. If you’re a support band, your merch sales might be the only way you can make a living.”
What’s the difference between paying merch cuts on gross profits vs. net profits?
“When a contract says ‘15% of merch,’ it doesn’t always specify whether that’s gross or net profit. Gross revenue is the total amount of money you take in, but it doesn’t account for costs like taxes, production, and shipping. Net profit, on the other hand, is what’s left after you’ve covered all your expenses.”
“Let’s say you’re selling a shirt for $50. If you have to pay 13% tax, that’s $6.50 gone right there. Then you have to factor in the cost of the shirt itself, which might be $18. And if you’re paying someone to sell merch for you, that’s another expense. By the time you’ve covered all your costs, your net profit might be significantly lower than your gross revenue.”
“If you’re paying a 15% merch cut on gross revenue, that’s $7.50 per shirt. But if you’re paying it on net profits, it’s $3.45. That’s a huge difference. And it’s not just about the money; it’s about fairness. Venues shouldn’t be taking a cut of our merch sales without considering our costs.”
“I created the merch calculator to help bands navigate this issue. It’s a simple spreadsheet that calculates your net profits and helps you determine how much you owe the venue. I’ve used it with my own bands, and it’s been a game-changer.”
What is the merch cut calculator?
“I came up with the merch calculator after a venue tried to take a large cut of our merch sales. I realized that we needed a way to calculate our net profits quickly and accurately. The calculator does just that, and it’s available for anyone to use.”
“I believe in sharing knowledge and resources with the music community. We’re all in this together, and we should be working to help each other out. The merch calculator is my way of contributing to that effort.”
On sharing the knowledge of the merch calculator
“I think it’s essential to share knowledge and resources within the music community. We’re not in competition with each other; we’re all trying to make a living doing what we love. By sharing the merch calculator, I hope to help other bands avoid getting taken advantage of.”
“The calculator is particularly useful for smaller bands or support bands. Larger bands might have more resources and systems in place, but for those of us who are DIY or just starting out, it can be a lifesaver.”
On merch cuts and the differences between venues
“My view is that venues shouldn’t take a cut of our merch sales. They didn’t pay for the design, production, or shipping of our merch, so why should they get a percentage of the sales? It’s not fair to the bands, and it’s not sustainable.”
“Some venues are great, and they understand where we’re coming from. They might not take a merch cut or might be more flexible with their policies. But others can be strict, and that’s when the merch calculator comes in handy.”
“I’ve had conversations with venue staff, and they often agree that merch cuts are unfair. They’re just doing their job, but they understand our perspective. It’s not about being anti-venue; it’s about being pro-band and pro-fairness.”
On merch cuts destroying someone’s livelihood
“The music industry is set up to reward the top 3% of bands and punish the rest of us. For bands that aren’t part of that top tier, merch sales are crucial. If venues take a large cut of those sales, it can be devastating. It’s not just about the money; it’s about the ability to make a living doing what you love.”
“Merch cuts can take food out of people’s mouths and make it impossible for them to continue playing music. As a community, we should be working together to find solutions, not pitting ourselves against each other.”
“My advice to bands is to be aware of merch cuts and to negotiate fair deals. If a venue is taking a cut of your merch sales, make sure it’s a percentage of your net profits, not your gross revenue. And if you can, try to avoid selling merch outside the venue, as it can impact your sales and relationships with the venue.”
On selling merch outside the venue & keeping revenue streams separate
“Selling merch outside the venue might seem like a way to avoid merch cuts, but it’s not always the best solution. You’ll likely sell less merch, and you might damage your relationship with the venue. It’s better to work with the venue and negotiate a fair deal.”
“Venues and bands should keep their revenue streams separate. We’re not in competition with each other; we’re complementary. By working together and being fair, we can create a more sustainable and equitable music industry.”
“I want venues to survive, and I want bands to thrive. We’re all part of the same ecosystem, and we should be working together. The rise of merch cuts has created a contentious environment, but I believe we can find a way to make it work for everyone.”
On venue staff
“Venue staff are not the enemy. They’re often musicians themselves, and they understand our perspective. We’re all working towards the same goal: to create a great experience for the audience and to make a living doing what we love.”
“The industry has pitted us against each other, but we don’t have to buy into that. We can work together, share knowledge and resources, and create a more equitable music industry. It’s time for us to take control of our own destiny and make a change.”
