Royalties 💰 (Amazon Merch Tutorial 2020 #03)

[Music] hey guys Ryan here welcome back to part three of my Amazon Murch mini series in this video we are gonna cover the royalty calculation for each product type that you can currently sell through Amazon merge this is important thing to understand especially if you're new and this mini series is really geared toward those of you that are new to the platform and I know a bunch of you guys were just recently accepted I've been seeing a lot of posts in my Facebook group and I've been seeing people reaching out to me via email thanks for that drop a comment by the way if you didn't let me know that you were recently accepted let me know in the comments of this video but this is important stuff that we are going to have to cover as we get better at Amazon merch as we learn the ropes and begin to sell more and more shirts alright first thing before we start I'm Ryan Hogue I've sold over 1.6 million dollars on Amazon and if you want to follow the links in the description I've got a free seven-day mini course that I deliver via email if you'd like to sign up for that I've got a Facebook community dedicated to helping each other through Amazon merch learning the ropes you can check that out too linked in the description I published income reports each month on the first or second day of the month if you want to follow my progress as an Amazon merch seller currently into your twenty thousand and I wrote a 50-something lecture full-blown Amazon merch course if you really want to know exactly how I approached it and it's not like a one-size-fits-all thing it's really based on your tier what tier your inter name is on merch dictates a lot so if you want to know my exact strategy to hit the fast-forward button and really start making the big bucks as quickly as possible there's a link in the description there as well alright back to the reason we're here we're gonna talk Realty calculations and specifically guys just to let you know there is a there's a page let me show you really quickly there's a page on Amazon merch if you log into your account there's like a resources tab up here near the top next to where it says my account and underneath the resources there's a lot of really good info that everybody needs to be acquainted with like you need to be familiar with this because Amazon doesn't really play around if you break the rules they will you know they're pretty quick to kick you off the platform they're quicker than Etsy is to kick you off the platform he's pretty quick so I'm gonna dedicate the next few videos just to showing you the ropes per Amazon merge policies that they specify here in the resources section but if you don't like watching the videos and you prefer to read on your own go ahead and do that otherwise you know I like I know myself I like to watch videos rather than read so this is basically what I'm gonna be doing for you so in this video we're talking royalties and I'm just gonna read you the introductory paragraph then I'm gonna expand a little bit based on my personal experience alright royalties you earn a royalty on every product sold your royalties based on your products purchase price less any applicable tax and less Amazon's costs Amazon costs include materials production fulfillment customer service returns exchanges and resources required to detect and prevent fraud so I mean Amazon's doing all that for us all were really doing is uploading designs and providing you know a title and some bullets so it is a pretty good deal fulfillment costs including picking and packing your product when a customer orders it and shipping your product to the customer including shipping for Amazon Prime and free shipping for eligible orders for the US the purchase price includes taxes that are calculated and added at checkout the below calculation example does not include those for the EU the purchase price displayed on the product detail page and in the below calculation example is already inclusive of taxes all right I'm gonna walk you through this is gonna be geared towards selling in the US by the way because that is the primary market and you know a key rule of selling anything ecommerce or in real life is follow the customers at least I'm a strong believer in that so I really think you should focus your efforts on the US market however just making a note of this publishing to the US is currently paused so you can't actually push a new product to the US market so for those of you guys that are new sellers watching this video trying to upload today to the US market it's not gonna let you it'll only let you save as a draft but whenever that resumes you can publish all the drafts until then though there's no harm done in uploading to you know code code at UK or dot de you know United Kingdom in Germany the German market is bigger by the way so maybe you lean towards that to get your first products up and get your first sales alright so jumping into things the standard t-shirt this is the most commonly sold product through Amazon merch and this is the royalty examples that Amazon merch shows us when you go through there through the resources page and actually what I wanted to really quickly are you know what though let's go back here alright so the purchase prices that they recommend here range from $15.99 $17.99 $19.99 $21.99 $23.99 and $25.99 it should be stated I don't know why they don't make this clear that the current lowest price you can sell a t-shirt for standard t-shirt for three Amazon merch is thirteen dollars and seven cents alright that is the lowest that is the official base cost of this product so if you sell at 1307 and someone a customer is searching for a t-shirt and they sort on Amazon by price low to high it's gonna be all of the non Amazon merch shirts that are in that niche that they searched for that are lower than 1307 and then it's gonna be you and if there's no you know we would call that FBM if there's no fbm listings meaning like non Amazon merch then you are eligible to rank at the top of the search results for that niche when customers search by price load too high so that's just something that you should consider especially as a new seller you can defer profitability and price your shirts at 1307 where you won't get any money paid out to you you will not collect a royalty but then you can focus on tearing up alright that's a concept that's worth considering because obviously like me being into your twenty thousand and having twenty thousand upload slots who's gonna sell more shirts you know me or you with ten upload slots so this you want you want to really focus on tearing up first but that's we'll talk more about that in another video I just wanted to make that clear like Amazon didn't go below $15.99 on the royalty chart but you can price lower than this alright and then also I'll mention this again at the end but you have the ability with some products like the standard t-shirt to put designs on the back as well that will increase your base cost and cut to your royalties so that should be stated but for now at $15.99 you'll make a royalty of $2 and 21 cents that may not seem like a lot guys but at scale since this is completely scalable if you sell one t-shirt in a day it is the exact same from your end in my end if we sell one share today versus if we sell a thousand today or 10,000 today we do the same amount of work right which is nothing because Amazon's doing all the work for us so if you can sell at $15.99 make $2 21 centruy 'el tea per sale and increase your sales by not having too high of a price that should also be considered as a strategy and again we'll talk more in depth about this stuff but it's also stuff I cover in depth in my course and then also just worth mentioning I'm not gonna focus again on UK and de but your base cost and your royal tea structures are going to vary in the UK market and the German market alright long-sleeve shirts the lowest cost that they give us a royalty chart for is 20 dollars 99 cents for long sleeve shirts at a $2 37 cent royalty all the way through $25.99 where you'll generate a five-dollar 96 cent royalty one thing I should have mentioned is that the waive royalties work it's not like a flat rate it's not just like okay 1307 is the base cost and everything above that you just get paid out like a subtraction it's not like that they take a percentage so if you sell a shirt for $1000 like they're gonna get a percentage of the profits they're not just gonna give you a flat rate after the 1307 so that's why it if you're actually doing the math and looking at each of these price points it's it's I just realized I'm blocking two of the prices but that's okay I don't think you should be charging most likely $25.99 or yet $25.99 in standard shirts and $25.99 on long sleeve you're typically gonna stay in the lower end of the range all right pullover hoodies if you sell it at $29.99 you get a three dollar 50-cent royalty I think that's pretty much the sweet spot you can go you know when you when you upload products initially by the way you can start with a really low price to try to entice customers to buy and then following a sale you can slowly and gradually increase the price alright that's another good strategy again we'll talk more about that later but worth considering at $31.99 you can make a royalty of five dollars and one cent one thing worth noting about hoodies is that they used to cost more and Amazon reduced the base cost alright and this is what I wanted to mention earlier before I forgot but standard t-shirts used to cost less and then Amazon increased the base cost so at $19.99 where today we get a five dollar twenty three cent royalty paid to us we used to get seven dollars and 19 cents paid to us so when I had like my most successful single day as a merged seller where I made what was it it was like seven hundred dollars in a single day it might have been like 695 or I think I got a screenshot of 695 but it ended up being over 700 but I did all that in profit in one day on merch but I was also making seven dollars 19 cents and then every year in January merch seems to revisit the base costs and sometimes they'll increase them this year we got lucky they didn't increase the base cost on us so hoodies $29.99 probably the sweet spot three dollar fifty seven cent royalty per sale zip hoodie again I think $29.99 is a good sweet spot for selling the zip hoodies at and you get a $2.00 $0.26 royalty again think about this from the customer perspective and the pricing psychology perspective understand two things two main things the lower your price is the more visibility you're gonna get from the smarter customers that search and or that sort their search results from low to high and number two pricing psychology understand that if you polled a thousand people and said do you want to buy a hoodie for $29.99 or $30 you've changed it by an insignificant amount you've changed it by one penny but which one do you think will convert at a higher rate of course $29.99 because the left digit the digit to the left of the decimal has decreased and that's always to your benefit all right sweatshirts I don't sell many of these I wouldn't recommend uploading to these unless you've got like a really popular design but at $27.99 you'll make a royalty of two dollars and 12 cents tank tops these sell like crazy over the summer and it is currently fifth so great time to be listening tank tops if only we could list them hopefully we get publishing resumed soon but $17.99 for a tank top you'll make a $2 7 cent royalty v-neck shirts I believe this is in women fit type only be cool if they got in men's v-necks eventually but currently still not a thing at $17.99 you'll make a royalty of 2 dollars and 10 cents Raglan shirts so at 20 $1.99 you'll make a royalty of 2 dollars and 36 cents one thing about these is it's like a light gray or white and Amazon merch I'm pretty sure states out right that darker colored t-shirts like the t-shirt itself is dark color which means your design is really optimized to contrast well so it would be like a lighter color they tend to sell better and all of these Raglan's are pretty much like light background shirts so you need like a dark optimized design so I don't sell a ton of Raglan you can still upload a design that's optimized for dark background on them but it doesn't look that great so in my opinion you do have to go a little bit extra effort optimize your design to look good against a lighter background and then upload it to all those colors across the board all right pops Aki grips at $13.99 you make a royalty of a dollar 56 cents the sweet spot here for me probably start low and then increase to around $14.99 I haven't made any sales for I don't think I'm greater than $14.99 in my Amazon merch selling career as far as pop sockets go by the way if you're new to merch pop sockets are super easy to design for if you don't think you have design chops I've done a video on my youtube channel showing you how easily you can design them by just pulling like open source photos and just cropping them and putting them on a pop socket but maybe I'll do another video about that as part of the mini series all right and again like I said I was gonna come back to this but there are some additional costs this is rare this is only if you choose to but you can sometimes do two-sided printing it's gonna caught that means printing on the back side as well as the front typically you just print on the front but if you print on the back as well you're gonna have an increase in $4 of the cost or $2 96 pound sterling or $3 $0.33 euro and if you use premium brand shirts which I didn't even mention because almost nobody sells premium shirts when you upload to merch by default they don't even say I've got this pulled up right here by default when you are uploading to merch Premium won't even be checked so it'll look like this basically everything but premium so I don't think they even like you selling premium and also you can't use the word premium in your keywords so again be very careful careful there next week we'll talk more about the content strategy so in part four we're gonna go back to the resources page go through the content policies might be a little boring but it is extremely valuable information because if you lose your account you make zero dollars if you keep your account sky's the limit so that's what we're gonna talk about next time guys thank you for watching till the end if you found the video helpful do me a favor all I ask hit the like button tell YouTube that this video helped you in some way so that they showed some more people and if you haven't already hit that subscribe button if you want to be notified the next time I drop a video in part of this mini Amazon merge series hit the little bell icon that pops up next to it thank you guys I'll see you the next one [Music] you [Music] [Applause] 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