Merch by Amazon announced yesterday that they are reducing the amount of royalties a merchant collects per shirt due to an “increased cost to support merch” including raw materials, transportation, storage, fulfillment and ability to detect fraud. These effects will take place on January 15th, 2018.  On average it looks like the merch user can expect to gain about $2 less per shirt purchased. You can see a full overview of the pricing changes here.

 

A quick look at the pricing changes

Merch by Amazon adjusted royalty structure

That might not seem like a ton — but that can really add up over a year. For example, if you sell 300 shirts over the course of a year (a pretty easily obtainable goal) you are looking at $600 less in profits than you would have had before the pricing change. Yikes.

 

What does this mean for the future of Merch by Amazon?

As the Merch by Amazon platform expands, there are a ton of great new features they are adding. We wrote up a post about the long sleeve shirts they recently added. We’ve also heard they may be adding things like hats, hoodies, and mugs to their print on demand roster.  In the future the hope is to add even more novelty items such as throw pillows and more. There really is an endless opportunity of products that Amazon could sell on Merch if they wanted. Unfortunately the growth of the platform also has negative changes, such as over saturation, quality control, and now reduced profits. Like anything, there’s good and bad with growth.

 

Looking forward to the future.

Even though this information can be discouraging, my partner and I are both very excited about the growth we could have in the coming year. Royalty cuts could be offset by an increased number of sales or designs that you have live. Either way, Merch by Amazon is still an amazing platform to generate a passive stream of income with almost no maintenance work once you have done the initial work!

 

Let us know what you think in the comments below!