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Why Investing in Merch is a Smart Business Decision

By Miriam Diiren — Ft. Sean Hindmarch & Nelson Ebbeck

In the world of business, making strategic decisions is crucial for long-term success and profitability. Among the myriad of marketing options available, one avenue stands out as a smart choice — investing in merchandise. 

In fact, 70% of brands consider promotional products mostly or always effective in achieving marketing goals (PPAI). From startups to established enterprises, incorporating merchandise into your business strategy can lead to a range of benefits. In this blog, we will explore why investing in merchandise is a smart financial business decision that can significantly boost your brand, revenue and customer loyalty.

Plus, we have two special guests from our very own Good Things Sales team, Sean Hindmarch and Nelson Ebbeck — speaking to us about the value in investing in merchandise. So let’s look at why investing in merchandise can benefit different areas of your business, from Marketing to Sales and even your Customer Relationship.


Why should I invest in merchandise?



We’ve said it before, and we’ll say it again — 83% of people remember a brand that they have received promotional products from (PPAI, 2017). So if your brand is selling or gifting merch then you have a higher chance of being remembered by your customers. Nelson, Sydney-based Senior Account Manager, adds to this saying;

“Investing in merch is a great way for a small business to enter the marketing space with low cost and high impact.”

Whether it’s a pen from an event or a GWP (Gift With Purchase) bottle opener from a brewery, you’d be surprised at how many promotional products people have in their home. So we recommend you start small — make a start to your merchandise catalogue, then after measuring success, you can gradually add to your merch collection.


The economic climate is tough right now — will investing in merch get me ROI?


Understandably, many companies have tightened their Marketing and spending budgets this financial year due to the economic environment. However, you can use this to your advantage. I spoke to Sean, Melbourne-based Group Account Manager, about why investing in merch in the current economical climate is a smart move;

“While everyone is tightening their budgets, now is a good time to create a GWP merch moment. They will be quite successful due to the common-consumer reducing their luxury spending budgets, therefore being gifted merchandise will make a higher impact on them.”

Being gifted promotional products can really make a “moment of delight” for those customers. Consumers are 2.5 times more likely to have a positive opinion of promotional products over online advertising (ASI Central). Sean tells us more about one of his recent client jobs; 

“Take Schnitz for example. They just launched their ‘Schnuggets’ chicken nuggets. We collaborated with them on creating a pet soft plush toy (with a squeaker) in the shape of the nuggets, it’s called ‘Schnuggles’. It’s been a hit! Even to the point where kids have been going into Schnitz restuarants asking if they have any more of the ‘schnuggles’ toys.”


This is just one of many examples as to how investing in merchandise now could lead to higher customer retention for your brand. Alternatively, your brand can take a more strategic approach to merchandise, Nelson explains;

“Merch is a proven marketing success, although with the current tightening of budgets, for some companies it is best to be more targeted and tactical with merch. Targeting specific retail areas or demographics instead of casting a wide net is the best way to get bang for your buck during these times.”


We’ve created a comprehensive list of 5 Marketing and Sales advantages that merchandise can provide your business. Let’s dive in.


How can merch improve my Marketing?


1. Merch makes free walking billboards

In the realm of marketing, investing in merchandise can be an astute financial move. Compared to traditional advertising channels, merchandise serves as a cost-effective marketing strategy that yields tangible results. When customers wear or use your branded merchandise, they effectively become walking billboards, promoting your business to a broader audience. 

About 53% of people use a promotional product at least once a week (Sage Blog). Comparatively, that’s like 1 in every 2 people wearing your branded tee or using your branded tote bag to the supermarket.This form of organic marketing can lead to increased brand visibility, customer engagement, and ultimately, higher sales conversion rates. 


2. Keep customers coming back to you

Merchandise can be an effective tool in building customer loyalty and retention. Offering exclusive merchandise to loyal customers or creating a loyalty program with rewards tied to merchandise purchases can incentivize repeat business. When customers feel appreciated and valued, they are more likely to stick with your brand and recommend it to their friends and family. We spoke to Nelson about how merchandise can create customers for life;

“Be it a small GWP in order to upsell to customers in store or online, or giveaways to spread your brand message to a new potential customers — as a former small business owner, you definitely can see the impact merch has once it is in the hands of a customer. It’s a low-cost effiecient way to get loyalty for life. Who doesn’t love free stuff?”


3. Longer lasting merch stock

Unlike some products that may have a limited shelf life, merchandise often offers a longer sales window, allowing for more effective inventory management. With proper planning, you can avoid overstocking and reduce carrying costs associated with excess inventory. This streamlined inventory management contributes to improved cash flow and frees up capital for other aspects of your business.



How can merch improve my Sales?


4. Low cost merch = high-profit margins

One of the most enticing aspects of investing in merchandise is the potential for high-profit margins. Unlike some products that may have slim margins due to production costs, merchandise can be produced at a reasonable cost and sold at a premium price. This financial advantage allows you to generate more revenue with each sale, ultimately contributing to increased profitability for your business.


5. Capitalising on trends and seasonal opportunities

Merchandise offers the flexibility to capitalize on trends and seasonal opportunities. Whether it’s creating special edition merchandise for holidays or designing products inspired by popular culture, staying attuned to trends can give your brand a fresh and relevant image. By being agile and responsive to what customers want, you can seize market opportunities and stay ahead of your competitors.



To sum it all up…


Together, Sean and Nelson summarised the 3 main benefits to investing in merchandise;

  • Low cost, high impact — merchandise has the potential to bring high-profit margins to your business. Merch can increase brand awareness at a controlled cost that is right for you, leading to more sustainable revenue and profits.
  • Brand Loyalty (and free advertising) — if you have the right product and a good-quality product a customer will keep this for life.
  • Inventory Management — you can control where your merch goes, how it is used and who it is seen by. As you physically control the stock you can make sure it gets in the hands of the people you want it in most.


Investing in merchandise is a smart business decision with numerous financial advantages. By incorporating branded products into your strategy, you can boost brand recognition, revenue streams, and customer loyalty. With a cost-effective marketing approach, merchandise serves as walking billboards which engages potential customers and increases brand visibility. In challenging economic times, merchandise can create memorable impacts and higher customer retention rates. But we understand that it can be difficult to know where to start when you want to invest in merchandise. So get in touch with one of our friendly team members (maybe even Sean or Nelson can help you out) and we’ll guide you in your merchandise journey.

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