In our last column, we tackled some of the basics of recording revenue and expenses. Our ultimate goal in tracking all of this information is to begin to use budgeting for both cash flow management and inventory management to help your band better plan for tours, and have an accurate picture of your band’s finances. In this column, we’ll be talking about inventory management specifically.
Quantities to order:
A common issue bands seem to encounter is deciding how much merch to order/make. From t-shirts, to CD’s and LP’s, bands seem to have a (somewhat understandable) preoccupation with keeping unit costs low. It makes sense right? The less you pay per unit, the more money you make per unit. The trouble is, ordering higher quantities that ultimately don’t sell is that money that could be in your pocket instead sits on a shelf in your basement! In today’s music environment, small runs to test the waters seem to be the best way of minimizing mistakes and avoiding excessive amounts of merch tied up in inventory. The quicker inventory turns over, the faster you’ll have cash back in your pocket.
It isn’t always possible to quickly and easily do small runs of product in order to test the waters. For example, given the extremely long production time for vinyl (wait times being as long as 6 months or more) a balance must be struck between staying lean and adequately planning for future sales. When you’re manufacturing all of your own product (in the case of a fully DIY band), inventory risk is one of the more significant risks you face as a band and it should be treated as such. Nobody wants boxes of their band’s merch to end up in a landfill because you pressed 2,000 copies of an LP to get the best unit cost, then sold 300 of them.
Ordering inventory – shirt sizing:
In the last column, I stressed how important keeping track of sales details is in understanding what to order and keeping shirts stocked in the right sizes. In order to determine an accurate sizing model, you must initially ensure you don’t “stock out” of any of the sizes of your designs. If you try to determine what your actual size skews are based on sales numbers after you stock out of everything, guess what you’ll end up finding? That’s right; you sold exactly what you ordered! In the event that you DO stock out of a particular size in a particular design, you should note exactly when and where it happened, in order to accurately interpret the data beyond that.
It’s also important to note that tracking your sizing models by regions can help avoid stock-outs. It shouldn’t surprise anyone to know that the sizing spread for t-shirt sales in France is significantly different than the sizing spread for sales in Texas. Knowing these differences (supported by the actual numbers) will definitely assist you in ordering and picking stock for upcoming tours, based on the tour routing.
Pricing – What do we sell for?
In my experience, the best approach in pricing products on tour is to react to the individual markets you’re performing in. Things can vary significantly depending on the band, and depending on the tour. The name of the game for touring bands today (and really ANY company selling ANY product) is – “what can we get away with.” It shouldn’t take more than a few people commenting to you about how cheap your merch is, to realize that you should probably increase your prices to meet the “consumer expectation.” This is particularly relevant when selling in other countries with exchange rates that are favourable to your home currency. When dealing with foreign currencies, we all have a tendency to mentally convert back to our home currency, and base prices off what we would typically sell for back home. This shouldn’t be a factor in determining your selling price in other markets. What are the customer expectations? Beyond that; don’t worry about it.
In our next column, we will be looking at a few commonly asked questions about band business structure: to incorporate or not to incorporate.
KEN mode‘s fantastic new Steve Albini-produced album, Success, is out now. Listen and nab your copy here. They’re also in the midst of the Huge Success Tour across the U.S. and Canada – they’re in St. John’s tonight. Catch em’ at a show:
Oct 13 – St. John, NB @ Pub Down Under ^ w/Anthesis Facebook
Oct 14 – Halifax, NS @ Gus’ Pub ^ Facebook
Oct 15 – Fredericton, NB @ Capital Complex ^% Facebook
Oct 16 – Quebec City, QC @ L’Anti ^ Tickets , Facebook
Oct 17 – Montreal, QC @ Turbo Haus ^ Facebook
Oct 18 – Sherbrooke, QC @ Le Murdoch ^ Facebook
Oct 19 – Ottawa, ON @ House of Targ ^ Facebook
Oct 20 – Kingston, ON @ The Mansion ^ Tickets , Facebook
Oct 21 – Toronto, ON @ Smiling Buddha ^ w/Mad Trapper Tickets , Facebook
Oct 22 – Hamilton, ON @ Absinthe ^ Facebook
Oct 23 – London, ON @ Call the Office ^ Facebook
Oct 24 – Windsor, ON @ Dominion House ^ Facebook
Oct 25 – Detroit, MI @ PJ’s Lager House * Facebook
Oct 26 – Cleveland, OH @ Now That’s Class * Facebook
Oct 27 – Pittsburgh, PA @ Mr. Roboto Project * Facebook
Oct 28 – Columbus, OH @ Ace of Cups *~ Facebook
Oct 29 – Indianapolis, IN @ Joyful Noise *~ Facebook
Oct 30 – Columbia, MO @ Social Room ~ Tickets , Facebook
Oct 31 – St. Louis, MO @ The Demo ~ Tickets , Facebook
Nov 1 – Chicago, IL @ Cobra Lounge ~ Tickets , Facebook
Nov 2 – Dubuque, IA @ The Lift ~ Facebook
Nov 3 – Milwaukee, WI @ The Cactus Club ~ Facebook
Nov 4 – Madison, WI @ Dragon Fly Lounge ~ Facebook
Nov 5 – Sioux Falls, SD @ Total Drag ~ Facebook
Nov 6 – Minneapolis, MN @ Hexagon Bar ~ Facebook
Nov 7 – Winnipeg, MB @ the Windsor + w/Velodrome Facebook
+ with Conduct ( https://publictone.bandcamp.
% with Fuck the Facts ( https://fuckthefacts.
# with Child Bite ( https://childbite.bandcamp.
^ with Life in Vacuum ( https://lifeinvacuum.
* with We Are Hex ( https://wearehex.bandcamp.
~ with Lo-Pan ( https://smallstone.bandcamp.