Merchandise sales are a significant revenue stream for artists, particularly in an era where recorded music generates less income than it once did. For event organisers, merch sales can also generate revenue through commission arrangements. But the relationship between organisers and artists around merchandise needs to be handled carefully to avoid disputes and ensure both parties benefit fairly.
Why merchandise matters to artists
For many touring and performing artists, merchandise sales represent a substantial portion of their income from live events. T-shirts, vinyl records, posters, and other items sold at gigs can generate more profit per unit than streaming revenue or even ticket revenue after costs are deducted.
This is particularly true for independent and grassroots artists who do not have major label support. For these performers, a good night of merch sales can be the difference between a tour that breaks even and one that loses money. Understanding this context is important when structuring your merch agreement.
Our article on the future of event merchandise explores how merch has evolved and where the market is heading.
Common agreement structures
There are several standard approaches to artist merchandise at events:
No commission: The artist sells their merchandise and keeps 100% of the revenue. This is standard at smaller venues, grassroots gigs, and events where the organiser is not providing any merch-specific infrastructure. Many small venues adopt this approach as a gesture of support for artists, recognising the financial importance of merch income.
Venue/organiser commission: The organiser takes a percentage of the artist's merch revenue in exchange for providing the selling space, tables, power, and sometimes staff. Commission rates at UK venues typically range from 10% to 25%, though this varies. Larger venues and festivals tend to charge higher commissions, while smaller venues charge less or nothing at all.
Flat fee: Instead of a percentage commission, the organiser charges a flat fee for the merch selling space. This gives the artist certainty about their costs and simplifies accounting, but it means the organiser does not benefit if sales are particularly strong.
Organiser-handled merch: At some larger venues and festivals, the organiser or a specialist merch company handles all aspects of the merch operation (staffing, point of sale, cash handling, stock management) in exchange for a higher commission. This is common at arena-scale events and major festivals.
What to include in the agreement
Whether your merch arrangement is formal or informal, the following points should be agreed in advance:
Commission rate or flat fee: State clearly what percentage or amount the organiser will take, and whether this applies to gross or net sales.
Space and equipment: What is the organiser providing? A table? A dedicated merch stand? Lighting? Power for card readers? Specify what the artist will receive.
Staffing: Is the artist responsible for staffing their own merch stand, or will the organiser provide staff? If the organiser provides staff, how will cash handling and stock accountability work?
Location: Where will the merch stand be positioned? A merch table in a prominent, well-lit location near the exit (where audiences pass on their way out) will sell significantly more than one tucked away in a dark corner. The location should be agreed in advance.
Timing: When can the merch stand open? Before the show, during the show, after the show, or all three? Post-show sales are often the strongest, so ensure the merch stand can operate for at least 30 minutes after the performance ends.
Payment methods: Cash and card? The artist should be able to accept card payments (most use portable card readers such as SumUp or Square). Ensure there is a power supply for charging devices if needed.
Settlement: When and how will the commission or fee be settled? If the organiser is collecting a commission, this is typically deducted from the artist's merch takings at the end of the night, or invoiced separately.
The commission debate
Merch commissions are one of the most debated topics in the UK live music industry. Artist advocacy groups, including the Musicians' Union and the Featured Artists Coalition, have argued that high merch commissions at larger venues disproportionately affect artists, particularly those at the earlier stages of their careers.
From the organiser or venue perspective, commissions reflect the cost of providing the selling space, infrastructure, and sometimes staffing. Larger venues also argue that the audience traffic they generate enables the merch sales in the first place.
There is no universally agreed "fair" rate. However, the trend in the UK industry is toward greater transparency and, in many cases, lower commissions. Some venues have moved to zero-commission policies for grassroots-level artists while maintaining commissions for larger acts with significant merch operations.
As an organiser, consider what is genuinely fair given the infrastructure you are providing and the financial situation of the artists you are booking. A 25% commission on a headline artist selling £5,000 of merch at a major venue is a different proposition from a 25% commission on an emerging artist selling £80 of T-shirts at a pub gig.
Practical considerations
Security: Merch stock has value and needs to be secure. If the artist is storing stock at the venue before or after the event, ensure there is a secure space available. If the merch stand operates during the show while the artist is on stage, it needs to be staffed by someone trustworthy.
Insurance: Clarify who is responsible for the merch stock while it is at the venue. The artist's own insurance may cover it, or your event insurance may need to be extended. This is worth checking, particularly for high-value stock.
Accounting: Keep clear records of merch sales, particularly if a commission is involved. A simple stock count before and after the event, combined with card payment records and cash reconciliation, provides a transparent basis for calculating any commission due.
VAT: If either party is VAT-registered, VAT implications on merch sales and commissions should be considered. This may require professional accounting advice for higher-value arrangements.
Going beyond the standard agreement
Some organisers add value to the merch experience in ways that benefit everyone. Pre-event merch promotion (including artist merch in your event marketing) can drive sales. Post-event online merch links (sharing the artist's online shop with attendees who missed out) is a thoughtful touch. Designating a well-positioned, well-lit merch area shows that you take the artist's commercial interests seriously.
For more on how merchandise fits into the broader economics of events, see our guide on setting merchandise prices. And for artists looking to create environmentally responsible merch, our article on sustainable merchandise at events covers the growing demand for eco-friendly products.
