How are you using new revenue streams like merchandise to grow your restaurant?

[mrollings]

Hi everyone! New Square research found that 34% of restaurateurs plan to sell merchandise or other non-food products over the next 12 months. Is anyone currently using new revenue streams to grow? If so, what are some tips for success you’ve picked up along the way? 

If you’re still figuring out how to tap into new revenue streams and need inspiration, I highly recommend you check out how these four Square sellers are approaching merch. 

For more inspo on business growth, be sure to read our full multihyphenate series celebrating sellers and their diversified growth.

[maxpete]

Merch can be such a big driver for revenue growth!

Paging @MrWellFed, @BrianaJo, and @Fishman_Tim 

[Lovewell]

We are very much into merch! Most coffee shops now have taken this on and we’ve really seen how this helps.

We like to drop seasonal merch and limited releases. 

We also have a small marketplace in both of our shops with items that reflect Lovewell and things we think people are loving from other small or women owned businesses. 

It also is a great avenue to support other artists and makers as well. 

- Lovewell 

[Eaker]

We sell a pretty decent amount of merch in our BBQ restaurant.  Merch accounts to about 2% of our total sales; a nice little booster to the bottom line.   We offer 3 different styles and prints of shirts, as well as large assortment of hats.  I would suggest starting out small and expanding from there.  Note that are price breaks as you order more of a type as well,  Usually a good pricing breaking point is a 144 or 288 items.  

[RuckusDonuts]

Merch is a very small part of our revenue, and that's fine. To me selling a shirt or a hat is like finding a $20 bill in a pair of jeans LOL It's money you take (and the free advertising it generates) but you also have X dollars just sitting on shelves. I'd like to carry more merchandise but that also requires taking a few thousand dollars and, in effect, investing it in low yield, long term stocks 😉

The two biggest non-retail revenue streams we have are wholesaling our product and also doing events/pop-ups, both of which have been major impacts of our revenue.

[adamp29]

Merch is an excellent way to add to 'basket values', but I would say that rather than putting all merchandise beyond the servers in a cafe, the items need to come out front more. A t-shirt or mug needs to be picked up and 'experienced'.

Also cafes could be using them as loyalty items too - instead of 1 cup of coffee free, you get a mug or a t-shirt - and thus the cafe gets onward advertising and an advocate community. But make the t-shirt cool - not just your company name and logo!

[Pesso]

That's such a great tip, @adamp29 ! Making things more accessible and experience-able is huge towards making folks feel more connected to it before they buy it -- thus encouraging a sale. Love it! Thanks for sharing-

[theroyalctambo]

Merch is becoming a big part of my business, and something I want to grow. In seven years I have gone from less then a $1000, to $60,000+, though I think the growth will slow next year (hopefully still grow, but not as exponentially). Will definetely check out the above links, as I need to get smarter with merch. 

[maxpete]

Love to hear about this growth!

[theroyalctambo]

Some of it is just as the business grew, I had the funds to have the merch stock. Some is knowing more what the customer wants. 

The main jump recently (30%) was a basic one, but one I was apprehensive about doing, which was to convert a room dedicated to selling the merch, and spending the money on being able to display it in a professional way. I spent about $5000 on display items and installing (albeit alot of that was freight as I am remote), but saw an increase of about $30,000, which with merch having about a 50% gross profit means it paid for.

My big challenge is next year to keep the growth going! (albeit that's the entirety of my business)

[maxpete]

Rooting for you and keep us posted on this journey too!

[adamp29]

Superb - you took a chance, and so far it's paying off. This is what every business owner wants to hear! What display items did you use, and what merch are you selling?

[theroyalctambo]

Magnets

Key Rings

Pens

Coolers

Car Stickers

Cotton Bags

Cotton Shirts

Bottle Openers

Chicken Polos

Pub Shirts

Kids Polos

Trucker Caps

The above is what I sell. I used to have a display case, and then we went and grabbed it for customers. Now we have a room where 75% of the space is dedicated to merch, and everything is on display and they can grab themselves and bring to the service area. It's like a slat system, where things designed for shops and you can mix and match the display options.

[beth9]

@theroyalctambo I am interested to know what items sell the best/worst and how much you’re having to buy to get a 50% markup. I’m just starting to look into getting merch and have been finding prices to be higher than I thought they’d be. But I’ve had a lot of requests for merch. 

[theroyalctambo]

 

Ahh so my mother is an accountant so can't help but give a detailed answer haha. Above is 3 little tables. First is What I sell and it's GP%'s by highest GP%, and includes the order qty's.

Second is how many I sold, but sorted in % of total profit by item. So sorted it in biggest money earner, not by number sold

Third is how many I sold, in order of top sellers

Whilst I am a "pub", I have a fairly specific tourism event people come to 7 months of the year. 

I must admit I will probably drop prices next year or the year after, and try and sell more of the item possibly, as that may lead to more returns, but unsure, as I sit fairly comparable in the market, so may just test in certain items first.

I am perhaps happy to talk cost of items, but this is a little bit of history with suppliers, and possibly an avenue of revenue for me in the future, so would have to think about it haha. I am buying from China, with suppliers I have tried and tested over several years.

[beth9]

Thanks for all of this. It's really helpful!