Over the next couple weeks, we’re going to get you ready, and teach you everything you need to know to increase profits with restaurant merchandising for your bar, plus give you some inside tips and leads to make each step of the process easier.

Social media presence has really allowed restaurants to develop their own brand online, so why not increase revenues by offering merchandise?  You’ve seen the breweries doing it.  How many people proudly wear their beer-hoodies that proclaim, “I know what’s cool” to the world?  Don’t you think you should do a little too?

This post is just the intro.  Follow this blog over the next few weeks and upcoming posts for tips on how to execute your program.  We’ll be discussing:

• How to manage printing, orders, and choose merchandise
• E-commerce and how to set it up
• Marketing via displays and how to incorporate to your social media message
• Links to resources, research, and other interesting tidbits

“I don’t want to miss it!”

Should my bar/restaurant offer Merchandise?

We talked with a friend, and former General Manager and head of retail at Canal Park Brewing in Duluth, now working with Bent Paddle, about how restaurants should go about creating products and new revenue streams via Merchandise… And it works. BIG TIME.

Just look at how big the new Surly Brewing retail shop is, and although, clearly, you won’t have space like this to do it, it DOES make sense to find a little area for the venture.

50% Gross Profit

Research done by Cornell found a well-designed and thought out merchandise typically returns gross profits of 50 percent of sales or better.

As you can see, with a major (promised to keep it confidential) restaurant in CA, merchandising, is the smallest, but certainly not most insignificant contributor to annual profits!

(note: we did not get rent/sunk cost info from them, this only displays as a percent of annual profits where each revenue stream contributed, we assume, on COG and nothing more)

Big Annual Sales Increase by Adding Merchandise

Of course, its easy to see how this makes sense… From a COG stand point, food spoils, prices are going up, etc.  Events rent spaces AND sell food, so margins a a bit better, but Merchandise offers margins at least as good, and so contribute to overall profits more significantly.

Food Prices are Volatile

We’re of course NOT saying, “Gee, food prices are all over the place, so you should not sell it…” simply that merchandise prices are actually falling vs. volatile food prices.  You can read more about these trends on FORBES.

Lets look at this from a COG Standpoint, as you can see, MERCHANDISE fits well in your margins, and there is virtually no, or FALLING costs, but rising allowable prices.

Great for the Brand

You literally have built a loyal customer. This is as good as word-of-mouth marketing, and WAY better than CityPages tries to pretend at, “…grow your brand…”

1. They will see your logo every time they wear it
2. They will talk about it with their friends
3. They will have loyalty and want to return

Besides, just think how great it will be seeing people out wearing the thing you work so hard on!

When Should I start on this?

Summer in MN is a great time to release your products, so if you’re thinking of going for it this year, you’ll definitely want to get started now in creating the sales program, and of course, getting the items shipped in!  Of course, you’re going to need a sweet design too, but we can help you with that. We also work with a great printer out of Eau Claire, WI if you need a low-cost printer! (call Matt at 612-803-1022 for the hookup)

Thanks for the advice, but will it be a lot of work?

Anything that returns this kind of margin and impacts your brand so strongly will OF COURSE be a lot of work. But that is why we are here, to make that much less so.

To be effective, you will need to handle this professionally, paying attention to details, displays, online sales… You will have to choose items for your brand, and come up with great ways to sell them.

(Lucky for you, we’ll be discussing this in several more blog posts to come…)

PS.

If you have some tips for us you’d like included about this topic, please drop us a line!   If you want to make sure to get this info as soon as it comes out, SIGN UP ON THE EMAIL LIST.

Of course, we understand that you are limited in your time, what, with managing the bar, running your social media, engaging in other marketing efforts, but that is why we created the HUB, so that you would have more time to DO projects like merchandising, and spend less creating and managing your online presence. If you’d like more info on how this can save you time, just ask!