How to start a corporate merchandising business

Launching a merchandising business is a great way to use your design and marketing skills to meet the growing corporate demand for promotional products. From structuring your business to working with suppliers, find out how to set up your own corporate merchandise business.

What is a corporate merchandising business?

Many companies give away corporate branded items to staff and customers as a way to promote company image and increase engagement. A corporate merchandising business specialises in working with companies to design and produce branded products. Common corporate merchandise products include T-shirts, pens, reusable cups, hats, umbrellas and even hand sanitisers and cheese boards.

How to start a corporate merchandising business

Consider these steps before opening your own corporate merchandising business:

1. Do market research and select products to sell online. The first step is doing market research to find out the types of products that are popular and select your product. Hand sanitisers and masks have become popular merchandise items due to the pandemic. On the other hand, USB sticks are no longer popular because many people use cloud data sharing services. It's also important to consider the causes that your corporate customers align themselves with. For example, if many businesses promote their environmentally friendly image, consider offering eco-friendly products such as reusable cups and reusable shopping bags.
2. Develop a business plan. Once you have done market research, write a business plan that sets out your best estimate of business income and expenses. There are also small business loans to help you meet the initial set-up costs.
3. Create a brand name and logo. Choose a business name that is unique, easy to remember and communicates what you do. As there are many businesses in Australia which already specialise in the commercial merchandise and gift space, it's important to check your business name with the Australian Securities and Investments Commission (ASIC) to make sure the name is available. For additional branding, create a logo that you can use for your online store. There are graphic design tools and services to help you.
4. Find suppliers. As you will be purchasing the products in bulk from wholesalers, it's important to find reliable wholesalers that sell good quality products. If the supplier doesn't offer the customisation service, you will also need to find a printing company or a laser engraving company to help you customise the products with the company branding. Based on your market research and product selection, contact suppliers to find out the minimum order quantity, get quotes and get physical samples of the actual product if possible. It's also important to consider their turnover time, shipping time and capability to meet urgent orders.
5. Choose the right structure for your business. If you're running the corporate merchandise business on your own and with another partner, generally a Sole Trader or Partnership is the easiest and most cost-effective way of setting up the business. But there are advantages in using the Company structure. It will give you additional protection over your personal assets should things go wrong and it will give you the option of having external investors on board. The pros and cons of the different business structures are explained in more detail below.
6. Consider legal requirements. As a corporate merchandise business, you will be dealing with corporate customers, suppliers and couriers on a regular basis. It's important to have legal documents to protect your interests. For a corporate merchandise business, useful documents include a Wholesale Agreement and a Delivery and Return Policy.
7. Market your business. You will be marketing your business directly to corporate customers, so it's important to build a relationship with them. One effective way of marketing your business is sending free samples of products to potential customers with their company logo, so they can get an idea of what the final product looks like. You should consider building an ecommerce store, so your corporate customers can browse your products and prices online.

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Courses and qualifications

You don't need formal qualifications to start a corporate merchandising business. However, as you will be working with company logos, typography and colours, it's helpful to have an understanding of graphic design. There are online graphic design courses that can help you build basic graphic design skills.

On top of that, you can strengthen your sales and marketing skills with a range of informal and certificate courses. Here are some suggestions:

• Smart Marketing with Price Psychology. This Udemy course teaches you about online marketing and how to position your product to maximise revenue.
• Small Business Planning and Marketing. This Accredited Online Training course teaches you the fundamentals of running a small business and how to develop marketing strategies for business success. This short course goes towards the completion of Certificate IV in New Small Business.
• Certificate IV in Entrepreneurship and New Business (BSB40320). This certificate course, available through Open Colleges, gives you the tools you need to improve your sales expertise and teaches you a range of solutions for closing a sale.

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Equipment and software needed to start a corporate merchandising business

Unless you're planning on setting up your own printing shop, running a corporate merchandising business can be done online. In terms of equipment, you'll need an up-to-date computer, reliable Internet and a website for your business.

To present your merchandise, you're going to need a website with shopping cart (or ecommerce) functionality, enough storage for image graphics and potential to upscale. For instance, you might want to add a customer service chat box to help customers shopping on your website. Whether you choose to launch your own website or you hire a web developer depends entirely on your level of expertise.

Accounting software, such as QuickBooks or Xero, is also important to keep track of your business transactions.

To build your client database, consider using a customer relations management (CRM) software. This can help you with repeat business and email marketing campaigns.

For online marketing, using a program such as Mailchimp is an easy way to manage your email marketing and newsletters. You can also consider other marketing tools for search engine optimisation, logo or graphic design, video production and more, depending on your strategies.

How to structure your corporate merchandising business

There are three main business structures to choose from, depending on how many business owners will be running the company and how much protection you want to have over your personal assets. The three main structures are:

• Sole Proprietor. If you're going into business on your own, you can register your business as a Sole Proprietorship. Also known as a Sole Trader, this business structure has one business owner with full liability for any business debts.
• Partnership. For a business with one or more partners, this business structure offers shared liabilities and profits. To make a Partnership more effective, drafting a Partnership Agreement can be helpful.
• Company. A Company is registered as a separate entity and is owned by shareholders. This business structure gives you limited liability and shared responsibilities. It's common to complete a Shareholders Agreement when a Company is incorporated or registered.

Registering your business name is required, unless you will be using your legal name.

Do I need legal advice and documents?

It's important to get your legal documents right to deal with any potential issues with customers and suppliers. Useful documents include:

• Returns Policy. Dealing with requests for exchanges and refunds can be tricky when you are providing customised products to clients. You should have a well-written Delivery and Returns Policy so you are protected if the client changes their mind.
• Wholesale Agreement. As you will be ordering products in bulk from suppliers, having a Wholesale Agreement can be useful in protecting your business if things go wrong – for example, if the order doesn't arrive on time or if the products are faulty.
• Tax invoice. Most corporate customers will require a tax invoice that sets out the price of the products ordered, goods and services tax (GST) and payment details.

You can easily find templates for these types of disclaimers from online legal document sites. Some of these offer free downloads and most have a wide selection to choose from.

Some of these online services also offer legal advice. These sites are often cheaper than going straight to a lawyer for help and often will offer a free first-time consultation.

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How to find customers

As most corporate merchandising small businesses are operated online, focusing your efforts on digital marketing and reaching your clients through ecommerce sites, social media and other online platforms can greatly help to increase your visibility. Online business directories, such as White Pages and True Local, offer another avenue to advertise your business.

Another effective marketing strategy is to send potential customers sample products. For example, if you know a local real estate agency that distributes corporate branded items such as hand sanitisers and water bottles at open homes, you can reach out to the agency and offer to give out free samples of your products with their logo printed on it.

Online marketplaces are another way to promote your company without spending too much money. Some of these sites include:

• Airtasker. This site is great for conducting market research, as well as posting your own profile so people can find you.
• Oneflare. This website brings customers and professionals together all in one place. Great for people in search of a specific service.

How much should I charge my customers?

The amount you charge will depend on the specific promotional items you're creating for a business and the quantity they want to order.

Below are estimates for different items based on small quantity orders:

To get an idea of what to charge, you can research and check out the price points of competing corporate merchandising companies. Pricing yourself competitively can give you the edge and increase your client reach.

Your prices will also be affected by the order size, as most wholesalers will offer a discount to customers who buy in large quantities.

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Frequently asked questions

Do I still need business insurance if I work from home?

If you plan to keep an inventory of stock at your home, business insurance may offer better coverage than a regular home insurance policy.

How can I make the most out of my marketing strategies?

Once you've identified your marketing strategies, testing them out is one way to tell if they are going to be effective. Having the right marketing tools can also help, as can hiring various marketing or advertising freelancers online on platforms like Upwork or Freelancer.

What type of finance options are available for startups?

There are many different loan options startups can consider including debt and equity financing. Read our full guide to startup loans for more information.