So you’re at a point now where you want to hire designers but aren’t sure when to do so. I personally started hiring designers upon reaching Tier 500 but I would like to preface this by saying that there is no “correct” point to hire designers. It highly depends on your performance and strengths when it comes to running your Merch by Amazon account.
You may choose to hire when:
- You hit a high enough tier to the point where you are no longer able to hit your daily upload limit;
- You can no longer design for yourself but still want to grow;
- You have time to upload but you require more designs (that aren’t your own designs because designing more yourself will take up more time).
But ultimately this equation yielding a positive number:
STR x Avg. Shirt Profit x 0.7 x 12 – 5
These are the things to consider when looking to hire designers:
No longer able to or want to design yourself
Let’s start with the obvious; a situation where you no longer want to design but you still want to grow. I don’t encourage this mindset because in my opinion if you are looking to seriously grow your business, sometimes you just need to suck it up and do the boring stuff. If you are earning more than what you pay your designer(s), then you may hire a designer to replace you. If you are unable to design due to personal reasons (i.e. time/commitment) then you may choose to hire, assuming your earnings support so.
Essentially if earnings are greater than what you pay designers; you can hire. This is the standard investment mentality.
Earnings and ROI (return on investment)
Before I get into situations where you might want to hire, I would like to explain the concept of hiring and how you get returns from it. I hired when my return on investment took 6 months. It is important to keep in mind that the average Merch user will only convert 10% of all designs into sales meaning this might also be true for your designers.
When you do hire a designer, make sure you keep track of all their designs and the sales they make for you. If it takes you more than 6 months to see ROI you should consider other designers. Another note is to keep note of your monthly earnings from Amazon. You’ll never want to pay your designers more than what you can earn monthly with Amazon.
I use the following equation to look at when is a good time to invest in designers:
STR x Avg. Shirt Profit x 0.7 x 12 – Cost per design
Where STR is your sell through rate (sales per month/total live designs);
0.7 is my conservative fall off rate of designs per year (to factor in shirts that sell once but never again)
12 is the number of months per year.
I have about 30% sell through rate, each design costs me 5 USD and my average shirt profit is $4.7, that means
0.3 x 4.7 x 0.7 x 12 – 5 = 6.844
That means for every design I get my designer to do I get back about $6.8 at the end of the year. You can decide what return on investment is worth your time because keep in mind you would still have to do the upload and research work associated with each design.
Designers will typically be able to handle anywhere between 25 to 50 designs per week. From experience, designers typically don’t design on weekends; you are looking at about 5 to 10 designs a day per designer you hire.
Assuming you have found a good consistent designer, you can now predict when you will fill up your slots. Obviously hiring designers at low tier makes no sense because you would be hitting your maximum allowable uploads too soon and leaving your designer with no work until you tier up. For this reason, you will only start by hiring 1 designer.
I am aware that lower tiers now get automatically upgraded once they hit tier requirements, so this wouldn’t be an issue if you know that you will be automatically tiered up; in this case you can start hiring at lower tiers. However, for tiers where you have to wait for amazon to roll out tiers upgrades then this is something to consider.
Consider how many designs you can design for yourself with addition to the previous point. If you hire a designer you may choose to stay being a designer yourself. In this case, you now have your designs + outsourced designs. So take this into account when calculating when you hit cap designs.
Adding yourself as a designer significantly reduces your cost for growth because you now have an extra designer (yourself) without having to pay for one. Also consider the fact that if you are able to design a lot in one day then you might not need designers.
What is your daily upload limit?
At lower tiers you will be able to easily up your daily upload limit yourself. Consider hiring designers when you have reached a tier that far exceeds how much you are able to design per day. For example if you are allowed 50 uploads per day but you can only produce 10 designs per day, it means you are missing 40 more designs daily; in which case designers are required to fill up the remaining slots.
The goal for the most efficient growth is to hit your daily upload limit. The more uploads you put up, the more chances you have at making sales. However, eventually you will reach tiers where it is inhumanly possible to reach your design cap.
How many uploads can you manage a day?
Perhaps the biggest limiter to how many designers you want is how many designs you are able to upload. You never want to be producing so many designs to the point that you are unable to keep up with uploads. You should know by now that uploading your design is no easy task. Now imagine if you are receiving 100 designs a day from all your designers. It’s unreasonable to think that you would be sitting through all 100 designs and uploading them.
This is where you judge for yourself how many designs you wanting your designer(s) to do. Designers will consistently upload per day so if you fall behind on uploading, then it snowballs pretty quickly and at that point you need to reduce your production of designs.
What if I’m a bad designer and need to hire designers from T10?
In my opinion, everyone looking to make a business with Merch by Amazon needs to have some sense of design or have some skill. It should never be a good idea to hire designers from the start because it makes the hiring process that much more difficult.
Why is this? Let’s say you are in T10 just starting out. You have no understanding on the types of designs that work for you. So how would you know if a designer you hire is good or not? The situation you want to avoid is hiring a designer, who may not even be a bad designer, but his or her designs never make any sales. At that point it’s just a poor investment decision for you. It is very important for you to recognise that a designer has a design style that fits the Amazon audience. It took me 5 designers and 4 months before finding my current designer who can convert at a similar rate as me.
You are much better off starting off as a designer yourself and seeing for yourself what types of designs sell and appeal to customers. Once you reach a good understanding on what the amazon market are looking for in a design, you can then go and use this as a check to see whether the designers you hire have what it takes to make sales for your account.