Missing Merch Money? Australian Merchandise Companies Dig In Following ‘Massive Losses’ From U.S. Platform

Two of Australia’s top merchandise businesses say they wearing debts numbering in the hundreds and thousands of dollars following an impasse with U.S. -based online marketplace Merchbar, The Music Network has learned.

Sound Merch (SM) and Love Police ATM (LPATM), an affiliate of Mushroom Group, claim to be collectively owed more than $250,000 from Merchbar, which on-sells licensed stock supplied from merchandise companies around the globe, and receives a portion of revenue.

Since late 2023, reps for both companies tell TMN, Merchbar’s payments stopped with no indication. Both businesses paid the artists the sum owed, and have absorbed the hit.

“Soundmerch is a small Australian business of twenty-five employees,” says Sound Merch director Tim Everist, in a statement to TMN. “This is a massive loss to our business – most don’t recover after a hit like this. We have covered the merch losses incurred by our bands and paid them accordingly. Now Soundmerch shoulders the debt owed to us from Merchbar.”

According to separate statements posted to its website in 2020, Merchbar is Spotify’s worldwide merchandise partner, and has an arrangement with YouTube to facilitate official branded merch sales via creators’ Official Artist Channels in a slew of markets.

Covering the debt, Everist continues, “has put us in a precarious situation where we had to consider letting employees go. Soundmerch is now in a really challenging situation that’s been brought on due to Merchbar’s refusal to pay us for the stock we provided. We just want what’s owed.”

To cut their losses, SM and LPATM removed all products from the Merchbar platform, the Australian companies claim. Negotiations are said to have been ongoing for well over six months.

Merchbar responded to requests for comment from TMN. “The characterization of the claims allegedly brought to your attention by other merch companies are simply not accurate,” reads a statement.

“Unfortunately, due to the strict and mutual confidentiality provisions within our partnership agreements and the lack of specificity in your claims, Merchbar is unable to comment on the status of our relationship with any parties as well as the below allegations other than to say that they are not accurate.”

A followup email to Merchbar had no response.

Merch sales have been a rock for the artist community at a time when the debate on the value-gap rumbles on and the live arena finds itself in a sticky spot.

“I just think it’s really unfair, especially in the current economic climate to not be paying artists – it’s hard enough as it is for them,” comments Love Police ATM General Manager Sebastian Hampson.

“Not letting artists know that they weren’t going to be paid is even worse, they could have sold those products via other avenues and actually got paid.”

Merchbar is based in San Francisco, CA, and was founded by John Hecker and Edward Aten to “give fans one place to discover and buy merch from all their favorite bands,” reads a statement on its official website. Aten, CEO of Merchbar, has taken “a leave of absence” from the company and has no estimated date of return, reads an autoresponder message.

TMN reached out to Spotify for comment.