So the idea about selling Thrive merch to raise more money for development has been around for a while. There’s been some investigation into ways to make it work, but no full solution has really come up with anyone pushing it really forward. I looked into the findings of earlier attempts today and again failed to find a solution, but I’ll document my findings here so maybe someone who knows more can pitch in.
The first trouble is that we need products to sell, to solve this we basically have two choices:
- Commission an artist (either currently on the team or some random freelancer) to make custom artwork for the merch that is Thrive related. Hiring existing freelancers is legally speaking a clearer situation as they are used to handling freelancing contracts and taking on the tax burden themselves (they are basically a company selling their services), whereas if we did a commission contract with a Thrive artist who is not doing freelancing currently, it might not really be worth it for them to figure out how to pay taxes on their income. Additionally if the freelancer is in EU or Finland there’s VAT to worry about. I didn’t find any concrete guidance on how a freelancer outside Finland should be handled properly.
- Use existing art, technically much of the Thrive art, though not all as not all historic artists have signed the CLA, could be turned into merch, but in this case we wouldn’t have any means to stop someone else from also releasing the exact same merch. Because of that I don’t think this is a really good approach.
With paying the artist we can either do what I stated above and pay upfront, or we could maybe use some kind of royalties-based licensing scheme where we would only pay the artist based on sales. So in that case we’d move the risk from us to the artist and this is probably tax-wise a completely different thing and the artist would need to continuously handle their tax situation as they keep getting paid.
The only really clear situation seems to be if the freelancer is in Finland, then we can do things my Finnish employment laws (and probably get by just the 20€ or so our accounting company charges for employee payment tax calculations). Page about this (in Finnish): Freelancer verotuksessa - vero.fi
A different situation is where the freelancer is considered another company (even in Finland this can apply) in which case the buyer of services is only responsible for taxes and the other party is responsible all the employee fees and taxes. This page (again, in Finnish) describes the difference between an employee and just paying a freelancer for their work: Palkka ja työkorvaus verotuksessa - vero.fi
A found some templates, in Finnish, on this page: Toimeksiantosopimukset - Akavan Erityisalat which can probably be used (after translating to English) to make sure the freelancer is not considered an employee.
Not entirely related but I found a page describing how to handle taxes for a fully foreign employee hired by a Finnish company (page in Finnish again): Ulkomaisten työntekijöiden verotus - vero.fi which basically boils down to that the employee is not taxed in Finland but the company needs to figure out the tax situation in the country the employee is in and pay taxes and fees there. I doubt our accounting company has experience with random countries so if we hire an employee outside Finland we probably need to get an accounting agency or a lawyer in the target country to help us out…
Hiring a freelancer through a site like https://www.upwork.com is actually not that simple. This is because upwork isn’t a party to the agreement between the client and the freelancer. Instead they just do escrow, payment services. So the only benefit to using a site like that is to find existing freelancers and being able to gauge the reputation of the freelancer. We still have all of the tax law things to figure out, though experienced freelancers probably already know how to handle their taxes so outside the EU-based freelancer could be very easy to deal with.
After figuring out how to get the art for the merch, comes the harder part: making an online store to sell it in.
For this there are actually a couple of seemingly good print-on-demand and shipping services:
- https://www.printful.com (bonus points for actually showing their pricing on their website)
- https://printify.com/ (doesn’t show pricing on their website)
Both of these are free to start off with and only charge for the printing and shipping services (unless we go on printify to the higher service tier which is a fixed monthly cost). Both of these services can integrate with various online fronts but none of the ones I looked at handle sales taxes. Which is a huge problem!
Here’s some popular storefronts that don’t handle (but provide some tools to set things up) taxes:
- https://www.shopify.com/
- Etsy (this handles taxes but requires items to be handmade by us, so I don’t think we can sell there)
- Woocommerce
There’s actually sites that handle taxes:
- Sales Tax - Payhip however that only handles EU taxes (seemingly not USA, so we might need to pick multiple stores to sell in…):
- Gumroad Features – Built for new beginnings seems mostly an extended Patreon alternative, this also seems to only handle EU taxes
But those don’t have integrations to any on-demand printing service I looked at, so we’d need to either manually copy orders or write custom software to forward the orders.
I found this page listing some online serving services that handle VAT: Digital sales in the EU: Which e-commerce platforms comply with VAT? - Quaderno
There’s seemingly one saving grace which is that Stripe supports automatic taxes handling: https://stripe.com/en-fi/tax That handles collecting all the tax payments and forwarding them, but still needs to manually submit tax reports in all countries taxes where collected in. They have some filing partner services but I doubt those are free.
It seems to be possible to use, for example, Shopify with Stripe payments so it might be possible to enable that option there. Of course the hardcode option is to make a custom storefront that integrates with Stripe and one of those printing services’ API, which is not as bad as it sounds because the storefront just needs to display products, have cart, and then send that info to Stripe and then handle the payment success info coming from Stripe to forward it. That’s kind of similar to using one of those storefronts that don’t integrate with the on demand printing services automatically.
Anyway my conclusion is that selling merch would be a huge pain to setup, and would cost quite a lot in overheads. Thus sales volume would be pretty important to make sure that any significant profit could be made. To me it seems maybe better to try to push the Patreon harder. Or maybe donations? But then again doing the donations last time was a bit of a mess and for next time we’d need to prepare better by maybe getting some separate accounting for the non-profit donations side of things, but that might cost extra and I kind of want to consult a legal expert on how to set that up, so a new donation campaign would need to earn at least 50% as much as the first one to really bring in any money…
Next, I think we need to somehow research how many sales we would actually get per month (and how much profit based on how high we can price our shirts and other merch), before putting in the effort to trying to find out how the taxes and selling could work.
Does anyone have any thoughts, or better yet someone who knows how to do this right?
