Inside the rise of Fanjoy, which dominates the influencer merchandise business with YouTube star clients like David Dobrik and Jake Paul
- Fanjoy is an e-commerce company that handles merchandise sales for top digital creators like Jake Paul, David Dobrik, and Tana Mongeau.
- Chris Vaccarino, the founder and CEO of Fanjoy, started the company by selling T-shirts for his brother's band in 2014, he told Business Insider.
- Around 2017, Fanjoy pivoted its business model to selling T-shirts and sweatshirts for YouTube creators and other internet stars, and the company began to build its presence in the influencer space.
- For some YouTube creators, especially those who are not advertiser friendly, merch has become a main source of income.
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In just two days last year, more than 6,000 people came to YouTube star David Dobrik's New York City pop-up event.
He ended up selling nearly 4,000 items of branded merchandise.
Dobrik's products were made through Fanjoy, an e-commerce company led by Chris Vaccarino, which has become the top name in influencer merch. Fanjoy has helped top creators like Dobrik (who has 16.7 million YouTube subscribers), Jake Paul (19.9 million subscribers), and Tana Mongeau (5.3 million subscribers) develop and distribute merch to fans. The company's website, Fanjoy.co, gets around two million unique visitors each month, Vaccarino told Business Insider.
Collaborations between top apparel brands like Nike or H&M and celebrities have long been a staple in the entertainment industry. But what Fanjoy does is a bit different. Its influencer partners have full creative control over their merch, which can cut across categories from T-shirts and scrunchies, to calendars and phone cases.
Fanjoy bills itself as a one-stop shop for these creators.
"It's a big draw, even for talent who hasn't sold anything before," Vaccarino said. "If we can get them plugged into our ecosystem and database it'll help sell more product for them and help them get up and running a lot faster."
Fanjoy is one of a few companies that work directly with internet stars in the merch space. Others include Killer Merch, known for working closely with Jeffree Star, and Mad Merch, which once worked with a variety of YouTube talent but has since scaled back in a strategy shift.
For some top creators, especially those whose content is not particularly friendly to advertisers, merch has become a main source of revenue. Logan Paul's merchandise line with Fanjoy was estimated to earn about $10 million in annual revenue in 2018, according to Forbes.
Dobrik's custom merchandise from Fanjoy makes up the majority of his income, he told The Wall Street Journal. The company helps him design, develop, and distribute a new collection of sweatshirts, T-shirts, and other branded items about once a month.
The current coronavirus pandemic has also shown how direct sales can stabilize an influencer's income in a time when advertising revenue decreases, and brands cancel influencer-marketing campaigns or put projects on hold.
Merch sales have actually increased over the last few weeks, Vaccarino said.
How Fanjoy got its start
The company originally started when Vaccarino was on the road with his brother's band, "A Great Big World," selling T-shirts in 2014.
"They had a hit song called 'Say Something' and my brother asked me if I wanted to go on tour with them," Vaccarino said. "I said yes, and for about six months I was on the road with them selling merchandise and really saw the connection that my brother's band was having with the fans at each location."
From there, Vaccarino created a subscription box company for musicians and bands, and named the service Fanjoy.
He worked with artists like Hilary Duff, Pentatonix, and Christina Perri in developing album box sets for fans, or what Vaccarino calls "care packages from your favorite celebrity."
In 2016, Fanjoy worked with the "Dance Moms" stars Maddie and Mackenzie Ziegler on a holiday-themed fan box, and the sisters' massive popularity across social media helped the product take off, Vaccarino said.
"I thought, maybe there's a bigger market that I'm just not seeing?" he said.
Shortly after, while scrolling through Instagram, Vaccarino discovered the world of influencer personalities, and he began reaching out to YouTube stars like Lucas and Marcus Dobre, known as The Dobre Twins online.
"I noticed they were getting so many likes and their engagement was really high," Vaccarino said, and that's when he connected with YouTube creator Jack Paul, who responded to his requests since many of the popular creators Vaccarino reached out to were (at the time) a part of Paul's YouTube collab group, Team 10.
From that moment on, Fanjoy pivoted its business model to selling T-shirts and sweatshirts for digital creators, and the company began to build its presence in the influencer space.
By the end of 2017, the company made the switch to selling just apparel and merchandise, and Vaccarino said Fanjoy made over $30 million in sales that year, up from $1.2 million in 2016. He declined to share more recent sales figures.
"It did really, really well," Vaccarino said. "The ease of creating a design and shipping was a lot easier than the care package business, so from there we started working closely with Jake and all of Team 10. It was a wild time [around 2017] to kind of launch a brand and see what we could build. Month over month the sales kept climbing."
Today, Jake Paul is a partner at Fanjoy, Paul told Business Insider.
Paul has sold merchandise around almost every event in his life, from relationships to buying a new car, and he even has a parody song targeting his audience to buy his merch.
Paul said selling merchandise was a "necessity" for digital creators who often have several streams of income, like YouTube ad revenue and brand sponsorships.
"It seems like an easy thing to sell merchandise, but it's actually an intricate business," Paul said. "It all about the story that is being told around a product so the fans can feel like they are a part of something bigger."
Fanjoy developed major connections in the industry through word of mouth, and client introductions
One of the things that's made Fanjoy successful has been the relationships Vaccarino has built with digital managers, agents, and the talent themselves.
Some of Hollywood's talent agencies, like WME, UTA, and CAA, represent the top digital creators across YouTube, Instagram, and now TikTok. Along with their managers, who cover all day-to-day responsibilities, agents help talent grow a larger business off social media.
"As I've been in the world for a little while, I've realized that everybody knows everybody," Vaccarino said. "I think word of mouth has been number one, and developing the brand over the last five years has helped as well."
Dobrik is managed by Jack Reed, CEO and cofounder of Millennial Entertainment, and he is signed with the talent agency WME, working closely with agents like Alexandra Devlin in securing major brand partnerships.
In the beginning of Fanjoy's entry into the influencer world, creators would reach out to the company directly, or clients would be brought in with the help of Jake Paul, Vaccarino said. Fanjoy started working with Dobrik and his creator collab group, the Vlog Squad, around 2017.
"Having one of our talent intro us to another talent has always been the most beneficial," he said.
The process behind creating an influencer product
Fanjoy does the backend business, shipping, and fulfillment for the merch, and also sometimes creates promotional materials, like a promotional video for Sam Golbach, Colby Brock, Kian Lawley and JC Caylen's "Merch Wars," or a custom shopping app for Dobrik's apparel collection.
"We take on all of that responsibility and leave them to kind of give design direction and aesthetic and really just help with the promo because they know their audience better than we do," Vaccarino said.
Fanjoy has an in-house design team that will sit with clients to brainstorm collection ideas, Vaccarino said. They plan collections around six months in advance, and with Dobrik they've released other products like a necklace for Valentine's Day and a disposable camera in a limited stock as a way to test out what the fans will buy.
Dobrik's assistant and childhood best friend, Natalie Mariduena, is in communication with Fanjoy on an almost daily basis helping with design concepts for future collections, Vaccarino said.
"Anything that relates back to the content, or David himself will sell really well," Vaccarino added. "I don't think we are in the T-shirt or hoodie business, I think we are just in the people and community business and our job is to continue to innovate and put out products that might be out of the box, because that's what the fans want."
For more on the business of influencers, according to TikTok creators, agents, and managers, check out these Business Insider Prime posts:
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YouTube star Tana Mongeau's manager explains how they've built a money-making business despite controversy, including $40,000 from T-shirts of her mug shot: Mongeau's talent manager Jordan Worona spoke with Business Insider about the business behind controversial content on YouTube.
