Everyone has their own two cents about how to price at the lower tiers, but I’m telling you from experience to price low, tier up quickly, and get ahead on Merch while it’s still so new.
In my first month on Merch (June) I averaged a whopping $1.8 in profits per shirt sold at tiers 10 and 25. Fast forward to November and I averaged $4.75 per shirt at tier 1,000. This month I’m averaging $6.5 and at tier 2,000.
Until you hit 500 sales, or even 1,000 don’t worry about making any money. Merch by Amazon is a marathon, not a race. Your main goal when at the lower tiers it to make those sales. Period. You don’t care about the money and it shouldn’t matter until you’re at the higher tiers. Tier 500 is when you can start playing around with prices and designs and where you’ll really start to see your profits increase substantially. Those pesky lower three tiers are to weed out the people looking to make a quick buck. You want to get out of them as quickly as possible so you can start making some real money. Think about your Merch business years down the road, not in the next few months.