"When I started out, we weren't getting paid more than, like, ten dollars for the shows themselves," says Dashboard Confessional's Chris Carrabba. "Merch sales are what kept us going. Even now, we're still not making our living from playing the shows. Merch is where we make our profit."

Like Dashboard Confessional, many touring rock bands find that their most reliable sources of income are from selling T-shirts, posters, stickers and other merchandise while they're on the road.

"Merchandising, for a lot of our artists, is an important part of their income, sometimes more so than record sales," says Lee Tepper, CEO and co-founder of the manufacturing and distribution company MerchDirect. Since Justin Beck, of the New York punk group Glassjaw, and Tepper started MerchDirect in 1999 to help out friends' bands, the company has built a roster of more than one hundred groups, including Lostprophets, Simple Plan, Thrice and Thursday.

Whereas an artist usually earns about a dollar in album royalties for each CD sold, a twenty-five-dollar T-shirt that costs roughly five dollars to make can put as much as ten dollars in his or her pocket, after the venue and managers have taken their cuts. Depending on the artist, merch sales at a sold-out 2,000-seat venue can rake in more than $15,000.

That number grows exponentially for blockbuster pop stars: Had it not been canceled, Britney Spears' Onyx Hotel Tour stood to make $125,000 per show in merch alone, $50,000 to $60,000 of which would have been hers. A worldwide tour would have easily placed profits in the millions -- money that would have helped cover the enormous cost of keeping the production on the road.

Signatures Network manufactures and distributes products for Spears, Ozzy Osbourne, Kiss and Madonna. Before a band goes on tour, Signatures estimates how much the band stands to make by factoring in experience with the markets, the number of items for sale and whether it's a headlining or opening-slot trek. It then advances the artist anywhere from $25,000 to $400,000, in exchange for licensing rights. Like a major-label deal, a licensing deal doesn't pay again until the artist has recouped the advance. "Because everything involved in the record and music-publishing business has been so dramatically reduced," says Signatures' CEO, Dell Furano, "the money we'll advance Usher before his tour usually comes at a time when he's laying out significant costs relative to the production, like rehearsing and contracting backing musicians."

The money is even more important for developing groups. "Some bands are using their merch advance to do things like stay on the road, because the label can't afford tour support," says Peter Katsis of management company the Firm, which handles artists including Limp Bizkit, Dixie Chicks, Puddle of Mudd, Rooney and Linkin Park. "Sometimes a band might do a merch deal just to be able to shoot a video."

And, as Carrabba notes, there's another upside: The more T-shirts the band sells, the less it has to charge for tickets. "The expenses of the road are high, and we don't want to pass those expenses on to the consumer," he says.

Beyond the financial benefits, merch also offers artists another form of expression. "Besides the money, it's about having one more way to make your mark stylistically and thematically," says John Mayer, whose summer tour will boast an assortment of unique items, including limited-edition faux-vintage Trunk shirts from an imaginary 1983 world tour and signature iPod cases. "You're not making that much money off records anymore, so until people can figure out how to make a rewritable Hanes Beefy-T, merch is one of the last bastions of individuality, commerce and style that an artist has left."