Gear your merch to the audience. CDs and T-shirts that fit the image of your band are a given, as are stickers and buttons. But ask your fans what kind of merch they want. If they demand snowglobes, get them made (but be aware of the cost). If you have a lot of adult fans and play a lot of bars, get your logo or name on beer koozies and sell those. If you have a lot of tween fans, perhaps you could sell colorful bracelets. The same goes in terms of sizes. If you tend to have a lot of female fans, get a lot of "girlie" size shirts made and go easy on the XXLs.
Create an attractive merch table. Use a square or rectangular folding table that's easy to break down and transport. Bring a light, as many clubs you play in will be dark, and you want to draw attention to your merch. Arrange your shirts and other merch in an organized, eye-catching manner. Have a safe and plenty of change on hand. Hire an experienced person to work the merch booth who can upsell and make deals. For example, if you sell your CD for $5 and your T-shirt for $10, offer to sell both as a package deal for $13.
Be vocal onstage about your merch. Point out your merch table to the crowd. If you're on tour, be sure to announce this and highlight how important merch sales are to you getting to the next town. The market you are playing could play a role in how you push your merch. Your $5 item could sell for $7 in more affluent cities, or smaller cities where shows are less common. Be willing to compromise on price when you can afford it. If your CD is $5 and someone only has $4, give it to them. You'll still make a profit, and you could win a potential faithful fan who will buy more merch down the road.