Green’s Dictionary of Slang

1. women as sex objects.

1683		Whores Rhetorick 114: Let her Frenchifie her Commodities, or, (to avoid ribbaldry) her Merchandize, not with that Country Pox, but with hard names, and Je ne sçaiquois.
1951		M. Spillane Long Wait (1954) 98: I’m not after merchandise, kid. I’m after information.
1961		G.L. Coon Meanwhile, Back at the Front (1962) 141: Hey [...] where’re you taking the merchandise?
1989		L. Aparvary Legionnaire’s Journey 50: Let’s trade women in skirts for women in bathing suits. [...] Without our uniforms [...] we’ll be in a better position to stake out the available ‘merchandise’ .

2. (US) constr. with the, the real thing, the ideal thing, the ideal person.

1900

Ade More Fables in Sl. (1960) 171: The Young Man thought that Lutie was all the Merchandise.

3. contraband liquor.

1929		Hostetter & Beesley It’s a Racket! 231: merchandise — Any form of contraband; liquor.
1931		D. Runyon ‘The Lily of St. Pierre’ in Runyon on Broadway (1954) 136: We load a thousand cases of very nice merchandise.
1969		‘Iceberg Slim’ Pimp 39: He would bank roll our venture if I copped the merchandise.

4. (drugs) drugs.

1938		D. Maurer ‘Lang. of the Und. Narcotic Addict’ Pt 2 in Lang. Und. (1981).
1949		‘Hal Ellson’ Duke 111: ‘Would you like a shot?’ he said. ‘Naw, I just want the merchandise,’ I said.
1959		J.E. Schmidt Narcotics Lingo and Lore.
1977		B. Davidson Collura (1978) 172: If you got merchandise to sell, I’m lookin’ to buy.
1979		‘Iceberg Slim’ Airtight Willie and Me 65: She laid her suction cunt and a sawed off shotgun on a snot nose heistman [...] to rip off their merchandise.
2001		ONDCP Street Terms 15: Merchandise — Drugs.

5. a man, often a male prostitute, as a sex object; thus damaged merchandise, one who was in some way, physically or mentally, ‘defenctive’.

1972		B. Rodgers Queens’ Vernacular 111: a male prostitute [...] merchandise.
1986–7		Maledicta IX 144: hey slip into [...] kit that shows off the merchandise and walk about on the bash, casually looking.
2010		W. Ings ‘Trolling the Beat to Working the Soob’ in Int’l Jrnl Lexicog. 23:1 71: In New Zealand there have been many terms for a young male street worker. [...] merchandise was in generic use by male sex workers in the middle decades of the twentieth century. Merchandise was what one took to the street. If a prostitute was beaten up, drunk, stoned, or had obvious mental health issues he was called damaged merchandise .