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[CAFEPRESS] 4/22: Announcing Marketplace Changes

 
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Old April 23rd, 2009 Apr 23, 2009 9:26:07 AM -   #16 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Brick and Mortars usually pay a wholesale price of 50%, not 10%.

I had essentially been thinking of CP as an affiliate for my main site. Were they doing more than a traditional affiliate, yes, were they making more than a traditional affiliate, yes. That said, I am not willing to give any affiliate 90% commission, thus I'm removing all my designs.

There are a million ways CP could've been smarter about this and even attracted better and more designers. Will this be bad for PR, probably. Will it hurt their profit margins, I guess it remains to be seen.
 
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Old April 23rd, 2009 Apr 23, 2009 9:44:19 AM -   #17 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
Brick and Mortars usually pay a wholesale price of 50%, not 10%.
Very true, but then again, brick and mortars that pay a 50% wholesale price are taking the risk and they buy the inventory up front to carry in their store. In this case, the store is taking on an even greater risk because they are buying pre-printed inventory that may or may not sell.

Also, when a retail store buys a t-shirt from a designer at wholesale, say $10, the designer still has to pay for the costs of the goods they sold. The retailer then turns around and marks up the product they bought at least 100%, if not more. So the retailer will still make more than the designer on the transaction. Say the designer paid $5 to get the t-shirt printed wholesale, they make $5 on the sale and the retailer makes $10 or more on each sale in that scenario.

In CafePress's scenario, it would actually be more analogous to a consignment scenario (but still doesn't quite fit) where CafePress is showcasing the product in their "store" and *if* the product sells, they pay a commission on the sale. There's a bit more to it because CafePress is also producing the item on demand, but in consignment scenarios, the commission is more around 20%-30%.

Quote:
That said, I am not willing to give any affiliate 90% commission, thus I'm removing all my designs.
What about if the affiliate was also producing the product for you, handling all the payments, handling the customer service, etc?

Usually, in an affiliate arrangement, the merchant (you), would have the product in house, ready to ship, and you would sell through your own store where you processed the transactions. In that case, you'd be taking on most of the work/risk and the affiliate that did the marketing/advertising effort that generated the sale would earn a small percentage.

Quote:
Originally Posted by xbftees
There are a million ways CP could've been smarter about this and even attracted better and more designers. Will this be bad for PR, probably. Will it hurt their profit margins, I guess it remains to be seen.
True, true and very true.
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Last edited by Rodney; April 23rd, 2009 at 09:58 AM.. Reason: added stuff about retailer markup
 
Old April 23rd, 2009 Apr 23, 2009 9:57:22 AM -   #18 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
Originally Posted by Rodney

What about if the affiliate was also producing the product for you, handling all the payments, handling the customer service, etc?
I hear ya, and like I said, I was fine with them charging the base prices they had when I set up my shop because they were doing the customer service, credit card transaction, production and fulfillment.

I am just not willing to agree to a 10% commission for licensing my art. The return is too small and I can do better selling my tees myself. I already shut down my shop and deleted my hundreds of designs/products.

The thing I find most troubling is that CP is going to potentially undercut the shopkeepers. If you have your own site/shop and you sell a tee for $30, CP can sell the exact same thing for $25 and take your customers. They claim shoppers won't figure this out, I think they probably will. That alone is enough reason not to be involved with them.
 
 
Old April 23rd, 2009 Apr 23, 2009 1:46:48 PM -   #19 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
Originally Posted by xbftees
The thing I find most troubling is that CP is going to potentially undercut the shopkeepers. If you have your own site/shop and you sell a tee for $30, CP can sell the exact same thing for $25 and take your customers.
That is definitely a troubling aspect of the "we manage pricing" thing they're doing.

Quote:
Originally Posted by xbftees
I am just not willing to agree to a 10% commission for licensing my art. The return is too small and I can do better selling my tees myself.
This is one aspect I'm trying to better understand.

Why not do both? There's almost zero investment with CP, so it seems like the return on that investment would be pretty big. If they are going to spend money to send sales that wouldn't have existed for you anyway, how does that make it not worth it?

I'm definitely not knocking you for it, but I'm really trying to understand it, because you're definitely not the only person that feels that way.

I think that selling your art yourself is a great option for many people. It just takes a bit more work, money and effort. Heck, we've got a whole forum of people here to help guide you if you wanted to do it all yourself or just outsource some of it

But for others, using a fulfillment company is a perfect option. No worrying about learning the printing process, setting up a web host, getting a merchant account, processing orders...it allows some to focus just on their strengths (designing and/or marketing)
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Old April 23rd, 2009 Apr 23, 2009 2:02:09 PM -   #20 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
Originally Posted by Rodney
Why not do both? There's almost zero investment with CP, so it seems like the return on that investment would be pretty big. If they are going to spend money to send sales that wouldn't have existed for you anyway, how does that make it not worth it?
A couple of reasons, and I can only explain mine, not sure about others.
1. Selling on a POD dilutes our brand, if we are making good money by doing so, it's an easier case to make. When we're making pocket change, it loses its value for us.
2. It's a matter of principal. I don't agree that they have the right to determine the value of my creative intellectual property. I think this might be the heart of where a lot of people are coming from.
3. It is not worth the 20 minutes of my time it would take to upload designs and put them on products to make $2.00/sale. I could spend that time on my own website.

Quote:
Originally Posted by Rodney

I think that selling your art yourself is a great option for many people. It just takes a bit more work, money and effort. Heck, we've got a whole forum of people here to help guide you if you wanted to do it all yourself or just outsource some of it
It is both rewarding and a major investment (time and money and effort). We've been able to make it work for us so that's why we moved away from POD. We started out with POD and it was a good place for us to start out, but it's just not workable for us in the long term for many reasons and this kind of BS is just one of those reasons. We have other problems with POD but this was the final straw with CP and now I just don't want to do the work of setting up with another POD to take their place.

Quote:
Originally Posted by Rodney
But for others, using a fulfillment company is a perfect option. No worrying about learning the printing process, setting up a web host, getting a merchant account, processing orders...it allows some to focus just on their strengths (designing and/or marketing)
I am definitely not anti-POD. I am just anti-Cafe Press. I hope the other SKs who want to do POD move on to another POD that allows them to determine the value of their work and there are several of them out there. I think CP needs to be made aware that there is a problem with what they are doing.

They are even paying affiliates more than they are paying the SKs because apparently their labor is more valuable than the artists' labor. I really hope this blatant disrespect for artists comes with some consequences for them.
 
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Old April 23rd, 2009 Apr 23, 2009 2:13:21 PM -   #21 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
Originally Posted by xbftees
A couple of reasons, and I can only explain mine, not sure about others.
1. Selling on a POD dilutes our brand, if we are making good money by doing so, it's an easier case to make. When we're making pocket change, it loses its value for us.
2. It's a matter of principal. I don't agree that they have the right to determine the value of my creative intellectual property. I think this might be the heart of where a lot of people are coming from.
3. It is not worth the 20 minutes of my time it would take to upload designs and put them on products to make $2.00/sale. I could spend that time on my own website.
Thank you for this! That really helps me grasp "it's not worth it" better. I don't think I've heard it put as clearly as that, and what you say makes sense coming from an artist perspective.
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Old April 23rd, 2009 Apr 23, 2009 3:33:52 PM -   #22 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
Originally Posted by Rodney
Why not do both? There's almost zero investment with CP, so it seems like the return on that investment would be pretty big. If they are going to spend money to send sales that wouldn't have existed for you anyway, how does that make it not worth it?
The reason I'm going to opt out of the marketplace is this (from the above post):

The thing I find most troubling is that CP is going to potentially undercut the shopkeepers. If you have your own site/shop and you sell a tee for $30, CP can sell the exact same thing for $25 and take your customers. They claim shoppers won't figure this out, I think they probably will. That alone is enough reason not to be involved with them.

I have a very niche product, and people are finding my shirts mostly through Google, not the Marketplace. The Marketplace as-is has mediocre search and the saturation problem anyway, so I wasn't planning to rely on just the Marketplace.

If a shopper knows he may buy the same shirt from the Marketplace, then he can browse my (organized) store, pick out a design he likes, and search the Marketplace to get a better deal. When the buyer wears the shirt, and others ask him where he got the shirt, he may say "Cafepress" instead of "MyStoreName." Same problem if someone writes about a shirt online and links to the Marketplace instead of the store.

I'm not against a shopper getting a deal, but a $2 commission on a shirt is too low IMHO.

It's almost as if CafePress is in competition with the Shopkeepers... it seems a bit messed up.

(I am still new at Cafepress, and am very interested in hearing what experienced SK'ers think too.)

Last edited by Caterpanda; April 23rd, 2009 at 03:46 PM..
 
Old April 23rd, 2009 Apr 23, 2009 5:19:44 PM -   #23 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

@Rodney

Cafepress said they wanna bring more quality designs to the first few pages. What keeps them from making a deal with partners and sell those spots. It would be no surprise.

Then there is the thing with the now and then. Now lots of people have a markup on shirts whats between 6 and 10 dollars. What means they need to sell now 3 to 5 time more than now to get the same money.

And lets not forget the marketplace cookie. Some people have claimed already that sales show up as marketplace sale if they knew it has been a shop sale, cause it was a friend or family member. Cafepress explained that with if the person has been in the Marketplace before a cookie is set and its automatically a marketplace sale. How convinient is that and will be for the future?

CP don't wanna make it less confusing for the buyer. That is just marketing bla bla crap. Cause its obviously not less confusing. What they want is more money and more control.
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Old April 23rd, 2009 Apr 23, 2009 6:09:59 PM -   #24 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

The analogies to retail don't hold up that well; unlike in that situation Cafepress are doing everything except design the graphic for the shirt. It's far more analogous to designing something for Target, etc. In which case 10% commission is exceptionally generous, in addition to the upfront payment you'd usually receive. The problem is that no-one signed up for Cafepress thinking of it as a designer for hire arrangement, they sign up looking to start a small business. That and Cafepress aren't paying out the design fees, just the royalty.

Technically for most SKs turning off the marketplace would be just cutting your nose off to spite your face (I disagree that customers are smart enough to figure out how to get cheaper prices, although the falsely declared marketplace sales are a big problem), but I definitely sympathise with the fact that it's the principle of the matter.



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Old April 23rd, 2009 Apr 23, 2009 6:27:49 PM -   #25 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

@Solmu ...

Quote:
...Cafepress are doing everything except design the graphic for the shirt.
I have a different view at that. Its not like shopkeepers just make the design and uploading it and then they are done. They place the design on products, fit them on the products, tagging them, making descriptions, titles and driving traffic to cafepress with marketing their shops (every shop has links or ads to cafepress).

So shopkeepers do much more than just a design.
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Old April 24th, 2009 Apr 24, 2009 5:30:07 AM -   #26 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Yeah I completely agree what a rip off. They basically are making it so you cant make a decent income whatsoever.
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Old April 24th, 2009 Apr 24, 2009 6:59:37 AM -   #27 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
Cafepress said they wanna bring more quality designs to the first few pages. What keeps them from making a deal with partners and sell those spots. It would be no surprise.
My question - who determines "quality designs"?
I've certainly got a different idea from the guy across the room - why does CP feel they know the "right" answer???

Of course, we function as a full service shop, and also do fulfillment for non-profits. We don't use CP - tried it once 5 years ago, we weren't impressed. The quality wasn't bad, but the exposure was.
 
Old April 24th, 2009 Apr 24, 2009 7:58:52 AM -   #28 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
driving traffic to cafepress with marketing their shops
I don't think this really factors into it. When shopkeepers drive traffic to their shop, they aren't effected by the marketplace changes at all.

The amount of time, effort and money that CafePress spends in driving sales to the marketplace far outweighs the traffic that might trickle in because of a link to cafepress in the basic or premium stores.

Quote:
Originally Posted by tshirt4you
Its not like shopkeepers just make the design and uploading it and then they are done. They place the design on products, fit them on the products, tagging them, making descriptions, titles
I don't think those extra things still don't outweigh the amount of work CafePress does in the equation.


Quote:
Originally Posted by caterpanda
If a shopper knows he may buy the same shirt from the Marketplace, then he can browse my (organized) store, pick out a design he likes, and search the Marketplace to get a better deal. When the buyer wears the shirt, and others ask him where he got the shirt, he may say "Cafepress" instead of "MyStoreName." Same problem if someone writes about a shirt online and links to the Marketplace instead of the store.
While I'm not sure what percentage of customers would know about this or take the time to do it, I do agree that it could pose a problem. Especially the "I bought it from cafepress" instead of "I bought it from yourstorename". That type of word of mouth referral is important.

I'm not sure how they plan to deal with the "one pricing in the marketplace and one pricing in the store" thing. That seems like a big issue.

Quote:
Originally Posted by tshirt4you
Then there is the thing with the now and then. Now lots of people have a markup on shirts whats between 6 and 10 dollars. What means they need to sell now 3 to 5 time more than now to get the same money.
That is very true. However, they also didn't do any marketing or advertising to get the initial sales from the marketplace. If the shopkeeper then focuses the 3 to 5 times more effort in advertising their individual store, it's possible they could make up the difference that way.

What I think would be interesting is to see what shopkeepers suggest as an "alternative" solution to the issue.

How I personally see the issue:
CafePress is spending a lot of money to advertise the marketplace and send sales to shopkeepers. This money has to come from somewhere. It isn't covered by the base price and it isn't covered by the premium shop fee (both of those were calculated before the marketplace ever existed).

Where should the money come from to keep driving those sales?


Quote:
Originally Posted by tshirt4you
And lets not forget the marketplace cookie. Some people have claimed already that sales show up as marketplace sale if they knew it has been a shop sale, cause it was a friend or family member. Cafepress explained that with if the person has been in the Marketplace before a cookie is set and its automatically a marketplace sale. How convinient is that and will be for the future?
I hadn't heard about this issue. So if the shopper initially finds cafepress via the marketplace, and then (weeks?) later comes to buy at an individual store, then the marketplace would get credit for the sale?

This is sort of how it works with affiliate cookies I think. Whoever initially introduced the shopper to the merchant gets credit for the sale? Or maybe it's the opposite. Whoever the last person to help get the shopper to make a purchase gets credit for the sale?

I can see how that could make things really tricky with getting the commissions right (marketplace vs individual shop)
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Old April 24th, 2009 Apr 24, 2009 11:33:38 AM -   #29 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

As a new tshirt company I started small by using a third party - Cafepress - since it was a full service production apparel company which allowed me to stay on the creative side while they fulfilled my orders and drove traffic via their marketplace. As a n00b shop owner / shopkeeper of any sized business it is of course your duty to build your brand and advertise in order to attract more business / buyers. However, Cafepress and competitors like Zazzle, Spreadshirt, and Printfection have allowed aspiring designers to create designs and drive online traffic using their marketplace community that they have built. The upshot of these companies is that they have a hands-off approach for the owner to the rest of the logistics - i.e. order taking, online payments, customer service, printing, warehousing, shipping, tracking, etc. I started my company by using CP and immediately had some fairly decent success via sales from the marketplace. Cafe Press allowed me to set my own price points / commissions which were fairly modest, and CP would receive the base price for the item sold, plus I paid them about $50 a year to be a premium shop, where I could customize the look of my shop and the functionality. NOW however Cafepress.com has become TOO greedy, they sent their CP owners a letter today explaining they are making 2 significant changes, effective (almost) immediately:

1) They made new changes to their algorithm in order to deliver the shirt and merch that shoppers are looking for without redundancy.

2) They are now taking over the setting of prices in the marketplace for the shopowner and therefore they are dictating what the shopkeepers will receive as a commission - which is 10% of the final retail price. Although this may seem like a decent amount, in the grand scheme of things it is not... and it is a slap in the face to shop owners who are barely making that much money as is... Therefore I sent them a letter which read:

I recently read the email sent out about the new marketplace changes and the marketplace commissioning structure and I am now an extremely upset and worried shopkeeper. I read the email, the FAQ at length, read the seller services / shop services info and read the shop pricing policy / pricing policy, and from what I understand you are cutting my commission from my normal markup (where I decide my commission) to only 10% of the price if it is sold through the marketplace? I understand that if someone buys directly through my shop I will receive the full markup, but as is, many people do not know my shop name and don't realize that buying through the marketplace gives the shopowner a much smaller commission. As a newbie shopkeeper, most of my sales are through the marketplace, and I've received decent returns on my designs thus far. However, by cutting my commission via the marketplace to a regulated 10% plus charging me a monthly fee for being a shopkeeper, it doesn't seem worth it when you have competitors like Zazzle who charge no fee whatsoever, let the shopkeeper make and control their own pricepoints, and gives the shopkeeper 7-12% extra commission based on monthly tiered structure. Yes, cafepress gives the shopowner additional extras if they sell over $100 in their own shop, but Zazzle doesn't delineate between marketplace sales and shop sales as Cafepress does.

So to get it straight, what these new terms are saying are for example:

If a shopkeeper sets the pricing on a shirt at say $5 and the value shirt is $8.99 for the base price, the price in the marketplace and on the premium shop would go up to $8.99+$5= $13.99 but instead of making $5, the shop owner only receive $1.39 because that's 10%? So not only would Cafepress make the $8.99 but they'd also make an additional $3.61 that used to be the owners commission?

PLEASE ADVISE, because from what it sounds like, this doesn't seem to be a fair way to treat clients (i.e. shopkeepers) who are making the designs, being the creative team, putting their sites together, and driving the traffic that Cafepress thrives off of. Please let me know if my understanding is wrong on this, because as is, it doesn't seem fair to spring this plan on the shopkeepers and tell them that they have less than 2 weeks to prepare to have their marketplace sales slashed by about 60%+.

I received a response from Cafepress support which confirms my suspicions... Yes, they will be basically screwing us over royal. Here's the response...

Hello,

Thank you for your email. From what I can see, you have a clear understanding of how the Marketplace will operate going forward. The Marketplace pricing change goes live on June 1, 2009, at that point the example you gave will be correct. The first check that will show this change will be in August (for June Sales).

The root of the decision to change the merchandise commission structure in the Marketplace has to do with the unique economics of running the Marketplace; they're very different from those of supplying a shop. With the marketplace we have marketing programs that drives new traffic and focus on new customer acquisition, and with shops we leave the marketing up to the shop owners and they drive their own traffic.

I know this information doesn't change things, but I hope it helps to clarify some of our reasons.

-------

In the end the Customer Service rep basically knows they are in the wrong, and is saying sorry that SK's are getting screwed left and right. Ultimately, I understand that marketing your individual site is key, but the Marketplace is another venue with a ton of exposure, in fact it's magnitude was one of the main reasons I went with CP in the first place. Without the marketplace, CP would be a lesser entity than other POD places since they charge SK's a membership fee and have exorbitant base prices. I think since I recently paid for my renewal on CP, I'll keep my designs on till my yearly fee is up, but in the mean time I'll be spending more time setting my designs up on other POD marketplaces that are more forgiving and act less like dictators.



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Old April 24th, 2009 Apr 24, 2009 1:33:37 PM -   #30 (permalink)
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Default Re: 4/22: Announcing Marketplace Changes

Quote:
In the end the Customer Service rep basically knows they are in the wrong, and is saying sorry that SK's are getting screwed left and right.
I didn't get that impression from the email you quoted from the CafePress representative.

Quote:
Without the marketplace, CP would be a lesser entity than other POD places since they charge SK's a membership fee and have exorbitant base prices.
I'm not sure that's really true. Most of the pricing is pretty similar across the various POD places.

Again, I'd ask:

Quote:
Originally Posted by Rodney
How I personally see the issue: CafePress is spending a lot of money to advertise the marketplace and send sales to shopkeepers. This money has to come from somewhere. It isn't covered by the base price and it isn't covered by the premium shop fee (both of those were calculated before the marketplace ever existed).

The question then is: Where should the money come from to keep driving those sales?
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