If you are a CafePress user, you have most likely received an email informing you that CafePress no longer trusts you to decide how much your design is worth. They sent out an email last week explaining that they will no longer be allowing you to set your own prices if your design is sold through their marketplace. All marketplace products will be priced the same; no difference in price between designs that took several days to create and designs that took several minutes to create. If a customer goes directly to your shop however, you will still be able to set your own commission (a markup from a base price).
Shopkeepers will now only receive a commission of 10% of the retail price for sales that are tracked as being from the marketplace. If you are unfamiliar with CafePress, their “marketplace” is basically an internal search engine that indexes all the designs and products in CafePress.
So what? Why does this matter?
Let me run through a scenario. Take a shop that makes 10 sales per month and has a markup of $5 per product. The average price of a shirt with a $5 markup will put the retail price around $20. Now let’s say all of the sales are through the marketplace. If CafePress decides that $20 is still a good price, then the shopkeeper will only get $2.00 per sale instead of $5.00 per sale. This is 60% less for the EXACT SAME PRICE and product.
In essence, CafePress has decided to TAX its users for the use of its search engine. They already get paid a monthly fee if a shopkeeper wants to host more than 1 design on their shop, and they already get paid a base price for each product.
What they could have done is still instituted the equal pricing if that was so important to them, but allowed all the price above the base price to flow to the designer, and 10% if CafePress used the base price without a markup in their marketplace. Even though you would still end up with the minute designs being priced the same as the day designs, at least it wouldn’t be taking their own cut of the commission.
What does this mean?
A lot of things could happen.
- First, designers who spend more than a couple minutes on a design might decide it is no longer worth it. That design if sold through the marketplace would only yield $1 or $2 instead of $5 - $10. The incentive to produce high quality designs is diminished. It creates a volume vs. quality decision, with an emphasis on volume due to the need to sell 5 times as many products to achieve the prior result. Take my custom new Artist designs for instance. They are priced at $100 because the artist spent a lot of time on them and they rock. Allowing the marketplace to charge a minimal amount would dilute his brand image. Those designs will most likely be taken down once the change hits.
- Second, it puts a lot more weight on marketing your own shop. The biggest problem with that though is if the sale will actually be counted correctly or not. Since a full commission will only be received from a direct link to your shop, it forces you to go out and promote your shop if you want those results. It also forces you to trust that the sale will be recorded correctly.
- Third, there is much less incentive to actually “tag” your designs correctly. Tagging is the way CafePress indexes a design. Tags are essentially keywords associated with a design. Given the dynamics of tagging, it now makes more sense to insert as many tags as possible in order to be placed in more search results. This effectively reduces the quality of the search results. So on top of relevant tags, it now makes sense to max out the number of tags with other highly searched keywords. Increasing viewership of your design in the marketplace is now the name of the game with the tags.
- Fourth, if you already have a successful marketing campaign and rarely get sales from the marketplace, it now decreases the incentive to bother tagging in the first place. The time it takes to derive tags and type those in for each design as you load them can be better spent marketing your products. Writing out a standard set of high volume keywords for your tags and saving that in a file to insert as you upload is now a much better value proposition. That of course will diminish the results in a marketplace search though as the results they pull up will no longer be as relevant.
- They are essentially forcing all shopkeepers to compete against THEMSELVES. That's right you are now your own competition. Take one of my designs for instance. "That's Blogalicious" I did a marketplace search just now for that phrase and my shop was the only result. This means that if I send a customer to my shop, all they have to do is search the marketplace and they can buy the exact same product at possibly a slightly better price and I will then lose out on the bulk of the commission. Or, conversly, if they decide to see if they can find a better price in the marketplace and my price is the same as that price, and they buy after doing the marketplace search, I am out the majority of the commission. It won't take long for customers to figure this out that the marketplace has lower prices. Thus even those shopkeepers with great marketing in place will see their commissions cut as well. The transaction could go like this. Shopkeeper sends a customer to their shop, customer sees a product he/she likes. Customer then searches the CafePress marketplace for that specific design, and if they see it quickly they will see that the price is a little lower. They will now purchase through that, and save the dollar or two. The shopkeeper will only get about $1 of the sale instead of the $3- $5 they would have normally received.
Basically a losing situation for the shopkeepers, and a long-term quality and shopkeeper retention losing situation for CafePress. I am all for the free market approach though, and if you aren't happy with something you simply leave. I am currently weighing that option - deciding if the expected $10/month will be worth even continuing to maintain a shop. We will see come June 30 (the change over will happen June 1). Have I contacted CafePress to voice my concerns? No, I don't believe that ever gets anywhere with many companies, so have opted to write my opinions elsewhere.
If you want to learn how to create a CafePress shop, step-by-step, you can visit my
From Pink Slip website. You should know though, that I am most likely going to move on to another Print-On-Demand instruction set here soon (perfect time to start following though right?).
This has been a lesson on how to take advantage of your userbase. Once you get to some magic number of traffic, you are apparently allowed to stuff it to your users since they don't have another venue to go to. The problem is that it forces them to start looking for one. So this is in effect also a lesson on timing - if you have comparable options, you can grab a huge amount of users/customers simply by marketing to them and asking them to come over. Zazzle, Printfection, and others should be chomping at the bit for these users who are now looking for other options.
BenBlogmaster General
