Cafepress restructures Volume Bonus program.

Posted by blipfish

Jul 23

Cafepress.com announced it will restructure the Volume Bonus program as of August 1, 2008.

Highlights include:

Sales originated from shops will earn larger bonuses at lower thresholds

Sales originating from the Marketplace will no longer qualify for a Volume Bonus – you will continue to receive your mark-up as your commission

Shopkeepers will no longer pay the 20% fees on affiliate-driven sales – CafePress will pay this fee

The “Sales Source” is being redefined: Credit for a sale will now be based on where the item is added to the cart

The Volume Bonus program will be renamed Shop Performance Bonus

There’s good, bad, and indifferent for this – in my eyes. However, I’m surprised it didn’t happen earlier as it’s a perfectly normal practice to create an incentive-drive to gain customers (in this case – shopkeepers who fit into the equation for CP making money) and, when a strong customer-base is established make a shift from incentive-based drives to advertising-based drives. Without any inside-information: I’m taking an educated guess this is what has happened. Like I said, though, my educated guess was made some time ago this would occur and now it has. Combine this possibility with the ever-rising cost of advertising and it’s not hard to imagine that the cost and effectiveness that were advantageous even a year ago are now less-so. Money spent then may be better spent differently now. You think our costs with Google, for example, alone are expensive? Imagine the broad-sweep advertising expenses companies like Cafepress must incur and they don’t even get the advantage we can have in niche marketing efforts.

I know some people will take this as a personal slap but if you know anything about business… it’s a known process. One may or may not like it but it’s a known-routine… hardly a personal afront.

Here’s the bad:

There’s a strata of base-price sales that now make significantly less in VB than before.

The good:

There’s a strata of base-price sales that now make significantly more in VB than before.

As with any business model – those who adapt can overcome. Those who can’t – sink.

Here’s my suggestion: The most likely affected shopkeepers will do well to adjust from pimping the marketplace to following advice from those who’ve done this thing old-school: Market your own business – build your own business – get your own customer base.

The volume bonus was a bonus and it hasn’t always been around yet some of the most successful shopkeepers were (and continue to be) successful beyond the marketplace ups and downs… including an understandably welcomed bonus.

CP’s marketplace and VB are fine and dandy (well, the MP can be a nightmare some days but you know what I mean). I can’t bash on them for what they are or what they try to be. However, I have a hard time relying on that external system of sales. I’ve always felt it best to get a customer base of your own, outside of someone else’s enclosed system.

I wish everyone good luck in adapting and succeeding from this major change. I’m confident that the business models and manners in which many will now have to conduct business will be more solid, long-lasting ones that can endure changes such as this. Everything changes – nothing stays the same.

Filed under: From the desk of blipfish

4 comments

Comment by Freebird on August 17, 2008 at 1:13 am

I just calculated that my profits will go down by 22.5% if next year’s sales are identical to this year’s. If my shop continues to grow (which it will) the profits will be down even more than 22.5%. I currently get less than 5% of my sales from my shop (used to be more) – over 95% are from the Marketplace (thanks to CafePress promoting their Marketplace so heavily). Thanks for stealing almost a quarter of my profits, CafePress. I will now be diversifying my items to Zazzle and Printfection so I don’t rely so heavily on profits from one POD source. Screw you, CafePress – you’ve definitely screwed me.
Comment by Kathy on August 27, 2008 at 2:48 pm

Jeez, people are acting like CP OWES them this bonus. It’s a bonus – you know, something extra. You’ll still get your commission on marketplace sales, which is the original deal when you open a shop. We all need to work on getting our own customers.
Comment by blipfish on August 29, 2008 at 7:52 pm

“We all need to work on getting our own customers.”
~Kathy

…to me – that says it all.
Comment by Linkin on June 24, 2009 at 6:13 am

In June 2009, CafePress began competing with the artists for whom it acts as printer and shipper.

CafePress rents web shops to its artists. The artist creates a website page and manually loads the desired blank products. The artist imports his image onto each product, arranges the products on the page, describes the products, titles the products and tags the images.

Initially, the artist would set a markup and received the markup for each product sold.

However, recently CafePress began competing with its artists, using the artists’ own images. CafePress created a marketplace where a customer can search a keyword. That search brings up artist products. When the customer buys from the marketplace CafePress pays the artist 10% of the price CafePress set. Both the customer and the artist lose money. If the artist’s shop sells a t-shirt for $21, the artist makes $3.01. If the marketplace sells the same shirt for $25, the artist gets $2.50. The customer pays $4 more, and the artist gets $0.51 less.

CafePress tells artists to “promote your own shop,” but CafePress buys Google adwords using the very image tags the artist provided.

CafePress justifies this bait and switch of service terms by telling artists they can opt out if they don’t like the new terms; however, many have spent as much as 7 or 8 years creating as many as 88000 images.

In spite of their sweat-equity, many shopkeepers (content providers) are building shops at other print-on-demand companies and then closing their CafePress shops due to the broken faith and trust, the financial hardship CafePress has delivered into so many lives, and the huge amount of time and dedicated effort all lost in the momentum of their own businesses. Would you keep your AMOCO station franchise if AMOCO built a company store across the street from you?