CafePress Announces Big Price Hikes for Buyers, Big Commission Cuts for Sellers
CafePress may try to dress up today’s announcement with a barrel full of hand waving, a slapdash cloudiness of vocabulary and a few other mixed metaphors’ worth of dazzling PR-speak, but what their news release all boils down to is this:
1. Come June 1, the print-on-demand corporation CafePress will increase the prices shoppers pay for its shirts and other gear.
2. Come June 1, CafePress will decrease the commissions paid to the sellers who make designs available on CafePress products, especially on non-apparel items.
3. Starting now but especially after June 1, CafePress will work to undercut designers who maintain their own shops and also sell on CafePress’ “marketplace” search engine.
The result: less independence for designers who work through CafePress and a greater profit margin for the CafePress corporation.
These are strong claims, so let me back them up.
CafePress will increase prices shoppers pay.
A simple comparison of the few examples CafePress reveals in today’s announcement to designers reveals a consistent trend toward price increases. In the system CafePress works by now, CafePress sets a “base price” and a shopkeeper adds a “markup” for every item. For example, our made-in-the-USA I Am Not A Second Class Citizen T-Shirt has a base price of $21.99 (reflecting a hefty markup for CafePress above the wholesale price it pays for the shirt). We’ve added a markup of $2.51 for each shirt, and that makes the retail price for the buyer $24.50.
Here are some base prices for five items CafePress sells:
Men’s Light T-Shirt: $14.99
Women’s Zip Hoodie: $34.99
Keepsake Box: $19.99
Small Mug: $10.99
Large Poster: $17.99
In the new system, if a designer chooses to sell on a traditional static html “shop” page she or he maintains and promotes (like www.cafepress.com/irregulargoods), she or he can continue to set prices like before. But if she or he makes merchandise with his or her designs available on CafePress’s search engine and own set of dynamic web pages (what CafePress calls its “marketplace”), retail prices will be set by a central committee at CafePress (making the “marketplace” less of a real market). Designers won’t be able to set a markup — they will earn a 10% commission off the retail price instead.
Here is the new, higher retail price range CafePress mentions today for five example products:
Men’s Light T-Shirt: $20.00 – $25.00
Women’s Zip Hoodie: $35.00 – $40.00
Keepsake Box: $22.00 – $28.00
Small Mug: $12.00 – $18.00
Large Poster: $18.00 – $25.00
If shirt retail prices rise $5-$10 (as indicated by the example of the light t-shirt), then for shopkeepers like us who markup by $2.51, or even for shopkeepers like Green Gecko who markup by $4.00, the result will be a retail price increase for shoppers.
CafePress will decrease the marketplace commission paid out to designers, especially for non-apparel items.
When it comes to shirt sales, people who add a low markup won’t see much change in commission: if the retail price for a dark made-in-the-usa shirt goes up to $25, we would still see a $2.50 commission, a mere decrease of a penny. But designers like Green Gecko, who currently add a markup of $4.00 or more (look it up for yourself, you’ll see these folks are more common), will see a decrease in their commission.
The effect is much more pronounced for items with a low base price. Buttons sold through CafePress currently have a base price of $2.99, and shopkeepers usually add $1-2 in markup for their profit. (We add $0.96, but psssst… we also produce our own buttons of exactly the same size for $2.95 including shipping and handling.) If CafePress sets its no-negotiation retail price for buttons in its “marketplace” at $3.95 (you think this includes shipping and handling, by the way? Think again: delivery at the speed of first-class mail will cost you another $7.00), that gives designers a much-lower profit of 40 cents, while CafePress rakes in more profit.
CafePress will undercut designers who sell on the marketplace and on their own shop.
In its announcement, CafePress has declared its intention to stop linking to designers’ shops from the marketplace pages displaying an item. This makes no sense from the buyer’s point of view, who may want to buy similar items from the same designer. It also doesn’t help the individual designer, obviously, since as discussed above she or he stands to make more profit from his or her own shop. But it does make sense for CafePress… if it is interested in taking shoppers’ traffic away from designers’ shops and onto the price-controlled marketplace.
Designers of items that sell on both their own shops and the new marketplace will find themselves in a fix. On the one hand, bumper stickers will have to retail for $10 on the marketplace in order for designers to make as much profit per sale as before. On the other hand, if CafePress doesn’t raise the retail price of its bumper sticker exorbitantly — say, to $3.49, designers could find the marketplace version of their item out-competing the shop version of their item… and producing more profit for CafePress and less profit for the designer. The shops are undercut by the marketplace, inducing designer/shopkeepers to lower their prices on their shops, again with the result of lower profit for designers.
I’m not making a moral case here that CafePress is a bad corporation that must be spanked for its naughty behavior. Corporations are built to squeeze people — it’s not good or bad of them, because corporations have no souls. This is just what they do, and the CafePress corporation is doing what it’s doing for a reason — most likely (despite CafePress’ oblique protests to the sort-of-contrary) because its sales are way, way down and it’s looking for a way out of its own hard times. Screaming at the unfairness, the injustice of it all won’t accomplish much, because despite its VW-bus ad copy the CafePress corporation is not organized around principles of fairness or justice.
I’m making a practical case directed primarily at designers for CafePress, and here is the case’s conclusion:
If you are a designer for CafePress who is dependent on the marketplace model, then well, chum, you’re out of luck, at least until you find a way to become independent of the CafePress marketplace.
The best way to become independent is to maintain a website that has something to do with more than selling things with pictures printed on them, a website that has to do with matters you care about. People who care about the same matters but are not interested in buying things with pictures printed on them will visit your website, and they’ll talk to you, and you’ll talk back, and you’ll have a good time. People who care about the same things you do and who also want to get a thing with a picture printed on it will find you and make a purchase through links from your web page. It’s a no-pressure way of making a living connected to things you care about, and I for one really like it.
If you are a designer for CafePress who is not dependent on the marketplace model, then there’s really no more reason for you to put your product on the marketplace. It’s turned from an enabling tool to an exploitive tool, and who wants to be exploited any more than necessary?
Independent shopkeepers, consider withdrawing your products from the marketplace. The next time our kids give us an hour or two of free time, we here at Irregular Times certainly will. I don’t expect many people to follow suit, because independence is a bit scary to most people, but I do think it would be in many designers’ best interest. If enough people do follow suit, then the highly controlled marketplace CafePress has fashioned may collapse on account of its own emptiness.
P.S. If you’re looking for another print on demand service that is respectful of designers, that gives you control, and that has an ethical focus, give Skreened a look. Nobody paid me to mention these folks… they are just that spiffy.