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Home » News, Websites & Tools » CafePress Virtually Lays Off Thousands of Shopkeepers

CafePress Virtually Lays Off Thousands of Shopkeepers


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Posted on Thursday, April 23rd, 2009 at 11:37 am CET

CafePress, the world’s leading print-on-demand service, announced a major change yesterday that will have a huge negative impact on its huge community shopkeepers that manage over 6 million shops.

Since 1999, people can upload their designs on CafePress and sell them on t-shirts, stickers, buttons and many other products. The designer determines the price of the product and thus the commission they will earn when the product sells. When someone orders one of your products, CafePress will kick into gear by printing your design and sending it to the customer. The shopkeeper gets the commission. CafePress also has a marketplace where everyone’s designs can be found (if opted in). For many shopkeepers most of their sales come through the marketplace, as CafePress spends a lot of money on advertising and their pages rank very high in search engines.

What CafePress announced yesterday that is making everyone very mad is that they will fix all prices in their marketplace and give shopkeepers only 10% of the final retail price. 10% is very low, as some shopkeepers have markups of as high as 30% to 40% to make a living. If in the past a t-shirt had a base price of $15 and the shopkeeper decided to have a $5 markup the t-shirt will sell for $20 and the shopkeeper will get $5. In the new scheme CafePress will be able to determine the retail price of all products in their marketplace and give the shopkeeper only 10%. So if they decide to sell the t-shirt for $18, the shopkeeper will get only $1.80. That is a huge cut in earnings.

In the summer of 2008, CafePress already made some unpopular changes to their volume bonus scheme that resulted in shopkeepers’ income to drop 20% to 30%. As a result of that change some shopkeepers already left CafePress and moved their designs to other print-on-demand sites, like Zazzle or Skreened. This week’s announced change will cut another 50% to 80% off people’s income. This has hundreds of people enraged on CafePress’ forums.

Many shopkeepers have built up a business on CafePress that allowed them to quit their day jobs and work on CafePress full-time. A lot of these people will now be forced to find other jobs in a time when jobs are scarce. There are also people who have managed to make a living off CafePress because their illness prevented them from working out of the house. They are also screwed. Others were laid off from their job and are using CafePress to make some extra money. Thousands of others are relying on CafePress to supplement their income besides their other job(s). For all these people their CafePress income pays for their mortgage, bills and children’s educations. A sudden cute of 50% to 80% in income is outrageous.

There are countless charity shops on CafePress run by people that donate some of their earnings to charity. For instance someone may sell a $2 bumper sticker for $15 and donate $13 to a cancer charity. In this new scheme CafePress may only sell the bumper sticker for $3 and the shopkeeper gets $0.30. This will result in charities getting a lot less money.

It is not only an immoral and greedy business decision, it also doesn’t make any sense from every other perspective. CafePress’ entire community is built on the premise that shopkeepers own their own designs and can determine the markup. Some people just put simple text on their t-shirts and sell them with a low markup. Other designers get expensive graphics software, buy fonts and spend hours or days to make an elaborate design. It makes no sense whatsoever to fix prices on all these designs and to lower people’s markup to 10%.

CafePress argues that shopkeepers can still determine pricing in their own stores, but how can shopkeepers compete with lower prices in the CafePress marketplace, which ranks much higher in Google. CafePress argues that “the traffic in the CafePress Marketplace is a different from the traffic Shopkeepers drive to their shops and buyers rarely jump from one to the other,” but buyers will soon figure out that if they see something they want to buy in a CafePress shop all they have to do is go to the CafePress marketplace and get it cheaper.

Even affiliates make 15% on every sale they send to CafePress. What this means is that the person who created the design and owns the copyright and spent time making the design with his own software and wrote the SEO description and keywords will now get only 10% for a sale, while an affiliate who only made a link to the design from his site will get 15%.

If CP is smart they will revert this planned change. Many big shopkeepers, who work on CafePress full-time and depend on the income to pay their bills cannot afford the 50% to 80% pay cut. CafePress’ announcement yesterday was the equivalent of laying off thousands of people. Many of these successful shopkeepers have already announced that they will close their CP stores and move to other PODs like Zazzle. If CP goes ahead with this change it will be the end of CafePress.

Comments

Apr 23, 2009
1:29 pm
#1 Andrew Shaffer wrote:

The new 10% commission is an insult to the artists/shopkeepers who have helped you grow to your current size. For most shopkeepers, this is equivalent to a 50-80% paycut. Affiliates make 15%. Will Cafepress be able to survive the defection of its most talented shopkeepers? Undoubtedly, the answer is “yes”–and that’s unfortunate.

Apr 23, 2009
1:30 pm
#2 Kiwi wrote:

Ahh.. why’d they have to do this? This is going to be a tremendous amount of work to transfer PODs. It benefits no one. I agree, this is suicide for CP, I can’t see a single way this will help them.

Apr 23, 2009
3:29 pm
#3 miles57 wrote:

Undoubtedly CP has something else up their sleeve here and we won’t find out for awhile yet. Who knows, they may have signed a big fat contract to team up with some heavy-hitter entity/entities to sell their stuff. Or maybe they’ve recruited a bunch of designers(?) from some third world country to crank out junk for nothing and they want to make room in the Marketplace for their own stuff. The recent portals for Earth Day, etc are a prelude to something bigger, you can be sure. Stay tuned for more to come…

Apr 23, 2009
5:26 pm

I can’t believe that Cafe Press are doing such a thing in a time like this.

I agree with you, Cafe Press are going to get bad Karma because of this and I wouldn’t be surprised if they go down and announce a facebook-esque redesign of their pricing structure.

Apr 23, 2009
8:41 pm
#5 Rowan wrote:

Luckily there are heaps of other PODs out there. Maybe they don’t get the custom that CP does at the moment but that will change as more of the successful shopkeepers move over.

There are some promising newcomers on podreviews.info I think people should give them as go as well as having their main shops in the big ones such as Zazzle.

Apr 24, 2009
1:43 pm
#6 E-Shirt.com wrote:

In light of recent unpopular changes made by CafePress(tm) (1), we would like to extend CafePress Store Owners warm welcome to E-Shirt.com (http://e-shirt.com).
At E-Shirt.com, we will continue to let you set the markup price for your designs both in our marketplace, and throughout our retail channels. So, not only are most of our product wholesale prices significantly lower than CafePress(tm)(2), but now you can make significantly more on each and every sale of your design, even in our marketplace.

Compare two identical sales:
One-sided White T-Shirt Design price set by store owner at $22.99 in the CafePress(tm) or E-Shirt Marketplaces (3):
Your CafePress Profit: $17.99*10% = $1.80
Your E-Shirt Profit: $22.99 – $13.95 = $9.04

You don’t have to be a Rocket Scientist to see many people have already moved over to E-Shirt.com It all adds up to what we call the E-Shirt.com difference. Come and see for yourself.

(1) Refers to announcements made on April 22, 2009 (http://announcements.cafepress.com/?p=167)
(2) Tee (cp:$17.99, e-shirt:$13.95), Womens Tee (cp:$17.99, e-shirt:$13.95), Dark Tee (cp:$18.99, e-shirt:$16.95), Womens Tank (CP: $16.99, e-shirt:$13.95), Womens Dark (cp:$19.99, e-shirt:$18.95), Dark Long Sleeve Tee (cp:$23.99, e-shirt:$22.95), Dark Sweatshirt (cp:$29.99, e-shirt:$28.95)
(3) Calculated using current CafePress and E-Shirt wholesale prices, and statement made by Cafepress (1).

Apr 26, 2009
12:13 am
#7 Damian wrote:

This guy knows exactly what’s going on with CafePress.
Arthur are you a sopkeeper?

Apr 26, 2009
5:56 pm
#8 me wrote:

You’re right, Arthur. Not only are a lot of SKs (like me) leaving CP and taking our designs to a competitor, but the fury this ridiculous and unfair decision has caused spells serious trouble for CP’s future.

Apr 26, 2009
6:01 pm
#9 Wolfstad wrote:

@Damian: Yes, I’m a shopkeeper

Apr 28, 2009
3:59 am
#10 Caza Creations wrote:

I am one of the ones who has decided to close my shop at the end of the year instead of renewing my subscription. My shop wasn’t a major money maker so it makes sense for me to close it and the decision is not as hard as for some of the big money makers that will be hit hardest. I have already signed on with a new POD and hope everyone else can do the same.

May 18, 2009
8:25 pm
#11 balbuster wrote:

I think it is very rotten that after luring the finest artist and web designers and creative people make cafepress the most successful bussiness in the POD industry only to get greedy and screw the great shopkeepers with their offer of crumbs when they should get 3/4 of the cup cake. Shame on CP!
Spread the word.. If you are a shopkeeper take your avitar in the forums on CP and turn them backwards as to not face this company of cowards.

I send best wishes to my fellow shopkeepers…. Now let’s ban together and close down CP one shop at a time… If they want to outsource let them do it but don’t forgert to take your designs with you.. leave them nothing like they left you!

Jun 3, 2009
1:41 pm
#12 Goyito wrote:

Last year I earned $28,500 in commissions from CafePress. Had they not unilaterally changed the volume bonus program, I would have earned another $5,000, for a total of $33,500.

As of June 1, shirts that I used to earn 5 bucks apiece by selling are now making me a lousy 2 bucks each. The difference is even worse on small price items such as buttons and bumper stickers.

As a company, CP has the right to make business decisions that are in its best interest. As an independent designer, so do I. As soon as I have moved my designs to Zazzle.com I will make them unavailable via the CafePress marketplace. I am absolutely disgusted at the way I and other shopkeepers/designers have been treated. CafePress has acted in a highly offensive, unethical manner. The hell with them.

Aug 2, 2009
1:58 am
#13 Anne wrote:

I am outraged. I see CP is not budging on all these protests. If there were only someway to contact every affected shopkeeper and have them hide (not close) their shops on a specific date for 1 week, what would CP do?
Kind of like an online strike.
I wrote to customer service who replied I am very sorry we will forward this to the marketplace people. They even gave me an email. But have I heard anything from them? Of course not.

Aug 20, 2009
3:04 pm
#14 Katie Fox wrote:

Hi Arthur!

I am reaching out to you today as we respect your influence in the POD community and feel that we have something remarkable which could be of interest to you and your audience.

The makers Sellit.com are proud to announce AdPAKs, the latest in our suite of solutions for online merchants. Shop owners can now instantly turn their mini-shops created with Sellit into interactive advertisements which are distributed and displayed across the web. This product was designed for shop owners seeking an easy way to increase exposure for their products and services, improve customer interaction and drive new traffic to existing online shops.

Sellit is a social media marketing platform that enables online merchants to drive significantly more traffic to their stores than by traditional marketing/advertising methods. The platform enables users to turn their storefronts into mini-shops that can be distributed across the Web, advertise their mini-shop in an innovative and more effective way, and broadcast across all social media through one interface. The platform takes minutes to set up and is now available to CafePress Shopkeepers.

If you are interested or would like more information, great! Please see our official press release…
http://ecommwire.com/?id=20510&keys=advertising-marketing-cafepress
…and feel free to check Sellit out for yourself.

If we do not hear back from you, we promise to follow up only one time and if you do not respond, we’ll leave you alone ; )

Thank you for your time and feel free to reach out for any further info.
Katie

Sep 7, 2009
11:13 pm
#15 John wrote:

Wow, I am overwhelmingly disappointed in Cafepress. As a professional designer, I used to recommend them to clients, non-profits, schools, businesses, etc, as a great way to help their causes. Can’t do that anymore (at least with good conscience). In fact, I just designed a website for a company and recommended CP to them. This week, I will strongly urge against it — it’s just not worth it anymore.
On the one hand, I understand this is a difficult economy and business have been forced to become extremely crafty about gathering every penny to stay afloat. However, the latest changes seem so unlike Cafepress. I have had 2 shops with them from the time they started. Usually, there is a consideration and respect for store owners/designers, and the people they hire always seemed to have a high level of professional standards. That said, I’m not sure I understand the context of the recent changes (unless, perhaps, there has been a new wave of management).
For myself, I felt the gutting of my sales recently. It used to be that the yearly fee for 2 shops was waaay more than easily covered with my sales. Now, I honestly make what seems to be pennies compared to what I did before. I never had to ask myself if it was worth it to have a shop, but now I do. With the recent changes, it’s almost like I’m *paying them* to do whatever they decide to with my designs. On that note, I’m surprised that there hasn’t been more uproar about the recent assertion that they can alter the color, etc, of your design for printing purposes. The writing in that clause seemed fairly vague to me and rather over-reaching.
It simply does *not* make good business sense to me to pay a yearly fee to have a shop where I have less and less control over my designs and the amount of profit they generate in order to be included in an over-saturated “Marketplace.” To be frank, it is wiser to take the time and effort involved in putting an image on CP products and use it, instead, to submit your designs for some products at stationary companies, at Target, at Papyrus, etc. You would actually stand to make more money worth your time on licensing or payment of usage for your designs. The original Cafepress spirit of empowering independent design and entrepreneurialism seems to be gone. Right now, no designer in their right mind would agree to these sweatshop-like terms of engagement.
And yes, I understand it is their “Marketplace”, they pay for ad words to advertise the designs, they pay for production and distribution and most likely a host of other business costs that go unmentioned; however, the scales have tipped far too much. I predict that a host of people who pay the premium yearly store rate will take a huge hit in sales from this and consider closing their stores like I am. They will go elsewhere as their profitability hugely drops. The “Marketplace” will become over-saturated with crappy designs and stores because no decent designers will take CP seriously as a business partner. There are so many more options out there worth one’s time.
I honestly miss the old Cafepress. Whoever thought up this crappy idea must be patting themselves on the back as the new profits have been flooding in, but the embers of disappointment on the web regarding these changes are turning into a wildfire. It used to be that you could barely find a complaint in cyberspace about CP, but not any more. I’m so sad to say that I am taking my business and designs elsewhere. You broke my heart CP; now I have to break up with you.

Feb 7, 2010
11:21 pm
#16 alix wrote:

hmmmm. well I can tell you where they plan to get new and creative artists and designers. I got a coupon for a free premium store for 5 years , (when I purchased a new intuos Wacom tablet) .. I’ve been happily uploading my designs… that is.. until I started reading all these postings from upset shopkeepers…. but, yes all the new WAcom Tablets are shipping with FREE STORE coupons.. (that’s their plan…) it pulled me in… hmm. maybe I will check out Zazzle, as I like the idea of a store….

Trackbacks to this post. Thanks for the linkage.

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