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Author Topic: Change in Commission Structure for *ALL* 123RF.com Contributors  (Read 49229 times)

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« Reply #325 on: February 18, 2012, 18:08 »
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After some dwelling and ruminating on this issue, I'm completely failing to see any logical relationship between these two proposals.

The first one read to me like a very reasonable 'carrot' for under-performing contributors to push through a big influx of images before the deadline to continue to enjoy their 50% cut, with a slow and gradual increase in 123RF's 'take' over time from newer contributors who haven't contributed to their success to date.

The second reads like a 'stick' to beat almost all contributors with, as if 123rf will fall down if it doesn't hugely increase it's cut from our work.

I can't make any sense of how 'A' became 'B' in this scenario. 

..and for them to change from plan A (small ports) to plan B (all) within just a few weeks. Plan A wasn't even implemented yet. I think we could all guess (I know I did) that plan B was coming, but heck I was expecting a year or two, even maybe 3. I think it's not just the commission cuts that annoy people here but the way it was done. It makes them look Fly by.


« Reply #326 on: February 18, 2012, 19:49 »
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the coolest thing is that many contributors think that we are the ones to blame! :D

when we know there is only one thing here, which I wont repeat again..

« Reply #327 on: February 19, 2012, 13:57 »
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This is an excellent post that brings up a very important question that needs to be answered.  Are we eating the cost of discounts offered to buyers?  Add the discount to our commissions and we are in very bad shape here.  I am mad at myself for trusting the hype and ignoring my gut feeling on this site.  I have no reason to upload new images to 123rf considering they probably wont be reviewed until the changes take place anyway.

You can bs us all you want.  I sure hope you arent bs'ing yourself too.

Another unhappy contributor here.

One thing that hasn't been touched on much is that the 123RF commission % is based on the price the buyer paid for the credits and not based on 1 credit = $1.

It appears that 123RF seems to quite heavily discount their credit packages.

From a quick review of my last 100 credit sales, 308 credits were required for their purchase.

One would assume that at a 50% royalty that the commission would be close to $154, however the actual commission received was actually $126.

This represents an average credit discount of 18% given by 123RF to its buyers, which takes a substantial chunk out of our commission earnings.

I have had some XXL and XXL TIFF sales where the discount that 123RF must have given to the buyer is close to 60%.

Based on an average discount of 18% (from review of my last 100 credit sales) our sales are currently already being sold at what is effectively a percentage much lower than 50%, by hiding it behind buyer credit discounts.

If 123Rf are planning to increase sales dramatically as Alex says, how much of that is going to be at the cost of the contributor, by large credit discounts to buyers, even before they cut the commissions.

The proposed cut in commissions coupled with the fact that our dollars received are often based on substantial buyer credit discounts is just one step too far.

Alex if you are out there, I would like to here your reply to this.

« Reply #328 on: February 19, 2012, 14:25 »
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Still waiting for the reply to this question:

Why a sale from a big contributor is more valuable than a sale from a smaller one, when for the buyer each image is the best one for their project and don't care for the name of the photographer. And you even charge the same for each image!

Please explain to me why a niche contributor who has a unique collection, which doesn't sell thousands of photos per month but is the only one supplying that type of imagery, should accept the commission cut when it's you who are privileged to have those photos in the first place?!

These are excellent questions, I wish they would answer these. But I'm almost sure they won't because they haven't got any good answers.

« Reply #329 on: February 21, 2012, 10:43 »
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I just started contributing to 123 .... and with the mention of 'royalty credits', I just stopped.

« Reply #330 on: February 21, 2012, 13:36 »
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Imagine you open a store and 100 vendors sign up to supply you with products.

After a few years, it's clear to you that 20 of those vendors are supplying products that fly off the shelves, and the other 80 are giving you products that don't sell very well, and frankly, are taking up space on the shelves.   If you could put more products from those 20 high-selling vendors front-and-center in front of your customers, you would probably sell more.  You could make your store larger and larger to treat every vendor the same and give everyone equal shelf space, but your customers would get lost, and the shopping experience would become maddening, sending them elsewhere.

So you decide to sweeten your financial arrangements with your 20 best selling vendors and make the deal less financially attractive for the other 80.  The end result is that the 20 best sellers give you more and more stuff since you strengthened those relationships, and a number of the other 80 decide to stop supplying you.  You're OK with this, since their products weren't bringing in customers, and the extra shelf space makes more room for the additional products from the top sellers.

And before the obvious is pointed out, yes, a physical store is very different from an online store... one has a fixed amount of space for products and one has infinite space.  BUT... as a buyer, wouldn't you rather be presented with 100 great results than 10,000 -- some great but many more just OK?  Looking at it like that, I think the analogy holds up.

Frankly, where the analogy truly breaks down is here... if you were the store owner in this scenario, you simply wouldn't carry the stuff that doesn't sell.  Those non-selling vendors would be history.
« Last Edit: February 21, 2012, 13:40 by stockmarketer »

« Reply #331 on: February 21, 2012, 13:47 »
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Imagine you open a store and 100 vendors sign up to supply you with products.

After a few years, it's clear to you that 20 of those vendors are supplying products that fly off the shelves, and the other 80 are giving you products that don't sell very well, and frankly, are taking up space on the shelves.   If you could put more products from those 20 high-selling vendors front-and-center in front of your customers, you would probably sell more.  You could make your store larger and larger to treat every vendor the same and give everyone equal shelf space, but your customers would get lost, and the shopping experience would become maddening, sending them elsewhere.

So you decide to sweeten your financial arrangements with your 20 best selling vendors and make the deal less financially attractive for the other 80.  The end result is that the 20 best sellers give you more and more stuff since you strengthened those relationships, and a number of the other 80 decide to stop supplying you.  You're OK with this, since their products weren't bringing in customers, and the extra shelf space makes more room for the additional products from the top sellers.

And before the obvious is pointed out, yes, a physical store is very different from an online store... one has a fixed amount of space for products and one has infinite space.  BUT... as a buyer, wouldn't you rather be presented with 100 great results than 10,000 -- some great but many more just OK?  Looking at it like that, I think the analogy holds up.

Frankly, where the analogy truly breaks down is here... if you were the store owner in this scenario, you simply wouldn't carry the stuff that doesn't sell.  Those non-selling vendors would be history.

As part of 80 at the end of the year i will take my thousand imagines away

lisafx

« Reply #332 on: February 21, 2012, 14:08 »
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So you decide to sweeten your financial arrangements with your 20 best selling vendors and make the deal less financially attractive for the other 80.  The end result is that the 20 best sellers give you more and more stuff since you strengthened those relationships, and a number of the other 80 decide to stop supplying you.  You're OK with this, since their products weren't bringing in customers, and the extra shelf space makes more room for the additional products from the top sellers.


This makes sense in theory.  Unfortunately, in practice, there are a few kinks.  Sites have discovered that rigging their search engines to promote the images they make the most profit on is preferable to boosting the (previous) best selling contributors.  

I am black diamond on Istock, but my stuff has been buried there, and sales have been in decline for a year or more.  Same story on Fotolia.  It's no coincidence that since the last major search engine shakeup Emeralds have reported plummeting sales, and lower ranked (lower percentage) contributors report sales are booming.  

Once 123RF figures out it can boost it's profits by pushing its lowest ranked (most profitable) artists to the front of its searches, the same thing will happen.  

The real death of this industry will be the fact that it punishes its successful suppliers in its pursuit of short-term profits.  

« Reply #333 on: February 21, 2012, 14:15 »
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I would love to hear a theory about IS cuts too :D (seriously love it)

« Reply #334 on: February 21, 2012, 14:19 »
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So you decide to sweeten your financial arrangements with your 20 best selling vendors and make the deal less financially attractive for the other 80.  The end result is that the 20 best sellers give you more and more stuff since you strengthened those relationships, and a number of the other 80 decide to stop supplying you.  You're OK with this, since their products weren't bringing in customers, and the extra shelf space makes more room for the additional products from the top sellers.


This makes sense in theory.  Unfortunately, in practice, there are a few kinks.  Sites have discovered that rigging their search engines to promote the images they make the most profit on is preferable to boosting the (previous) best selling contributors.  

I am black diamond on Istock, but my stuff has been buried there, and sales have been in decline for a year or more.  Same story on Fotolia.  It's no coincidence that since the last major search engine shakeup Emeralds have reported plummeting sales, and lower ranked (lower percentage) contributors report sales are booming.  

Once 123RF figures out it can boost it's profits by pushing its lowest ranked (most profitable) artists to the front of its searches, the same thing will happen.  

The real death of this industry will be the fact that it punishes its successful suppliers in its pursuit of short-term profits.  

I'm not sure what you describe is happening to everyone.  Some have reported this experience, but I'm not seeing it myself... sales have been steady at FT and other sites despite me being in the higher commission groups.

123RF is actually doing the opposite of what you describe... they are rewarding the top sellers.   Let's not punish them now for what they MIGHT do later, when in fact they're doing what smart business says is the right thing... recognize what sells and reward those who provide it.

From a business standpoint, I think it would be suicide for an agency to say "Here's the stuff that sells really well... I'm going to push this to the back of the shelf where it won't get seen... all because this new, untested stuff makes me two cents more on the dollar."  Yes, you should give new stuff a chance to rise up and get seen to see if customers want it, but you wouldn't bury your tried-and-true hot sellers for a quick few cents.

I know your gut says this is what's happening today on some or all of the big sites, but I don't buy it... it assumes total ineptitude on a widespread basis.  For all our complaints about the agency owners, they must know a thing or two about what their customers really want.
« Last Edit: February 21, 2012, 14:23 by stockmarketer »

« Reply #335 on: February 21, 2012, 14:25 »
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123RF is actually doing the opposite of what you describe... they are rewarding the top sellers.   Let's not punish them now for what they MIGHT do later, when in fact they're doing what smart business says is the right thing... recognize what sells and reward those who provide it.

like iStock :D

« Reply #336 on: February 21, 2012, 14:47 »
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So you decide to sweeten your financial arrangements with your 20 best selling vendors and make the deal less financially attractive for the other 80.  The end result is that the 20 best sellers give you more and more stuff since you strengthened those relationships, and a number of the other 80 decide to stop supplying you.  You're OK with this, since their products weren't bringing in customers, and the extra shelf space makes more room for the additional products from the top sellers.


This makes sense in theory.  Unfortunately, in practice, there are a few kinks.  Sites have discovered that rigging their search engines to promote the images they make the most profit on is preferable to boosting the (previous) best selling contributors.  

I am black diamond on Istock, but my stuff has been buried there, and sales have been in decline for a year or more.  Same story on Fotolia.  It's no coincidence that since the last major search engine shakeup Emeralds have reported plummeting sales, and lower ranked (lower percentage) contributors report sales are booming.  

Once 123RF figures out it can boost it's profits by pushing its lowest ranked (most profitable) artists to the front of its searches, the same thing will happen.  

The real death of this industry will be the fact that it punishes its successful suppliers in its pursuit of short-term profits.

I agree with your recap, which is why it is infuriating to see sites make these moves so that they can gather the resources needed to manipulate sales at our expense.  

I think SS is in the process of implementing this scenario as we speak. To date it does not seem that they are using their newly hired programmers to fix the serious bugs that negatively impact the folks who's hard work has helped them prosper and grow.

lisafx

« Reply #337 on: February 21, 2012, 15:15 »
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I think SS is in the process of implementing this scenario as we speak. To date it does not seem that they are using their newly hired programmers to fix the serious bugs that negatively impact the folks who's hard work has helped them prosper and grow.

Lord, I hope not.  If SS joins IS and FT in burying best-sellers, then there's really long term future in this business IMO. 

« Reply #338 on: February 21, 2012, 15:16 »
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...After a few years, it's clear to you that 20 of those vendors are supplying products that fly off the shelves, and the other 80 are giving you products that don't sell very well, and frankly, are taking up space on the shelves.   ... if you were the store owner in this scenario, you simply wouldn't carry the stuff that doesn't sell.  Those non-selling vendors would be history.

The flaw in the analogy is that the non-Yuri non-"fly off the shelves" suppliers are not providing you with the same products (ignoring for the moment that some lazy bums are just trying to copy what sells but not doing as good a job of it). The reason you want to have product from other than the 20 vendors who sell in high volume is that you want to serve the full range of buyer's image needs which will often mean one of the happy-smiling-standard stock images and sometimes mean a shot of a fish market in a small town or a landmark in a particular tourist destination, or...

There are several places you can read about how fed up buyers are with the look-alike sameness of what they can now buy as stock. Dump the 80 "non-sellers" from your mythical store and you'll speed up the process of buyers finding somewhere else to shop because they can't get what they want from you.

123rf is rewarding the volume sellers. Saying "top" suggests other good attributes beyond sales volume. There's tons of quality stuff that doesn't sell in volume (like almost all of Getty's top end RM content). Mass market sellers (which are generally of highest technical quality; I'm not suggesting they're not a quality product) that look like they came from where they did - a factory - probably won't last very long as a business strategy. So possibly in the long run 123rf dumping those of us in the 80 group is really doing us a favor by forcing us to find other outlets?

« Reply #339 on: February 21, 2012, 17:14 »
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The idea of rewarding top contributors is not that controversial or new. Honestly 123RF is more punishing non top contributors though.

Also the store analogy is possibly somewhat apt, but missing something critical. Many stores open w/ new items and do well at first, but at some point a bean counter realizes that it is the normal boring items that actually make the most $, so they gradually devote more and more shelf space to those items. At some point they pass a tipping point and there are no longer the niche interesting items that actually bring customers into the store because they might as well just go to any other store that also has those same high $ return items.

I think this can happen with stock too, when a customer looks for a specific image and can't find it, they go look for it elsewhere. If this happens enough they will switch to where they find the images. This can hurt a place if they don't have the obscure images or if their search is so convoluted or lousy that it can't be found. All the sites will have heaps of business handshakes and smiling lifestyle shots, but if someone needs a specific image and can't find it they will go somewhere else.

« Reply #340 on: February 21, 2012, 17:58 »
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It seems like a risk. However if they are able to keep most of their customers they're in the money, as well as maybe saving money by having fewer reviewers and other staff.

« Reply #341 on: February 22, 2012, 05:27 »
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I have a little portfolio of isometric vector.
my images have a high technical value.
With the system 123RF, I will be very much penalized although I have a high technical portfolio.
If 123RF wants to throw out small contributors can do. Is the law of market.
But for the law of market I  will move the my portfolio where it is appreciated.
Gets angry be treated as a nuisance instead of a resouce and end up inside a uman meat grinder.
This is the global market and the only choice is to migrate my images on other shelves.

« Reply #342 on: February 22, 2012, 11:13 »
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Some food for thought, this is from the description of how the changes will work from 123RF's captcha page before the earnings page:

Quote
The mechanics of deriving a Contributors Commission are as follows:

1. At the end of every month, a Contributors total credits from all downloads in the previous 12 months shall be summed according to this table:

This means that contributors will really feel the cost of any site outages during high traffic months (fall/spring).  If there is a site problem that causes loss of downloads, you may not have enough to average out your slow months properly, resulting in your commissions dropping.  This is especially troubling for borderline people that are almost to the next tier or barely over.

Quote
2. The summed credit amount shall determine the Contributors Level.
3. The Contributors level will determine the commissions for each download in the preceding month.

You won't know your commission level for the month you are in until the month ends.  That means no more daily sales figures, the only thing they can report on is the number of downloads of what type.  The actual monetary value of those credits won't be determined until month end.  This is going to really mess with budgeting on both the contributors side and the agency's side (and I'm not quite certain that this would be legal).



Edit: One possibility I just realized is that they might be using the word 'preceding' where they actually mean 'proceeding'.  That would make more sense, but such a basic failing of English in an official document would be almost as scary as the idea of determining the month's commission level at the end of the month.
« Last Edit: February 22, 2012, 11:19 by dgilder »

« Reply #343 on: February 22, 2012, 13:25 »
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I threw together a quick little Javascript based credit calculator for people who are not sure where they would land.  Just go into your earnings page, highlight the past full year of data (so currently, Jan 2012 through Feb 2011), copy and paste it into the box (make sure to get the whole line), then hit the calculate button.

I don't have a sales column for EPS in my current earnings page, so this will be broken for people with illustration sales.  The columns I currently have are below, if anyone else has something different, let me know and I can tweak it:

Month/Year Sub S M L XL XXLTF XXLMH PEL EEL CEL MS 100MB 200MB 300MB

http://davidgilder.com/misc/123RF_credit_calculator.html

« Reply #344 on: February 22, 2012, 13:39 »
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I don't have a sales column for EPS in my current earnings page, so this will be broken for people with illustration sales.  The columns I currently have are below, if anyone else has something different, let me know and I can tweak it:

Month/Year Sub S M L XL XXLTF XXLMH PEL EEL CEL MS 100MB 200MB 300MB

I was assuming that XXLMH sales were EPS sales, since I have a bunch of those sales. Anybody else?

« Reply #345 on: February 22, 2012, 13:39 »
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I threw together a quick little Javascript based credit calculator for people who are not sure where they would land.  Just go into your earnings page, highlight the past full year of data (so currently, Jan 2012 through Feb 2011), copy and paste it into the box (make sure to get the whole line), then hit the calculate button.

I don't have a sales column for EPS in my current earnings page, so this will be broken for people with illustration sales.  The columns I currently have are below, if anyone else has something different, let me know and I can tweak it:

Month/Year Sub S M L XL XXLTF XXLMH PEL EEL CEL MS 100MB 200MB 300MB

http://davidgilder.com/misc/123RF_credit_calculator.html

hahaha brilliant. Thank You! This is going to cause a riot.

« Reply #346 on: February 22, 2012, 13:45 »
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I threw together a quick little Javascript based credit calculator for people who are not sure where they would land.  Just go into your earnings page, highlight the past full year of data (so currently, Jan 2012 through Feb 2011), copy and paste it into the box (make sure to get the whole line), then hit the calculate button.

I don't have a sales column for EPS in my current earnings page, so this will be broken for people with illustration sales.  The columns I currently have are below, if anyone else has something different, let me know and I can tweak it:

Month/Year Sub S M L XL XXLTF XXLMH PEL EEL CEL MS 100MB 200MB 300MB

http://davidgilder.com/misc/123RF_credit_calculator.html


ahah you the man :D

« Reply #347 on: February 22, 2012, 13:47 »
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I was assuming that XXLMH sales were EPS sales, since I have a bunch of those sales. Anybody else?

Hmm, not sure, maybe they stick them in the same column?  If you go to the individual downloads page for a month (where it shows the actual images downloaded), the columns titles are different and it lists XXL JPG instead (when you hover over the heading it says 'Mega High').

« Reply #348 on: February 22, 2012, 13:53 »
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BTW, if the sales continue picking up, I would probably only drop to the 40% level if anyone is curious.

« Reply #349 on: February 22, 2012, 13:56 »
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2009: 185
2010: 712
2011: 2260
2012: 383

last six months included this February: 1429

looks like 45% unless they keep on growing even faster, we need revised RC too ;D

PhotoDuneMicrostock Insider

 

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