Are 5% Commissions the Future of the Print-On-Demand Industry?

[luissantos84]

http://fineartamerica.com/newsletters/five-percent-commissions.html

[w7lwi]

Looks like you and I posted the same thing at the same time.   

[luissantos84]

all the speech from Sean is spot on and we all know that for a long time but its impossible to change the way agencies look at us with the amount of content and contributors they have on their side, even if a few of us decide to stop supporting DPC or Cafepress or Society6 a few millions like 20 million (as he said on the article) will still continue to accept the very low royalties and once again nothing will change because a tiny % decides to leave

the real trouble resides on the financial side as well, its not viable to drop all agencies and stick with FAA and Pixels where we can set our own prices but there aren't enough sales (close to zero in my case) to provide a regular income and we know too that zero of a lot of royalties/setting prices is still zero!

P.S. are you serious? my post deserves a minus? this is unbelievable, you must know everything and other know zero, sure! don't just minus, say what I am saying wrong IYO

[luissantos84]

Looks like you and I posted the same thing at the same time.   

haha I was 10 minutes quicker

a minus for saying that? its a joke, come on guys!

[luissantos84]

"Which Model Will Prevail?   5% Commissions vs.   Set Your Own Prices"

He can call it "Set Your Own Price", but we all know that it is really "Set Your Own Royalty".  When his income goes down, he just increases his markup and the real "price" goes up.

I wouldn't do anything for 5%, though.

in the all article he said a lot of good stuff that we have been talking about for years, the only wrong was really the 5%, its actually 10% (that great!) if you do a few things like following a person and post a new design every 3 months

[Tror]

B**ls**t. Nobody will bother to upload for 5%. If anybody does he/she is _em_ mentally not at best capacity ;-) . The days of hoping to be able to grow and survive low commission periods are over. Sites which cannot deliver a decent return/revenue will be voided and ignored and should be left for page 600 on google. I am even at the point of not bothering to upload to SS anymore since I see a better return on other - more expensive - sites.

[robhainer]

When sites stop producing income, which they can't do if they have 5 percent commissions, people will stop contributing. Then the site will die.

It's like Veer. I like the site, and the folks who run it. But they've stopped producing income so I don't upload new stuff there anymore unless I'm really bored and have nothing better to do. If they had five percent commissions, they wouldn't get that.

Complain about DPC, but at least it's a 29 percent commission on every sale.

Luis, I gave you a heart to bring you back up!

[pancaketom]

I think he is confusing "set your own price" with "set your own markup" - a huge distinction - but one that is probably necessary with POD - but not for electronic file licenses. The sites can't give away prints for free without a significant cost to print and mail them.

I wonder what their cut is for each sale.

In general I agree with the main thrust - the easiest way for the sites to increase their take is to cut ours and if the sites do it and get away with it the other sites will tend to follow (eg Ft and IS and DT and 123RF). Most of the other sites just started with a lower percentage to the artists and have kept things there - SS, Veer, Photodune... It is rather depressing.

[EmberMike]

It's kind of disgusting that CafePress makes people earn their 10% royalty, as if that's some sort of gift.

How quickly these companies forget that without art/photography/design/illustration these products are just white t-shirts and blank canvases.

One thing I'll say I agree with 1000% from that FAA blog post is the bloat that companies like CafePress have. 775 employees? That's insane. No wonder they're hemorrhaging money and are looking to cut royalties.

[PaulieWalnuts]

Pretty good post by Sean.

Amazing how a company could have $50M in sales, have no inventory, and be unprofitable. So from mismanagement, greed, or other problems the contributors are the first to get squeezed to try and fix the problem. I've already stopped submitting to Istock/Micro and Getty because other sales channels are showing more promising trends.

Another problem is that stock, prints, and other sales channels all affect each other. For my prints I have increased prices a lot and have had no problem getting $400 for a 32x48 canvas wrap. Getty/Photos.com sells them for $199 of which I get 20% or $40. So not only is this driving prices down but also at the same time I get a fraction of what I get selling direct. On top of that, if micro is selling my image for $1, $10 or whatever, why would anyone buy a $400 canvas print from me when they can license my image for a few dollars and have it printed at a discount printer for $100?

Buyers are willing to pay more. But these sites are competing on the race to the bottom which doesn't do anybody any good including the buyer. If contributors stop producing products and sites go out of business, how does this help buyers?

[luissantos84]

Pretty good post by Sean.

Amazing how a company could have $50M in sales, have no inventory, and be unprofitable. So from mismanagement, greed, or other problems the contributors are the first to get squeezed to try and fix the problem. I've already stopped submitting to Istock/Micro and Getty because other sales channels are showing more promising trends.

Another problem is that stock, prints, and other sales channels all affect each other. For my prints I have increased prices a lot and have had no problem getting $400 for a 32x48 canvas wrap. Getty/Photos.com sells them for $199 of which I get 20% or $40. So not only is this driving prices down but also at the same time I get a fraction of what I get selling direct. On top of that, if micro is selling my image for $1, $10 or whatever, why would anyone buy a $400 canvas print from me when they can license my image for a few dollars and have it printed at a discount printer for $100?

Buyers are willing to pay more. But these sites are competing on the race to the bottom which doesn't do anybody any good including the buyer. If contributors stop producing products and sites go out of business, how does this help buyers?

its sad but FT deal and other isn't that different from Cafepress, some contributors will quit/leave but a few millions will keep on submitting new pictures, products, whatever

lets go nuts and say that 50% would remove everything, that is still 50% left which is enough to keep buyers more than happy

the truth is that we can't change anything at this moment, we need to create a new fair place controlled by us and get one buyer at a time and slowly leaving microstock agencies (sort of a stocksy but more open)

unfortunately FAA and Pixels aren't the solution, they might be paying some people well but the majority is selling 2 or 3 prints a year, not enough to dump agencies

[EmberMike]

its sad but FT deal and other isn't that different from Cafepress, some contributors will quit/leave but a few millions will keep on submitting new pictures, products, whatever

lets go nuts and say that 50% would remove everything, that is still 50% left which is enough to keep buyers more than happy...

Careful, you keep talking like that and people will start to call you a saboteur.

(I suggested something similar about DPC, that it didn't matter if we got half of their images opted-out, and people said I was sabotaging the effort).

...the truth is that we can't change anything at this moment, we need to create a new fair place controlled by us and get one buyer at a time and slowly leaving microstock agencies (sort of a stocksy but more open)

unfortunately FAA and Pixels aren't the solution, they might be paying some people well but the majority is selling 2 or 3 prints a year, not enough to dump agencies

We wouldn't need to even look at dumping agencies if the agency mentality shifted to where it should be, that it is worth investing in their product and their artists because at the end of the day, we generate their product. Some agencies do get that. They are just few and far between. And unfortunately we are left here fighting an uphill battle trying to get the other companies to understand that not only should they pay artists fairly, that they can do it and be profitable at the same time.

[luissantos84]

We wouldn't need to even look at dumping agencies if the agency mentality shifted to where it should be

yep, that is right and so simple (complex for them) too, that said I will remain seated because it might take a while

its funny that most agencies founders have started somehow because they were creatives first, then started getting some of our work from all around the world for free (actually we are paying them quite nicely!) and now they believe its theirs, deep down they know they should act differently but money talks

[Valo]

I see the discussion is taking place here, so I will post my comment here as well, if I may 

It is a very lengthy article, or rant if you will, to basically say Cafe Press lowered their artist Royalty and they will not.

I find Fine Art America is mostly slagging off other art sites, instead of focussing on their strengths, which are few.

[borg]

I am done with CP anyway...
I don't need anyone to tell me what is 5%...

[stockastic]

Sean McDunn obviously spent a lot of time on that piece, which pretty much reiterates FAA's well-known strong points.  I wish he'd spent that time working on some of the equally obvious weaknesses. Or on that long-promised, endlessly delayed 'major upgrade' to the personalized 'artist web sites' which still look like the 90s. 

He's done some great things and shouldn't be resting on his laurels.

[ShadySue]

I have no real problem with the look of the artist website, though of course it's not as 'customisable' as they suggested.
Personally, I wish they had fulfilled their promise to have a UK/European partner in place early this year. Probably they realised that their key market is the US, so not worth the investment, and for many European artists (togs in particular) that may be the bottom line. Or maybe they were having 'discussions' with a European printer, but they fell through (shouldn't have announced it until they were ready).

[landbysea]

I have no real problem with the look of the artist website, though of course it's not as 'customisable' as they suggested.
Personally, I wish they had fulfilled their promise to have a UK/European partner in place early this year. Probably they realised that their key market is the US, so not worth the investment, and for many European artists (togs in particular) that may be the bottom line. Or maybe they were having 'discussions' with a European printer, but they fell through (shouldn't have announced it until they were ready).

You make it sound so simple. They would have to match all the frames and mediums. And still keep the profit margins close, so there are not 2 sets of prices, which would defeat the purpose.  And you really don't know what contracts the existing printer has with FAA. There was not a formal announcement I know of. What were they supposed to do lie everytime someone asks, and say they had no plans?

[ShadySue]

I have no real problem with the look of the artist website, though of course it's not as 'customisable' as they suggested.
Personally, I wish they had fulfilled their promise to have a UK/European partner in place early this year. Probably they realised that their key market is the US, so not worth the investment, and for many European artists (togs in particular) that may be the bottom line. Or maybe they were having 'discussions' with a European printer, but they fell through (shouldn't have announced it until they were ready).

You make it sound so simple. They would have to match all the frames and mediums. And still keep the profit margins close, so there are not 2 sets of prices, which would defeat the purpose.  And you really don't know what contracts the existing printer has with FAA. There was not a formal announcement I know of. What were they supposed to do lie everytime someone asks, and say they had no plans?

It was discussed on the discussion forum towards the end of 2013, and Abbie Shores herself said it was going live 'early in the new year'. I'd rather they ignored the question rather than say they were about to add a desirable (for those of us furth of North America) option, then not do it. (I had stopped uploading, but added a few hundred around Christmas/New Year on that basis.) They could have said they were 'thinking about it'. As Abbie said they were about to enable printing in Europe, I can make an informed guess that there isn't a restrictive agreement with their existing printer.

I already see prices in ���, and there are options for certain other currencies, so 'different prices' not an issue.

[LesPalenik]

There is one section there that can be applied equally well to selling stock images:

Joining as Many Sites as Possible

One of the biggest factors that's going to accelerate the switch to 5% commissions is... human nature.
I see this all the time with sellers on FineArtAmerica.com.   A seller will join the site, upload a few images, generate some sales, and then think:
"Hey - if I'm making $500 per month selling on FAA, how much more could I earn if I also joined websites X, Y, and Z?"
The seller then goes and joins X, Y, and Z, without really paying attention to the commission structure on those sites.

Here's a perfect example.   Society6.com only pays out $15 for the sale of a canvas print.   It doesn't matter if the print is 8" x 10" or 40" x 60".   The most that you're going to earn is $15.
So - by joining Society6, you're effectively endorsing $15 as an acceptable payment for the sale of your canvas prints.   You're broadcasting to the entire print-on-demand industry: "I'm OK with $15 payments."
On FAA, you might be selling your canvas prints for $100 and earning a nice income doing so.
However, if you're also selling the same canvas prints for $15 on Society6, here's what's going to happen in the long run.   Buyers will find your prints on both FAA and Society6, and if your prints on Society6 are $85 less than on FAA, buyers are going to buy from you on Society6.

Just like that - you've undercut yourself, lost out on $85, and encouraged the growth of a business model that dictates low prices to you.   Over time, all of the other print-on-demand sites in the industry will realize that $15 is an acceptable price to pay a seller for a canvas print.   Why?   Because you told them that you're OK with it.   Hundreds of thousands of sellers on Society6.com are OK with it, too.
That emboldens the other print-on-demand companies to follow suit and lower their own payments.
Is there anything wrong with selling canvas prints for $15?   Not necessarily.   Just understand that the entire industry will slowly move in that direction as more and more sellers become OK with that price point.
Remember - Cafepress just convinced 20 million sellers to accept 5% commissions.   Cafepress sells 24" x 36" canvas prints for about $150... which means that the sellers will keep $7.50 for each each sale.

[pkphotos]

Only an idiot would sell products/prints/photos for 5% commission. I deleted my account from Cafepress because they paid only 5%. At Zazzle the lowest I've set my commission is 14% and the highest 25%. It's currently 18%. I find FAA is a very poor performer, they are making too much money from selling subscriptions IMO.

[PaulieWalnuts]

There is one section there that can be applied equally well to selling stock images:

Joining as Many Sites as Possible

One of the biggest factors that's going to accelerate the switch to 5% commissions is... human nature.
I see this all the time with sellers on FineArtAmerica.com.   A seller will join the site, upload a few images, generate some sales, and then think:
"Hey - if I'm making $500 per month selling on FAA, how much more could I earn if I also joined websites X, Y, and Z?"
The seller then goes and joins X, Y, and Z, without really paying attention to the commission structure on those sites.

Here's a perfect example.   Society6.com only pays out $15 for the sale of a canvas print.   It doesn't matter if the print is 8" x 10" or 40" x 60".   The most that you're going to earn is $15.
So - by joining Society6, you're effectively endorsing $15 as an acceptable payment for the sale of your canvas prints.   You're broadcasting to the entire print-on-demand industry: "I'm OK with $15 payments."
On FAA, you might be selling your canvas prints for $100 and earning a nice income doing so.
However, if you're also selling the same canvas prints for $15 on Society6, here's what's going to happen in the long run.   Buyers will find your prints on both FAA and Society6, and if your prints on Society6 are $85 less than on FAA, buyers are going to buy from you on Society6.

Just like that - you've undercut yourself, lost out on $85, and encouraged the growth of a business model that dictates low prices to you.   Over time, all of the other print-on-demand sites in the industry will realize that $15 is an acceptable price to pay a seller for a canvas print.   Why?   Because you told them that you're OK with it.   Hundreds of thousands of sellers on Society6.com are OK with it, too.
That emboldens the other print-on-demand companies to follow suit and lower their own payments.
Is there anything wrong with selling canvas prints for $15?   Not necessarily.   Just understand that the entire industry will slowly move in that direction as more and more sellers become OK with that price point.
Remember - Cafepress just convinced 20 million sellers to accept 5% commissions.   Cafepress sells 24" x 36" canvas prints for about $150... which means that the sellers will keep $7.50 for each each sale.

Great post. I'm on FAA and was just doing a price review of a few different POD sites to see if I should join them.

A problem with all of this is the level of pricing buyers have gotten used to. Prices at Society6, Art.com, Photos.com, and most of the popular sites are close to the same. An example is a 8x10/8x12 print which is $15-$20 at most sites. On FAA and my personal site I have them priced consistently around $40 and have no problem selling at that price. Unless I can control the prices at a site to make my pricing consistent across all sites I don't join the site. Like you said why would I want to sell something on a couple of sites at $40 and the exact same thing on several other sites for $15? I would be competing against myself for lower pricing. Why would a buyer pay almost 3x as much for the identical product?

And like you said, supporting all of these sites that force low pricing and/or commissions is just continuing the trend that low commissions are okay.

[PaulieWalnuts]

Only an idiot would sell products/prints/photos for 5% commission. I deleted my account from Cafepress because they paid only 5%. At Zazzle the lowest I've set my commission is 14% and the highest 25%. It's currently 18%. I find FAA is a very poor performer, they are making too much money from selling subscriptions IMO.

I don't really know if it has anything to do with being an idiot. I think it probably has more to do with just rushing into joining as many sites as possible without evaluating them as a businessperson.

The great thing about this business is it has a low barrier to entry and just abut anybody can get in. The bad thing about this business is it has a low barrier to entry and just abut anybody can get in. Some contributors aren't business-minded or just don't care because it's a hobby and will support sites that pay any commission.

[PaulieWalnuts]

This is an old post but for whatever reason I just got another email from FAA for this http://fineartamerica.com/newsletters/five-percent-commissions.html. And I'd say it's even more relevant a year later.

Since then I've worked toward equalizing my pricing. I've dumped Zazzle, CafePress and all these other sites that are competing on lowest price where I'm the collateral damage. And I'm avoiding any new low price sites. I only now support sites that can match my personal site pricing and at the moment FAA is one of them.

Wanna know what? I keep raising my print prices and my sales volume is going up. I have no problem selling prints, and even some stock photos, in the hundreds of dollars that these sites are selling for a small fraction of that. And on top of that, even with bottom feeder prices, I rarely sold jack at Zazzle or elsewhere. The only thing that I ever sold at Zazzle was 25 cent magnets and postcards. Total waste of time. So why can I sell $400 canvas wraps on my site but Zazzle can't sell them for $200 or even $100. What that tells me is price isn't the problem. It's false price competition and while these sites battle to survive they're taking us down with them.