Tuesday, May 5, 2009

CafePress and marketplace forces

CafePress is a print-on-demand service that allows people to upload designs and sell them on shirts and mugs and posters. CafePress has always allowed you to set the selling price for the objects you create. There’s a base price which covers the costs and profit for CafePress, and then you can add whatever you want to that and keep the difference. You can set up shops on their site, where you can organize a group of items you want to sell. A small shop is free, and a larger shop costs a little money.

Some people use CafePress to create objects for themselves or for friends and family. Some use CafePress to earn small or large amounts of money, or to raise funds for an organization. And some just use CafePress for the fun of it. Personally, I’ve got a few hundred items on CafePress, and I’ve made some meal money that way.

If you’re shopping on CafePress, you can search for items that anyone has created (unless they decided to keep the item private). CafePress calls this the Marketplace, even though it’s really just an extremely bad search engine. There are many reasons why the search engine is bad: the search algorithms are poorly written; results load slowly; the search engine depends on tags and too-short descriptions which frequently don’t accurately describe the design; it’s a little difficult to see more designs by the same person; it’s impossible to filter out designs or designers you don’t like; and the vast majority of the designs on CafePress are poorly done, so the vast majority of results for most searches are unappealing. But tastes vary, and there are many funny, unique, and attractive items on CafePress, so a lot of people do wander around CafePress, see something they like for themselves or for someone else, and order things. A Marketplace that let shoppers find things they like more easily would sell more—that’s why Amazon is so successful.

Until now, it hasn’t mattered much how people found a CafePress item that they wanted to buy: they might have followed a direct link to an item or to a shop, or been searching on Google, or been wandering around CafePress. (The affiliate program might take a 15% cut of some sales, and you might earn a bonus if you sold enough items through direct links to your shop, but those were fairly small variations.) For shoppers, it hasn’t mattered at all how they found the item they wanted to buy. CafePress and item creators all wanted to make it easier for shoppers to find items, so there was a sense of cooperation.

But starting June 1, CafePress has decided to pretend that the shops and the Marketplace are completely different. The same item will have two different prices, and the amount that the designer receives will be wildly different. Here’s an example:

I created a Rorschach blot design last winter and put it up on CafePress, where you can buy a number of different objects with the design printed on them.

Suppose you want this design on a tote bag. Right now, you can buy the tote bag for $16.99. If you do, I receive $4.00 and CafePress receives $12.99 (their base price). You might find the tote bag by following a link from here or somewhere else, or by searching on Google, or by searching on CafePress. The end result for you and for me will be the same in any of those situations.

Starting June 1, some links directly to the tote bag will give you a price of $16.99, and I’ll receive $4.00. But if you search on CafePress or follow other links to the tote bag, the tote bag will be $15 to $20 and I’ll receive 10% ($1.50 to $2.00). CafePress says that they will continue to change prices in the Marketplace, so you might pay more or less than the shop price, but I’ll definitely receive a lot less.

And CafePress says this is to make the customer experience more consistent, because they can set the price of all tote bags in the Marketplace to the same fluctuating amount.

Suddenly the sense of cooperation between CafePress and the designers is gone. I have to compete with CafePress to try to get a customer to follow one link to the tote bag instead of another. If I have a direct relationship with my customers, I have to explain why the same item is appearing at two different prices on the same site, and why one of those prices keeps changing. And I have to accept that an unknown and unauditable number of sales will result in much lower revenue. Many designers are looking at a 75% or greater reduction in the amount of money they’ll receive.

If I opt out of the Marketplace, then at least my items will have only one price and I’ll still receive the amount of money I set. But customers won’t be able to find my products using CafePress’ own search engine, even though my products will still be available on CafePress’ site if you come in from direct links or outside search engines. That’s bad for me (since customers using the CafePress search engine definitely won’t buy my products) and bad for CafePress (since customers who see a lot fewer items are less likely to buy anything). And it makes the search engine on CafePress completely defective.

The result is that a lot of the best-selling designers on CafePress are moving to Zazzle or somewhere else. Those designers are, by definition, the ones creating the designs that customers want to actually buy. As they leave, the ratio of good to bad designs on CafePress gets worse, which means fewer customers buying items from CafePress and a more negative sense of the quality of CafePress items.

My company has a CafePress shop to sell some light-hearted items. We can’t try to explain to our customers why a product is showing up at one price at http://www.cafepress.com/redrorschach.331991470 and another price at http://shop.cafepress.com/design/31466711. People who suspect that Amazon or Expedia are showing different prices to different customers get really angry, and with good reason. We also don’t want to see our best-selling item (a classroom poster) change from a $15 profit to a $2 profit. So we’ll be opting out of the Marketplace now as the best way to both avoid those problems and not have to change every link we already have to our CafePress shop in our catalogs and on our web site.

But that’s just the first step we need to take. It’s clear that this new approach from CafePress is unsustainable over the long term. The poorly executed bifurcation of their site and the deliberate crippling of their own search engine will generate massive confusion, resentment, and complaints. Since CafePress is far more likely to solve that by retaining only the Marketplace, we need to start moving our shop to Zazzle as well, despite the work involved and even though we don’t depend on the Marketplace for the majority of our sales.

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