Today, CafePress announced a new Content Owner Agreement that opens many opportunities for designers and shoppers alike. The new terms shall become effective on November 1, 2013 and are available for full review at the CafePress website.
The new Content Owner Agreement includes several major changes, all of which we’ve described in detail below, including:
*Performance-based commissions: Designers contributing to the CafePress Marketplace can now earn between five and 10 percent royalty with bonus royalty structures pushing some designers to as high as 15 percent. (Shop commission structures do not change.) These changes are set forth in Section 7.1 of the Content Owner Agreement and can also be viewed on the Fees and Royalties supplemental terms (formerly the Marketplace and Shop Services policy) and our new Sales Quality Score terms.
* Adjusted royalties for third-party sales channels, fan portals, and branded merchandise: We continue to invest in development of additional channels, license partners and branded merchandise that provide you with more opportunities to make money at CafePress. Going forward, these for sales types will pay out flat, five percent, royalty rate based off of net revenue as described in more details on our Fees and Royalties page.
* Image usage permissions: Due to our new Smart Products feature and other platform extensions, CafePress may need to alter a given image for optimal placement, sizing and etc. You can find these changes in Section 4 of the Content Owner Agreement.
* Shop Sales: We have updated our “Shop Pricing Policy” to the “Shop Special Terms” which is found on our site. We’ve simply included a chart to help you more easily understand Shop Fees and plan options, further clarified if you add a product to both your Shop and the Marketplace, different royalty rates will apply and added information on your Shop Performance Bonus eligibility and Bulk Discount offerings.
Other changes can be found on the full documentation of the Content Owner Agreement and other updated policies and agreements. You can also find a more detailed series of explanations in our new Online Policies FAQ. We’ve also opened a forum thread for questions and discussion in our discussion forums.
Here is a more detailed explanation, including reasoning, for the major changes:
Rewarding Good: Performance-Based Royalties for CafePress Marketplace
The new, variable royalty rates in the CafePress Marketplace are based on the product sold as determined by a Sales Quality Score (SQS) applied to each product. The SQS is a points-based system used to judge how engaged and effective a designer is in the CafePress community and ecosystem. The more engaged and effective a designer is, the more their potential royalty rate.
The SQS is determined each day at 11:59 p.m. PT and is applied to all sales in the subsequent 24-hour period. So your SQS, thus potentially your royalty, can change daily based on the factors and score.
Here’s how the SQS corresponds to the resulting royalty rate:
SQS Applicable Royalty Rate
The factors that presently go into determining your SQS are:
* Have you logged in to CafePress in the last three months?
* Have you uploaded at least one design in the last three months?
* Have you gained a follower on CafePress.com in the last three months?
* Have you followed another designer on CafePress.com in the last three months?
* Is your designer profile at least 80 percent complete?
As you can see, the SQS is, at present, a simple scoring that shows you are actively engaged in contributing to CafePress.com and its design community. If, in the last three months, a designer has logged in, uploaded at least one design, gained at least one follower, followed another designer and has their profile complete to at least 80 percent, any sale made on that day will result in a 10 percent commission. CafePress may in the future revise and change the SQS commission rates but will do so only on notice to users.
Please note: The questions here are yes/no, not totals. You do not receive more commission if you upload more designs, gain more followers, follow more designers or log-in more. The basic SQS is simply a read of whether you are actively engaged and effective within the CafePress.com ecosystem, not how engaged or effective you might be.
As you can see, maintaining the 10% royalty rate currently offered by Marketplace Sales is not complex or unclear. Do the above five things and 10% is your commission rate.
You can find the SQS terms here.
Due to the changes in royalty rate described above, we are now able to offer our best designers the opportunity to earn even more than 10 percent. Certain CafePress designers may be offered the opportunity to earn royalties between 10 and 15 percent on certain products sold. The factors that may affect bonus royalty rates include participating in specific marketing programs offered by CafePress, the performance and quality of specific products, promoting Marketplace content on social networks, creating specific content CafePress asks for and other factors.
Why we made this change
The intent and purpose of performance-based commissions is to reward users dedicated to promoting and remaining engaged in the CafePress community – for lack of a better word, “good” behaviors. By “good” we mean in the broad sense of the term as it applies to the CafePress community and company. By applying a SQS and tying it to these factors, we are, in effect, holding designers accountable for active participation in the CafePress community. Inactive designers by definition are those no longer invested in the partnership created when they upload designs to our Marketplace. Thus, more active designers should get more reward. This approach will help create a meritocracy with our CafePress community enabling the most engaged to also be the most rewarded.
Adjusted Commissions For Third-Party Sales Channels, Fan Portals, and Branded Merchandise
For sales of your products on any distribution channel or mechanism other than in the CafePress Marketplace, you will earn a flat, five percent royalty rate. This includes third party feeds of products (Urban Outfitters, etc.), retail distribution partnerships, and on other sites within our corporate family of retail websites (www.canvasondemand.com, www.greatbigcanvas.com, www.imagekind.com, www.invitationbox.com, www.ezprints.com, www.logosportswear.com and www.tfund.com, etc.). These changes also apply to specialty branded merchandise (such as Sigg and Thermos) as well as applicable fan portals (Hunger Games, etc.)
Why we made this change
These channels are additional arenas in which your products can sell. Without investing the time, energy, technology, staffing and the like to open and promote these channels, the additional revenue would not be possible. Because there are significant (and growing) costs to build and maintain these relationships and facilitate the management of these channels, we need to offset that cost with a consistent royalty expense. Additional channels are icing on the proverbial royalty cake. It’s revenue you couldn’t realize without the partnership between CafePress and that entity.
Image Modification Permissions
The Content Owner Agreement has always granted CafePress the right to automatically add your content to any of our assortment of base goods. This update merely allows us to automatically modify your content to account for better image and/or product quality with our Smart Products features. Some of these opportunities include accounting for JPG artifacting, sizing of images, adjusting colors for appropriate printing on certain types of printers or products and adjusting the design placement on any product. These rights do not strip away your compensation for sales of any products nor do they take away your ownership or intellectual property rights.
Why We Made This Change
With many of our new innovations in print-on-demand solutions, like our Smart Products creation tool, our system automatically analyzes your image and resizes and/or adjusts it to fit on certain products. Sometimes, in order to make whites appear white and other colors print optimally, it is better to enhance the image prior to printing as well.
This term change simply allows us the right to optimize the images you deliver to us so they print properly and can be used with some of our automatic image application services.
The Bottom Line
The new Content Owner Agreement changes are designed to improve which designers are justly rewarded for their efforts to contribute to CafePress. By rewarding our most engaged and active contributors via the variable commission rate, we accomplish this. The changes are also designed to help CafePress continue to innovate and lead the print-on-demand industry, providing more and better opportunities for our designers to sell their designs on products, both in the CafePress Marketplace and through strategic, third-party channels.
As always, we take these changes very seriously and consider the options and alternatives before changes are made. We hope that all users will consider the changes carefully, wait to see how they will affect your use of the CafePress Marketplace and our services and provide constructive feedback should any arise to help improve our services.
The open forum threads for feedback on the various changes are linked below. We welcome the conversation: