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What does the Zazzle Volume Bonus change really mean?

*** note: this post is a bit of an info-rant ***

Zazzle.com will send out September checks and PayPal deposits in two weeks for July sales.

This will be the first month with zero – or almost zero – Volume Bonus in the payments of many Zazzle storekeepers (SK). For me, it will be the first time since February 2009 that I won’t get any Volume Bonus.

It’s going to hurt. Some of us will be hurt more than others, but anyone who had halfway decent sales is kissing significant money good-bye.

That’s how it works when you’re not in charge, isn’t it? We don’t negotiate these deals, we just pray not to be dropped too hard.

Are you at the mercy of those bigger than you?

Are you at the mercy of those bigger than you?

 What Zazzle was up to this summer

If you have been on Zazzle for awhile and paying attention, you know about the constant changes. That is simply how internet-based companies operate. Plus, they make changes in the summer in order to be prepared for the holiday season. Starting late last fall, there was a tremendous surge of downward pricing pressure put on storekeepers with implied promises that everyone would “make it up in volume,” and threats that no affiliates would refer your products if you didn’t lower your royalties below 25%. Then 15%. Then 13.3%. Now 10% with 5% on the horizon.

In June, Zazzle SKs and affiliates got official notification of this summer’s changes. Mega-changes and definitely not to the benefit of storekeepers. At least, not that we can see.

The entire Zazzle architecture was re-done with limited apparent input from UX experts. The storefronts changed – SK customization was wiped out overnight and stores became pasty pale shadows of their former selves. (Thankfully, SK protests were heeded and the colors revised!) The Zazzle look itself got stunningly attractive. (They have got some great product photographers and product displays being shown.)

Across-the-board 5% price increases went into effect. Base royalty prices dropped from 10% to 5%. The 5% high-royalty penalty kicks in at 15% instead of 20.1%. The design tools changed. The font tool, especially, went to hell. That was all fun.

Not.

Re-cap of what happened to the Zazzle Volume Bonus

The biggest impact for many SKs, however, is the change to the Volume Bonus. To give you an idea, many SKs have compared it to “what CafePress did to us” several years ago. [In 2009 CafePress changed their royalty policy and put a lot of people out of business and shocked and angered many more. A lot of those designers fled to Zazzle as a safe haven. I was one of those already on Zazzle who bailed out of CP.]

The generous Volume Bonus (VB) that we all loved has, essentially, been done away with. We Zazzle storekeepers and affiliates used to get VB for sales we referred as well as for our own sales that had not been referred. It could add up to a nice bit of change if you were a solid seller. That is hundreds or thousands of dollars each month could have been earned solely from VB. The more you sold, the higher the percentage of VB as well. It was really nice at the holidays.

Well, that’s gone. Some people are going to sink.

Is your vessel in danger of capsizing?

Is your vessel in danger of capsizing?

What’s left is a new and eviscerated version of VB. Here’s how it is more politically described on the Zazzle blog:

Volume Bonus Becomes Associate Volume Bonus (from the Zazzle blog)

We’re committed to providing strong incentives to all Zazzle community members to encourage each person to put in the extra effort in generating more awareness for products on Zazzle. With that in mind, starting July 1st, the current volume bonus structure will be transitioned to a Zazzle Associate Bonus Program. You can make money by referring customers to Zazzle. We believe that this new program will align the Zazzle community around generating the most revenue from referred traffic [emphasis added]. As a Zazzle Seller you are already enrolled in this new program!

In a nutshell, Zazzle doesn’t need more artists. Creators are a dime a dozen and expendable. What it needs are marketers who promote products.

Here are the details laid out in the new Volume Bonus Program Terms published by Zazzle,

The Bonus will be calculated as a percentage of Base Sales on a domain-by-domain and currency-by-currency basis as follows:

1% of Base Sales for Base Sales in the applicable month from $100 to $999.99; plus
5% of Base Sales for Base Sales in the applicable month from $1,000 to $4,999.99; plus
12% of Base Sales for Base Sales in the applicable month from $5,000 to $99,999.99; plus
17% of Base Sales for Base Sales in the applicable month $100,000 and above.

Base Sales means the purchase price received from the customer less the Markup Amount; amounts charged for shipping, handling, packaging, insurance, and sales or similar taxes; refunds, credits, and reversals; and the face value of the postage (if the revenue is for Zazzle Custom Stamps). The Markup Amount means the purchase price multiplied by either the Royalty Rate applicable to the product sale or the Standard Royalty Rate in the case of the sale of a private product.

So, if I’m figuring this right, the Volume Bonus has been negatively impacted by three factors:

  1. It only applies to sales for which you get credit for the referral instead of everything that wasn’t referred.
  2. The percentages dropped. A lot.
  3. The percentages are applied on a lower base price now (5% instead of 10%)

If  you want to torture yourself without banging your head on your desk, read the Previous Volume Bonus Program Terms here:

Volume Bonus Program prior to July 1st

To recognize Sellers and Associates who make Zazzle successful, we offer the following volume bonus program.The following terms of this agreement (“Agreement”) apply if you create public products, design(s) or art for sale on the websites owned or operated by or for Zazzle Inc. (“Zazzle”) and/or participate in the Zazzle Associates Program.Every month, Zazzle will pay you a bonus amount (“Bonus”) based upon the following sales:

  1. A sale of a product for which you earned a Royalty, which was not subject to a Referral Carve out (as defined in the Non-exclusive License Agreement); OR
  2. A sale of a product for which you earned a referral fee.

The Bonus will be calculated as percentage of Base Sales on a domain-by-domain and currency-by-currency basis as follows:

  1. 7% of Base Sales for Base Sales in the applicable month from $100 to $999.99; plus
  2. 12% of Base Sales for Base Sales in the applicable month from $1000 to $4999.99; plus
  3. 17% of Base Sales for Base Sales in the applicable month $5,000 and over.

Base Sales means the purchase price received from the customer less the Markup Amount; amounts charged for shipping, handling, packaging, insurance, and sales or similar taxes; refunds, credits, and reversals; and the face value of the postage (if the revenue is for Zazzle Custom Stamps). The Markup Amount means the purchase price multiplied by either the Royalty Rate applicable to the product sale or the Standard Royalty Rate in the case of the sale of a private product.

You want it spelled out in dollars and cents?

OK, here’s a couple of examples of what the change in Zazzle Volume Bonus means for a moderate and a very good seller. Assume all sales were U.S.A. based and evenly split among self-referred, 3rd party referred and not referred. These are all rough samples and do not take all the nuances into account. That said, they are, to the best of my knowledge, what we called “directionally correct” where I used to work.

Example 1. A moderate seller who is covering maybe the car payment and groceries and a few extras with their Zazzle income. She has sold $3000 in BASE sales of Zazzle merchandise.

Under the old plan, she would get a volume bonus based on 2/3 of that $3000.

  • 7% VB on $900 = $63.
  • 12% VB on $1000 = $120
  • Total VB = $183

Under the new plan, she would get a VB based on only 1/3 of that $3000, or $1000 is VB eligible. Actually, with the increased prices and the decreased base price, the math gets way crazy.

  • 1% on $900 = $9
  • Total VB ≤ $9

Her royalty check could vary widely with those sales, based on how she has prices set, but let’s say it was $600. The $183 in VB was a nice add and buys groceries. That’s a 20+% drop in income.

Example 2. A good seller who makes a living from Zazzle. She has sold $30,000 in in BASE sales. That’s maybe $6000 in commission.

Under the old plan, she would get a volume bonus based on 2/3 of that $30,000. That’s $20,000.

  • 7% VB on $900 = $63.
  • 12% VB on $4000 = $480
  • 17% VB on $15,000 = $2550.
  • Total VB = $3093

Under the new plan, she would get a VB based on only 1/3 or $10,000.

  • 1% on $900 = $9
  • 5% on $4000 = $200
  • 12% on $10,000 = $120
  • Total VB ≤ $329 (again, not taking the price changes into account)

Well, to put it bluntly – that sucks.

How are you handling the change in Zazzle Volume Bonus terms?

Based on way-too-extensive forum readings, Zazzle storekeepers are suffering the stages of grief: Denial. Anger. Bargaining. Depression. Acceptance. Some of them are making others of us crazy (crazier).

So, you suffer. And then you do something. Right now, IMO, SKs fall into these categories of cliche:

  1. Ignorance is bliss. “Hey, did I miss something? I haven’t been reading my emails or checking out the forums.”
  2. The good soldier. “Zazzle’s been good to me so far. I will trust they are doing what is best. I will carry on my mission to bring cartoon donkey designs to the masses. PBJ sandwiches are good enough.”
  3. The grass is still greener.  “Yeah, it sucks that Zazzle has arbitrarily cut my income by 10% or 30%, but it still seems the best POD out there. I’m glad we have another income.”
  4. Eggs in one basket. “Where can I find other baskets like this one used to be where I can put my precious designs? I didn’t know they could step on the basket and crush it!”
  5. Exit, stage left? “It’s been nice to work from home and take of my kids, my mom, my garden, but it’s not going to work anymore. I’m outta here.”
  6. Panickers. “OMG! I am disabled and/or unemployable. What will I do with a big cut to my Zazzle income?”
  7. Stock-takers. “OK, this is bad, but Zazzle is still be one of my income and artistic-expression options. Now, what can I do to make it less-bad?”
  8. Shruggers. “I wasn’t making any money with Zazzle anyway, so I’m only losing a dollar or two each month.”
  9. Pollyanna. “I’ll just work harder and make it up on volume. I think I can! I think I can!” (OK, that became the Little Engine that Could but you’d have to know that it was possible before you tell that story, right?)
  10. Newbies.  “I won’t miss what I didn’t have.”

I had a category for Idiots and Whiners, but that was non-productive. There’s no cure for stupid, anyway.

Still in the game?

OK, you’ve taken a deep breath. You’ve decided you’re still in this game. Whether you are a Stock-taker, Pollyanna or Panicker, you want to learn to play better, even if you play less and turn your focus elsewhere. What can you do? On Zazzle, specifically, that is.

First, consider what variables do we, as storekeepers, control?

We control the designs we create or license, the way we apply them to products, when we add new products, how many products we generate, how we title, describe, categorize and tag them, how we promote them and how we price them. With those factors, making more money (or getting back to where we were) means that we have four levers to pull:

  1. Sell more
  2. Refer more
  3. Pricing optimization
  4. Timing

So, with Zazzle.com referrals becoming more important to earning an income online with the POD business, we have to make sure we get the ones we work for. The next post has some info you may not have realized about getting the referrals you work for.

sailboat

Can you change tactics and set sail again?

 

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