Spreadshirt is ready to put your Shop on the global market! Doing so requires a commission solution that’s flexible enough to adjust to changing market situations while minimizing your efforts at the same time. We’re putting the new components into place in the coming weeks, and here you can read up on important information concerning the most vital element: the Affiliate Commission.
Robert, why is Spreadshirt introducing changes to the commission model?
Spreadshirt offers a very complex system for partners. In the forthcoming quarters, some changes will be made in order to reform a system that is quickly becoming obsolete. The reasons for these changes are new markets new currencies, the new Partner Area and integration of the T-Shirt Designer into the Spreadshirt Shop. All of these factors could not be taken into account with the current commission system.
Suppose a partner has 10 designs and wants to offer these designs and wants to offer these designs on 10 different products in his shop. He would need to adjust 100 prices! And that’s only in his own currency! With the fact that shops will be available in many different currencies moving forward, the burden would become unbearable. The scenario gets even worse if product prices change, which is something that is necessary from time to time. Partners would be forced to change their prices over and over again. At the end of the day, everyone would be left unhappy.
Moreover, we need to take into account the changes to the new Partner Area that our Product Owner Petra announced some time ago. The changes were made to be able to publish designs on several—or even all—of our products in a matter of seconds. See that this could involve 190+ products, the complexity of the aforementioned example would get completely out of hand.
That’s why we’re introducing the new Affiliate Commission model in order to facilitate swift pricing and product creation for a variety of markets.
We are aware of the fact that not all partners will immediately see the benefit and added value of the new system. Continuous adjustments and additional features are needed and will be developed until everyone’s demands are met. The introduction of the Affiliate Commission is the first of many steps in the right direction.
How will our partners be affected by the changes? Who will benefit from the new Affiliate Commission, and who will not feel the change at all?
Every partner shop will be affects. The changes for partners running a static shop will be more marked than for those with a designer shop. We will apply great care in looking at product type prices again, and we will increase them wherever possible in order to be able to pay out a decent Affiliate Commission. This is why product price changes will also have an effect on designer shops.
As far as who will benefit here, there are no hard and fast rules about how much everyone will profit. Some partners adjust their product commission in the cent range to adjust total prices to .99 cents. Some partners set prices in a way that they can receive the highest possible commission. According to our calculations, most commissions are either set to 0% (as with non-profit organizations that cannot generate any profits with their shop) or in the range of 1% – 25%. We concentrate our efforts on the latter. All other partners are bound to receive a lower commission in the future, but we are sure that they will still benefit since lower retail prices usually mean more sales.
One benefit that will eventually apply to every partner will present itself in the form of a much lower workload in regards to shop administration and maintenance. In April, we’ll give partners a more detailed update on the matter in a separate post.
Please describe for us exactly how the new Affiliate Commission model works.
The final customer currently pays for the product price + the print price + the design commission + the shop product commission. The “owner” of the design receives the design commission, and those creating products with it receive the Shop Product Mark-up.
In the future, we are going to increase product type prices in static shops and add the printing costs and design price. The “owner” of the design will continue to receive the design price, but the creator of the product will receive 20% of the net price of the product + the print price. Our partners always have the option to earn 0% if they wish.
We’ve created these infographics to explain the new commission structure:
An Affiliate Commission calculation tool has been developed to give you a hands-on way to see how the new structure will affect your product prices and income. Try the commission calculator now!
What are the advantages for partners?
As mentioned before, all partners will immediately benefit from lower administrative efforts. In the long run, they will benefit from the facilitation of new projects, which are made possible with this change. The automatic generation of products, markedly reduced efforts with regards to price changes and internationalization (making products available worldwide) are the biggest advantages.
Partners will feel the advantages once they begin receiving monthly commission payments (as opposed to the current quarterly payout model) and a new Volume Commission. The latter is a bonus payment that partners on sales of ten or more products over the course of two weeks. Partners will receive more detailed information about these changes in April.
What must a partner do to adapt to the new model?
Every partner will be informed of when the changes to their shop will come into effect. On the day of the changeover, the partner should have decided whether he wants to receive 0% or 20% of the Affiliate Commission on product sales (the advantage of products set to 0% is, of course, that they can be offered at a lower price). What’s more, partners who don’t agree with the new option would be advised to adjust their design prices.
What are the next steps?
Next up, we will adjust the terms and conditions and give our partners the opportunity to ask questions. Starting in May, we will implement the changes for each country. The release process will take a while to complete as the new calculation prices will take some time. We want to be sure that we get everything right from the word ‘go’. At the same time, we will introduce monthly payouts of the commission and the volume bonus. More info will follow in April.
We hope that the interview with Robert was helpful in shedding some light on the new commission model. Please let us know if we can further clarify any issues. We look forward to your comments below!
wpDiscuz
Hi,
It’s gone a bit quiet – I wondered if Spreadshirt had re-considered the May 1st update to the partner shops with regards new commission structure?
I’ve had a look at the commission calculator – it looks as though the product costs are increasing between 45-70%. That’s crazy!
It feels as though you are favouring designers (who upload) rather than shop partners (who actively promote these designs and Spreadshirt itself) – is this true?
I know there has been a bit of a backlash to the pending changes, and this may only represent a very small percentage of users, but have you considered the people who haven’t said anything who are undoubtedly greater in number. People are saying they’re leaving are probably stating a knee-jerk reaction because they are angry. Why would someone take their shop down when it would be much more sensible to leave it hanging, go else where and actively promote the alternative… I don’t know how far into the future it will become apparent how many people have gone elsewhere…
I’d like to know that as well Confused Shop Owner! Lena (Spreadshirt) can you confirm this without trying to use words that mask the real issues we are asking about. And no, “wait until April blog” won’t work, we demand real answers to this REAL problem for all shop owners.
Thanks Lena, I think we just want you to acknowledge that there will be a significant price increase and that the example above is not a good example since it doesn’t reflect how much the prices are going to go up.
Can’t you at least confirm this? Is this question specific enough?
And are all product prices going up across the board? All we’re asking for is some transparency and not gloss over the real issue — which is we have to charge a lot more to make the same commission.
Can you confirm this?
Please redo the calculator so that it is crystal clear for shop owners. There are far too many responses here that prove shop owners are unclear about what the calculator actually represents. The new price under the new model would not be “$18.50” as shown here. It would be higher than the old model based on the affiliate commission shown. Also in order to make the example easier to follow, the product type price for both models should be both set to $10.00. This should be very simple math for the reader.
Everyone that says they are leaving Spreadshirt… where are you planning to go?
I left Cafepress years ago because they really screwed designers. I went from making $4 per shirt to maybe 70 cents. Besides, their interface for making products is horrible and they are constantly taking stuff down that I own copyright on.
Zazzle is more expensive. Redbubble and Society6 are expensive and not well known among shoppers.
I really like Skreened but their lack of allowing you any kind of control over branding your own shop is a huge minus. If there was some way of integrating Skreened into your wordpress site, maybe that’d be an option. But they don’t allow it.
I know everyone is mad, but I say wait and see what happens. Besides, you have no other options.
Spreadshirt now blocking comments on this blog……….. very telling!!
Shocking that Spreadshirt now refuses to answer questions and is hoping this all blows over. Don’t count on it Spreadshirt……… your shop owners are a lot smarter than you thought!
Agree Joe. Thanks for clearing all this up for us.
And the fact they aren’t really directly answering your questions about the price hikes makes it clear they want to minimize this. It just makes them look worse by not addressing it.
The blog team were probably instructed not to. Well it looks bad because we are not dumb and can see what’s really going on.
They are going to lose a lot of affiliates, but apparently their affiliates aren’t a big part of their income…must be the marketplace… otherwise why do this if you know this will probably lower our sales?
Thanks @Former Shop Owner. It grows tiring. They have not yet shown that they understand what I’m saying, so I’m not yet convinced that they understand what their calculator is doing. The 10% to 20% price hikes (beyond the new 20% commission) could still be unintentional.
Joe Lapp, thank you for pointing out these inconsistencies that spreadshirt has in their blog and calculator. Many shop owners will just say “ok” and go with the flow. It is necessary to understand what they are doing. Even more so is the fact they they tried to hide things from their shop owners, which again, is highly unethical, albeit legal. They are scrambling now to try and put out the fires they have created. Only seems to be adding more fuel. They really should have been completely honest in the beginning and forthcoming about everything. This is a major blow to every shop owner on Spreadshirt, unlike what they have said. No surprise there.
Put another way, it is necessary for Spreadshirt to increase the (print + product type) price by the 20% commission if the 20% commission will be coming out of this price in the future. The new model requires this.
However, that’s not all Spreadshirt is doing. Spreadshirt is also increasing its share of the price by 10% to 20%, according to the calculator. This is not required by the new model. This is a hidden price hike.
I should clarify: the 50 to 90 cent difference is relative to the illustrated “new” model. Relative to the original model, the final price of the corrected model is $2.75 to $4.50 higher, while the final commission is $1.35 to $1.70 higher, with Spreadshirt’s share increasing by $1.40 to $2.80 (10% to 20%).
Thomas, it’s not clear to me that you understand the calculator examples we are presenting. It would help us if you addressed our examples of base price increases. If you revisit my initial three examples (other thread), pay attention to the 9.3% to 19.2% increases in Spreadshirt share that I report. There are additional examples in this thread.
**** PROOF THAT THE ILLUSTRATION IS WRONG ****
(((PART 1))) The illustration above shows that Spreadshirt is LOWERING the base price of the product by 5.7%. Here’s why:
Old Spreadshirt share = (print price) + (product type price) = $14.00.
New Spreadshirt share = 80% * (print price) + (new product type price) = 80% * $16.50 = $13.20, as shown. The remaining 20% commission = $3.30, as shown.
The example shows Spreadshirt losing 80 cents ($13.20 – $14.00) in new model relative to the old model. That is, the illustration shows that the new model has LOWERED the base price by 5.7% (0.80/14.00).
We can confirm this more intuitively. The original product commission of $2.50 was only 2.50/(4+2.50+10) = 15% of the “net” price. In order to increase the commission to 20% and yet leave the final price ($18.50) unchanged, Spreadshirt would have to eat the ~5% difference.
On the contrary, the calculator is showing that Spreadshirt is INCREASING the base price by varying amounts (9.3% to 19.2% in my examples).
(((PART 2))) If we choose a base price increase at the low end of calculator results (most favorable to customers), say 10%, we get the most favorable correction for the above illustration.
The old spreadshirt share is $14.00. A base price increase of 10% makes this $15.40 under the new model.
The new net price gives 20% to the shop owner and 80% to Spreadshirt. 80% of $19.25 is $15.40, so $19.25 is the new “net” price of the product.
The new 20% commission is therefore 20% of $19.25 = $3.85.
If we add the design commission, the new price is $21.25 and the new total commission is $5.85. And this is the lowest price scenario!
For kicks, a calculation at a 20% base price increase yields a new “net” price of $21.00 with a 20% commission of $4.20. Add in the $2 design commission and the new numbers are $23.00 product price and $6.20 commission.
The final price in the corrected model is $2.75 to $4.50 higher, and the final commission is 50 to 90 cents higher.
Thomas, if I may say, I think the reason people are reacting so negatively here is the way this information was presented. It seems you guys tried to minimize some things here.
It appears (and I may be wrong) that sales aren’t what they used to be for Spreadshirt overall. Who knows?
So perhaps in order for Spreadshirt to stay afloat this is a change that HAS to happen. Had this presented more in this manner and you guys had been more clear about price increases (and why this has to happen), then I know I would have not reacted so negatively.
But when raising prices and taking MORE of the commission, you have to understand what that signals and looks like to us.
I think what irritated me the most was that this was presented as such a great opportunity for affiliates to earn more, but little mention of how much prices would be increasing for us to earn that commission.
If you look at that image above with the old/new prices, it really does paint a picture of higher commissions with little change, but then when you use the calculator for your shop, it shows the REAL picture.
The price of the T-shirt I sell the most of is going up by $4.49. So yes, you’re giving me a 20% commission, but can I sell the same volume at that price?
So the extra 20% commission and the volume bonus are watered down by the fact prices of products are increasing quite a bit.
I understand that Spreadshirt is not going to come out and say “Look we need to make more money or else we’re in trouble…” but it’s just a tad insulting that this was presented with watered down details.
That’s why you’re seeing such a strong reaction from us.
The illustrated example above is wrong and deceptive. It shows our commission increasing without the price of the product increasing, when in fact the price of the product will increase 10% to 20% in order for us to keep making the same commission.
I’m taking your response as confirmation that the 10% to 20% base price hikes are intentional. I’m a bit taken aback that you failed to mention these price hikes before and left us having to deduce them from the calculator.
What person in their right mind gave you a positive feedback about this new change?? Not one!!
I believe these are the correct equations for the calculator, assuming that the 20% commission is to be 20% of everything but the design price:
Let base price B = (print price) + (product type price).
Let 20% commission C = 0.25B.
Then net price N = 1.25B; and
total price T = 1.25B + (design price).
Note that C/N = .25B/1.25B = .20 = 20% commission.
Alternatively, if the commission is to be 20% of the final product price, then a little bit of algebra tells us that the product commission is 25% of the base price. The base price here is $14.00. 25% of that is $3.50, yielding a price of $17.50 before design commission and $19.50 after design commission. The above illustration doesn’t give us that answer either.
Oh good spotting! The illustrated example appears to be incorrect. If the new commission structure is not a function of our current product commission, then the current product commission should not factor into the new price!!! The $2.50 they included above should not have been considered part of the base price. The base price is the print price plus the product type price and nothing more. That’s $14.00 for the above example. 20% of that is $2.80, making the new price without the design commission $16.80 and with design commission $18.80 for the above example. The new price is higher than the old price by a bit because $2.50 is only about 18% commission.
If the calculator is modeled off of the above illustration, no wonder it doesn’t work!
My take on this is that Spreadshirt probably earns most of its money from the marketplace sales. Those base prices are not increasing in the marketplace because they know that would hurt their bottom line.
They probably make much less from affiliates overall and realize the bigger affiliates will carry the loss the smaller affiliates will incur from this price increase.
Spreadshirt is only thinking about Spreadshirt. Apparently their affiliates don’t mean much to their bottom line. If they did, they wouldn’t have done this. This was purely a decision based on “how can we get more of the pie from our active affiliates” instead of “How can we treat our affiliates as true partners and make sure this is a win-win.”
Sad!
Exactly Joe! If you look at the before/after diagram in this post, they did account for the price increase in the “After”. They just happened to not mention that in the post. Hmmmm
Notice the shirt is $10 in the before and $12.50 after.
It’s just they minimized this. For example, the basic Tee’s are increasing by $4.49 according to the commission calculator. Might as well say $5.00
If they had actually used a real price increase example that chart wouldn’t have looked as favorable but in that example, it only showed the price increasing by $2.50. Yeah I wish it was that small! I haven’t even looked at the hoodies and others yet but my guess is they aren’t just increasing by $2.50.
I just wish they’d call a spade a spade and stop trying to spin this as this is some great bonus for affiliates. Exactly how is forcing us to charge more to make the same commission a bonus for us?
Higher commissions will come from higher prices, of course, but that’s assuming we can sell the same volume at a higher price.
C’mon Spreadshirt. Re-think this please. I hope you are reading. You are gonna lose a lot of us.
@Confused Shop Owner has just provided another proof that the calculator shows an increase in base prices. He/she is making $6 at a sale price of $16.99 in the current commission structure. Under the new price, as reported by the calculator, he/she can drop the 20% commission, set the design commission to $6, and now the price is $18.50. Spreadshirt currently makes 16.99-6 = $10.99 per shirt, but under the new structure Spreadshirt would make 18.50-6 = $12.50 per shirt, a (12.50-10.99)/10.99 = %13.7 percent increase in base price. If you really mean to increase base prices as indicated by the calculator, please tell us so. I’m assuming that the calculator is still wrong. Thanks!
OK thanks, Thomas! Well you guys need to inform your internal people on this because my contact wasn’t sure. That’s at least good to know.
As I see it now, from using the Commission Calculator – a $16.99 basic Tee in my store that is now earning me a $6 commission (I deleted and moved the shop commission to the design commission) will now have to cost about $18.50 under the new system to still earn that same $6 commission BUT I have to take off the 20% affiliate commission to arrive at that $18.50.
If I include the optional 20% affiliate commission, the shirt will be $21.50 and my commission will be $9.
I’d personally would rather forgo the 20% affiliate commission to keep my price low and sell the shirt under $20.
This is going to be very interesting to see how this shakes out. Yes, Spreadshirt is clearly trying to increase their commission they get from our shops, but at what cost? If our sales drastically decrease because of the price increase, then what’s the point of all this? Everyone will earn less….yes YOU TOO Spreadshirt.
I sure hope they have done lots of testing and number crunching because as I see it, it’s not going to go well for the average shop owner…. especially if you sell at a lower price point.
So is spreadshirt going to be supplying every shop with a users manual after this new move? Seriously. It’s a joke. As if taking money out of every shop owners hand isn’t BAD enough…. you are seriously just making it harder on everyone. Bye-Bye Spreadshirt…. it was fun while it lasted.
I wish someone would answer Joe’s question. I want to know that if we opt out of the 20% commission will that lower the price 20%? My Spreadshirt rep just told me she doesn’t think it does. Then why make it optional? Who would opt to NOT earn a 20% commission if the price is still going to be the same?
I thought that was optional in case some of us want to still compete on price and forgo a larger commission — which I WOULD do.
Someone please clarify this.
I really hope the big wigs are reading these comments. If Spreadshirt’s sole purpose was to increase their income across the board, how will this be with dramatically higher prices and less incentive for us because our commissions our lower? This doesn’t make sense at all.
There’s no way Spreadshirt intended such dramatic price changes. I say we give them a chance to revisit the calculator again. But I agree that the answer “wait until April” helps neither us nor them.
Same Kristen! I have a tshirt that now goes from 22.00 to 34.00 and my commission gets cut in half. Actually 57% less. Will be leaving Spreadshirt as there is no way their new shirt prices will be profitable for shop owners. Hoping they take a HARD look at all the negative feedback they are getting on social media and scrap this plan. They won’t survive it, there is no way.
Here I just checked your calculator:
You would increase the price of a product I’m selling for 18.00 to 32.99. Nearly double. Really? I’m not sure what sort of customers you are now pursuing, but you are going to lose the entirety of your impulse-buyers.
Every article I read on this leaves me more confused. This leads me to think you have unleashed the smoke and mirrors to try and disguise major price hikes.
I agree with Jeremy.
At first glance I thought “Cool, more commissions!” But it’s clear they are raising the prices quite a bit and you have to charge way more if you want to make the same commission. Notice how they tried to minimize that price increase in the post.
And in the example they had the price going up $2.50. Seems it’s going up more than that on average if you use the calculator. And so now we move the shop commission over to the design commission, which will drastically drive the price up in the marketplace. Bye, bye marketplace sales too.
How many people are going to buy a $30 shirt? Not many in my audience. Now Spreadshirt has become more like Zazzle. Charging $25 for a shirt with a $2.00 commission.
This is exactly why I chose Spreadshirt over Zazzle… better commissions. Now looks like you are one in the same. Shame.
It appears Spreadshirt is looking for a way to make more money because overall sales have dropped. So what they’ve done is increased their commission from our shop sales greatly and only giving us a small piece of that. Even if overall sales decline they’ll still get more money per sale. So they may come out OK but it hurts the average shop owner more.
It still seems like a lose-lose overall.
The incentive is great, but what about people that don’t quality for that but were still making a nice amount before? Most people won’t meet that goal for the incentive. Some will come out great, but most won’t.
I hope I’m wrong but this doesn’t look like good news for most shop owners. Spreadshirt will make more per sale, but most shop owners will earn drastically less. But I guess they had to do what was best for their bottom line… not their shop affiliates.
What upsets me more is they act like this is a great move for affiliates, and clearly it’s not. It’s one thing to drive up the price but lower commissions too? This is not good.
Question: If I opt for zero product commission, will the price of the product be reduced by the 20%? I’m thinking of lowering prices by setting a low design commission, but this is only possible if opting out of the 20% actually reduces the cost of the product by that amount. Thanks!
Stop telling people to “wait until April” you fools! It’s obvious from YOUR calculator and what you have published, that spreadshirt is increasing the total price of products, while also decreasing the commission shops can make. What kind of sense does this make?? You are screwing over your shops to make more money? Shops can’t afford to sell 30.00 tshirts! Who’s idea was this? It’s obvious it’s a very bad idea…. on almost every level of business. Bad as in the worst business model I have seen.
I tried the commission calculator and according to it the prices of my products will substantially increase (to prices so high no one will buy them). And although the prices are substantially higher, the profit I make will be less! What kind of sense does that make? This will put my shop out of business!
What’s is going on starting a store for my subscribers
I am so confused. Currently, I mostly add $4 for each design. I don’t add anything to the shop thingy. That way, if someone wants to add my design to their shop, or use it in another design, I get $4. I still get $4 if someone buys the design on anything in the marketplace or from my shop.
If I drop the $4 and go to the 20% affiliate fee, will I no longer be able to get $4 if someone wants to use my design to create something new? Will I then, get nothing?
Or, if they just add my product with my design to their shop, will I get nothing unless I add the $4? I looked at the model for pricing. Those prices are really high. And dropping my $4 won’t help much, either.