Neglected Shops

[PetiteTuques]

I like the commission option. Even though your rate at 12/month is lower than some other sites, I don't sell enough to make that fee. Maybe some people do?

I just hope that the new site will attract more buyers so we can all start making money

[Ahkriti]

Would prefer a 5% commission on sales with unlimited listings - I wouldn't mind that. The $12 per  month is a bit high for me at the moment.

I'm really looking forward to the new site!

[Fairy Cardmaker]

My question: 5% commission unlimited plan is still a "free" plan. It encourages fee avoidance.  List for free, get an inquiry, make arrangements off site to close the deal.  How will you address fee avoidance?

I like my small plan because 1) it's affordable and 2) hitting me in the pocket book keeps me coming here to try and get sales for my fees.  I certainly cannot afford $12/month when I am making $50/year.

I suggest the following three plans:
Commission-only (5%) with limited listings (however many make 2 nice rows in your shop: 8?)  The listing limit is too low for those committed to selling regularly.  It will attract those who can "try for free but pay for success".  The low item limit should also curb iCraft's exposure to fee avoidance (but not eliminate it).

Small Business Plan: $5 per month; 60 listings.  (Banks have small business fee plans, why not iCraft?)

Full-Time Business Plan: $12 per month; unlimited listings.  (The point at which this option becomes more economical than the $5 plan is at 144 listings.  So, if you are listing between 60 and 144 items, too bad for you, it'll cost you more than it needs to.  You would actually be better off with 2 shops of 60 listings (but who wants that?!)  If you can make it over the critical mass of 144 listings, you are laughing!)

What I'm saying is, there's still a nearly free option; there's a small seller option and for those who want to go all the way, they are encourage to jump their listings from 60 to 144 in a hurry (since every day under the 144 is costing you more).

In short, it's the "not committed"; "committed"; "seriously committed" plans.

It's late and I am thinking on the fly.  Feel free to poke holes in my logic.

[Northern Girl Jewelry]

I think that your pricing model is probably contributing to the low number of items in shops.  That, and compared to some other sites that some of us sell on, sales numbers are probably lower here than there.  However, the low numbers of items in shops here contributes to lower sales, so it's a bit of a viscious circle.

I actually have more items listed here than in my etsy shop because here I don't pay a listing fee.  But my sales are lower here than on etsy, because there is less traffic here.  But I still get sales here, many of which don't get completed here because they are with local buyers and there is no commission here.  I sold 2 items that way last week.  

I like being on icraft because my items seem to get picked well by Canadians using replacement engines.  I get sales here I wouldn't get on Etsy.  But I wouldn't be able to keep a shop here at $12/month.  It just wouldn't make economic sense for me.

If you went with the 5% commission model, that would make economic sense for me.  But, I have some local buyers that find me here and that don't complete the transaction here.  Some of those buyers I could get to complete the transaction here, but some of the buyers that I have had aren't completely decided on what they want, we meet in person, I have a selection of items with me so that they can see in person and choose, and we do the transaction in person.  I've has some transaction that start off by looking like they will be about a $30-40 sale turn into $100 sale that way.  I don't want to lose those sales, and I don't want to be a in position of fee avoidance either.  Because the site deserves a cut, as the buyer wouldn't have found me without icraft.  I live in Ottawa, so my local market is significant.  And icraft catches Canadian traffic.  Ottawa is one of my most popular keywords in GA.  

So I don't know what pricing plan would work for both the seller and the site.

[Northern Girl Jewelry]

I don't like Fairy Cardmaker's suggestion of 5% commission on limited number of items in shop (like 8 items) because I think it still encourages neglected shops.  People park their 8 items on icraft, walk away, and they aren't paying anything anyways. 

Actually, even if you allow unlimited listings with a 5% commission, I think you will still have the neglected shop syndrome.  People will be willing to park lots of items here at no cost and not do anything unless someone makes a purchase.  It was happening in the past on Artfire with the free shops.  People there had unlimited free listings and many (not all, but many) of those shops had inattentive shop owners.

So if you actually want to eliminate neglected shops, I think you would need to have a model of small listing fee and small commission, like the current Etsy model.  Or you would need to have a listing fee like you do right now for the different shop plans.

Have you considered simply eliminating the 5 free items option and keep the current 3 tier pricing model and seeing what happens?  Or at least trying that for a while once the new site design rolls out?  If the new design is more SEO friendly, that would help to build traffic, and more traffic and sales could attract more buyers.  Also, with all the crap that has been happening over on Artfire in the past few months, there has been a pretty substantial exodus of sellers from that place.  Many sellers are looking for a new alternative selling platform, and perhaps the new icraft site would be attractive to them.

 

[iCraft Admin]

wow, a lot of good ideas here. Thanks guys! 

I think any venue that deals with commissions, will have to deal with fee avoidance as well.
It's part of a business, I guess. Here is post on eBay about "Avoiding eBay fees".
My thought on this is that it has to be beneficial to both sellers and buyers to deal online, instead of taking business offline.

To sellers it would be getting positive feedback on their store and the number of sales listed, being promoted as a top seller or as the one with the most positive feedback, with a lot of popular products etc.

To buyers it could be getting protection online, as all sales are recorded. They can return items and get a full refund, if they spot a defect later, additional discounts for their next online purchase etc. Those are the things we are thinking about when we are discussing changes to our pricing model.

Sorry, Northern Girl Jewelry, can you please fill me in on what's happening with Artfire? We've been pre-occupied with our own site for a while that haven't been following much what's happening outside. Thanks!

[Northern Girl Jewelry]

There has been a lot going on at Artfire.  Back in August, they eliminated all the free shops, so they went from about 80,000 shops to 15,000 shops pretty much overnight.  They also added a commercial section for resellers.  So basically, anything can now be sold on AF, not just handmade, supplies and vintage. 

Since then, traffic to the site has gone down dramatically, and many sellers, even those that were selling well have seen their sales numbers go down.  In addition to that, the site has been having a lot of technical glitches of all sorts (photos disappearing from listings, text in listings being changed, extremely slow loading times, problems with Google Merchant, an internal replacement that doesn't work properly and more) and the Admin there has denied any possibility that the problems are with the site itself and has blamed the sellers, their browsers, their computers, etc. 

In addition to this, just before Christmas, AF admin announced in a private forum section that they were introducing a new AF Assurance plan where AF itself would provide a guarantee to buyers that if there was a problem with a transaction AF would issue a refund.  This assurance plan would come with an extra $1 per month fee tacked on to the current monthly fees.  This concept did not go well with sellers.  Sellers were upset that their own policies would not be respected, that the selling venue was going to interfere with how they do business, especially as buyers currently have protection through Paypal and their credit card companies and many sellers have generous return policies.  Also sellers were upset because many signed up in the fall of 2010 under a Guaranteed for Life fee of $5.95/month that AF assured would never go up as long as the sellers kept that account active.  It wasn't about the $1 extra, it was really about the bad treatment that sellers felt they were getting.  AF finally decided that those that had the locked in fees would have the option to opt out of the assurance plan, but those shops would be penalized in the replacement results and would have a statement of some sort appearing in their shops about not being a part of the AF assurance plan. 

This assurance plan on top of the problems the site has been having and the big changes of direction of the site has led to many sellers closing their shops there. 
     

[Fairy Cardmaker]

I hear your points, Northern Girl Jewellery, about the neglected shops and the custom and local pick up orders.  I'm not a fan of the commission model either, however, I do have an ear to those people who want to "test drive" the site.  A zero or very low cost model reduces the barriers to entry.

I still think my original pricing model is the better idea (originally posted in another thread).  A listing fee for small shops or flat fee for fuller shops:

Currently, listings that are over your subscription package are $0.20 each.  I'd say take away the free option and leave this as a "pay as you go" option: $0.20 per listing per month.  Once a shop reaches 25 items, they will pay $5.00 which is the price of the 50-listing store.

So, if someone wants to do a trial, they might want to list 10 items.  Another person might try 5.  Another might try 8 (to make two even rows).  Those people will pay something less than the minimum package of 50 listings.  They can continue on like that forever.  If, instead, they find things take off and want to list more stuff, then maybe they will upgrade.

This system works beautifully for custom shops.  Those shops may not need more than 5 listings to show a "portfolio" of their work.  Currently, there could be a huge volume of custom work driven through iCraft that iCraft gets nothing for.  At 5 listings, fees would be $1.00 month.  Peanuts to a custom artist, IMO.  Even $2.00 a month for 10 listings for a custom artist is peanuts, yet more than zero for iCraft (monthly).

Now, it would be costly for a shop that needs 100 items of variety of finished goods to continue operating that way, but $6.00 to list 10 items for 3 months to test the waters?  A worthwhile investment in my mind.

I vote for a pay-as-you-go system for small sellers.

There is no free option in this model, but there is a very economical option.  And, for the orders not completed on-site, iCraft at least gets $0.20 for any person not on a flat fee plan.

[Northern Girl Jewelry]

Fairy Cardmaker, this last option you present seems like a good one. 

I'm glad I'm not the one having to make the decisions. 

[iCraft Admin]

Thank you for a nice summary on Artfire, Northern Girl Jewelry! Interesting turn of events, to say the least.

Great points about pricing both of you! Yes, it will be a difficult decision this time. A lot to consider. 

[Beajoux]

Reading this has made me realize that I'm not doing myself or iCraft any favours by "parking" my 5 free listings. 

I would not be able to afford $12/month, but I do like Fairy Cardmaker's suggestions about "pay-as-you-go" and the "small business plan" as I would definitely be considered a small seller.

Not sure, though, if it would be a big hassle for iCraft to collect only $1 or $2 every month from those shops with minimal listings.

Ainsley

[PillowThrowDecor]

A balanced "User Pay" system seems to be the best of both worlds out there and probably the most widely employed.

A seller doesn't mind paying a "success fee" when they have sold something. 5% is too high. 2 to 2.5% is less noticeable.

Paying a listing fee once for a listing period of 3-6 months (not monthly) is reasonable too. Its a small investment for a seller and generates a cash flow for icraft while sales start to build. Putting a cap on the listing fees to be paid at 100 or 150 is great for a seller but not good for icraft. Conceivably sellers could load their store with products that don't sell thereby burdening icraft system resources without any incremental income for them. Not sure this would be the case for a long while yet as we sellers are a long way from listing enough products to overfill icraft's technological capacity.... further, I don't think there are many sellers that have more than 100 listings or are able to expand their product line to that many.

Getting more new listings on icraft will be key in building the site and generating sales for sellers.  More product generates more views, which attracts buyers and generates more sales, which generates more  prospective sellers who will list more new product... and the the growth cycle begins to expand exponentially.

Maybe in the beginning of rolling out the new site their could be a listing incentive for adding new listings to new and existing sellers like .... X free listing fees if you list X times (multiplied by) 5 during such and such promo week.  I have never sold on Ebay but I think they have, from time to time, "free" listing periods to attract more new listings and new sellers.

Etsy treasuries is a brilliant cross marketing tool. It gets sellers looking at other sellers and generates sales amongst each other and also, Etsy keeps their finger on the pulse of what is of current interest to its viewers. A lot of their front page promotion is curated by members and is in theory, representative of what's "hot" in the online market.... valuable information for ADMIN and other sellers too.  Again it perpetuates more views and involvement from our existing membership.  By the way... the new product emails that icraft are sending out right now are EXCELLENT and hopefully generating more traffic and sales.

By having a balanced sales fee and listing fee, icraft is more insulated from widely  fluctuating revenues in slow markets or seasonal cycles.

Bottom line... icraft needs steady/balanced revenues to keep the " store doors open". As sellers, our job is to "fill the shelves". Finding an equitable, yet enticing business plan for sellers is tricky and I appreciate the opportunity to voice my opinion   I am ALWAYS full of opinion (not always sound).  I have lots of experience... I know exactly WHAT NOT TO DO!

LOL... All I know is that I need to sell A LOT OF PILLOWS as it gives me reason to BUY MORE FABRIC!

cheers
Christine

[iCraft Admin]

Thanks for your ideas, Christine! It's great to see different perspectives.

5% commission was meant to be introduced without any listing fees. Do you think it's still too high?
 
We'll always have a lot less items than those sites that accept vintage and supplies.
For that reason, we thought we need to implement a system that doesn't limit sellers in the number of items they post every month.
Right now we have 3 times more items on hold than live.
Nobody wins from that. We have to store and backup those listing every months. Sellers have a lot less traffic to their pages, as most of their products are on hold and not visible to buyers.

We thought listing fees would do the same - force sellers to hold some products. What do you think?

[PillowThrowDecor]

Minimal listing fees such as the 20 cents that Etsy charges is negligible and more palatable than a monthly fee of 12$ or even 5$. Psychologically  20 cents will not likely cause a seller to hold back listing items.

5% commission will cause some prospective sellers to turn away as I did when I did my rereplacement a few years ago.  I forget which site charged 5%, maybe 1000 Markets? (which has since folded or been absorbed by another site). Also at 5% there is a higher probability of more frequent fee avoidance. I think there will be serious seller sensitivity / resistance beyond 3%

Philosophically, I think a balance of both is good for both but then i don't know what kind of numbers you are working with.

You need to bring your experts in to do a pro forma modeling a few different plans that other successful sites are using... and with emphasis on their revenue streams.  Would a 5% commission on all the sales in the last 12 months on icraft have been a  viable income stream for icraft in light of the new site development as well as the regular service delivery?

Wow... I am so grateful my little brain just has to wrap around pillows

Cheers
Christine

The pro forma models the anticipated results of the transaction, with particular emphasis on the projected cash flows, net revenues

[iCraft Admin]

Hi Christine,

You certainly make a good case for a mixed model of listing fees and commission on sales.
I am still surprised that 5% commission without listing fees could be considered too high. I've seen numbers as high as 15% on other sites.
We've been analyzing pricing model for the past 6 months and still didn't make a decision on which way we'll go. So this discussion is definitely very helpful. Thanks a lot for your input!