Recently Zazzle made changes which will potentially lower the amount of money some designers, the people who actually create the graphics for them to print on their products, can earn. Until this change, designers who sold a lot of items were rewarded with a volume bonus in addition to their basic royalty. That has ended. You can read my earlier thoughts on this HERE
So how can the people who create the designs maximize the money they can still make? Play around with the royalty amounts before posting the item for sale. I’m not talking about huge profits here, but those extra cents can go into the designers pockets instead of to Zazzle if the designer pays attention. The goal would be to maximize the royalty amount earned while keeping the price lower for the customers. Below is a chart I made to show exactly what I mean. This chart is based of the product pictured above.
At a 10% royalty rate, an item selling for $52.45 gives the designer $5.25. At 11% royalty, the price to the customer remains the same but the designer makes $5.77. Sure, there is ‘only’ a 52 cent difference, but that is 52 cents for the designers pocket instead of for Zazzle while keeping the price for the customer the same.
As you can see from the chart, at 11.1%, the cost to the customer jumps up by $1.00 but the royalty earned by the designer only increases by 16 cent. In my opinion, it’s better to look out for the customer by not increasing the product price by $1.00 to earn that extra 16 cents.
It’s business. In business everyone wants to make money, but in light of the fact that high volume sellers have lost part of theirs with the removal of the volme bonus it seems only fair they get a bigger share of the pie on regards to their royalty earnings, at least in my opinion.
Currently Zazzle charges designers a 5% “transaction fee” if you set your royalty rate at 15% or above. Below is another chart of the same product shown above in that royalty rate range.
Note that at 14.8% the cost to customer jumps by $1.00 but puts an extra 20 cents in your pocket. NOW look at what happens at 15%. That’s right, you make less profit due to the 5% “transaction fee” Zazzle charges you than you would at a lower royalty rate of 14.6% PLUS your customer is charged an extra dollar.
Speaking for myself, in this position I would set my royalty at 14.7%. It keeps the cost to my customer from going up by $1.00 and I would still make more profit than I would at 15% because of the “transaction fee.”
Just something to think about when you are setting your royalty rates. Hope you found this article helpful!