CafePress, a San Mateo, California based user powered e-commerce site has raised $8.3 million in venture funding according a regulatory filing. Return backer Sequoia Capital also participated in the round.
CafePress allows users to create, sell and buy T-Shirts and other such print items such as greeting cards, holiday gifts etc. The site has more than 6.5 million members and has 150 million products listed on its pages.
Recently CafePress began competing with the artists for whom it acts as printer and shipper.
CafePress rents web shops to its artists. The artist creates a website page and manually loads the desired blank products. The artist imports his image onto each product, arranges the products on the page, describes the products, titles the products and tags the images.
Initially, the artist would set a markup and received the markup for each product sold.
However, recently CafePress began competing with its artists, using the artists’ own images. CafePress created a marketplace where a customer can search a keyword. That search brings up artist products. When the customer buys from the marketplace CafePress pays the artist 10% of the price CafePress set. Both the customer and the artist lose money. If the artist’s shop sells a t-shirt for $21, the artist makes $3.01. If the marketplace sells the same shirt for $25, the artist gets $2.50. The customer pays $4 more, and the artist gets $0.51 less.
CafePress tells artists to “promote your own shop,” but CafePress buys Google adwords using the very image tags the artist provided.
CafePress justifies this bait and switch of service terms by telling artists they can opt out if they don’t like the new terms; however, many have spent as much as 7 or 8 years creating as much as 88000 images.
In spite of their sweat-equity, many shopkeepers (content providers) are building shops at other print-on-demand companies and then closing their CafePress shops due to the broken faith and trust, the financial hardship CafePress has delivered into so many lives, and the huge amount of time and dedicated effort all lost in the momentum of their own businesses. Would you keep your AMOCO station franchise if AMOCO built a company store across the street from you?
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