In 2016 Envato Team introduced Author Driven Pricing on the Envato Market. Some of the authors were happy to see such kind of innovations and some of them got annoyed because of it. Anyway, there are no one left indifferent to ADP.
We’ve chosen some random items that had rapid increase in sales during discounts and compared numbers with their average sales without discounts for the same period of time.
The most important thing about discounts is finding the perfect balance between the price of the item and the possible cost of support.
The definite underachiever in this is TheFox: it made even less revenue while discounts, but got more customers for the same period (63 sales for $3717 vs. 86 sales for $2494).
But even that wouldn’t compare with Fevr, that made twice more revenue but got almost 11 times more customers.
UPD: The totally different situation happened with ROSA. The item got same amount of sales during the week after the price was increased(9th of October - 15th of October) but more revenue than during the week before price was increased(2th of October - 8th of October). This can be defined as a great move and a good, considered use of ADP.
It’s notable, that every item from the selection got more increase in sales(customers that may request support), than in revenue(except ROSA). Here are other items that we’ve chosen: 907 - 5 times more sales and 1.5 times more revenue. The7 - 2.7 times more sales and 1.8 times more revenue. Bimber - 2.7 times more sales and 1.4 times more revenue. Foundry - 2.5 times more sales and 1.3 times more revenue. BeTheme HTML - 2.2 times more sales and 1.1 times more revenue. Sahifa - 9.4 times more sales and 4.8 times more revenue.
That can mean two things: at first, if you as an author aren’t confident enough about quality of your items maybe there is no need to lower your prices in the pursuit for number of sales? Secondly, if your items are selling good enough for their usual price there may be absolutely no sense for discounts.
What do you think on ADP and discounts in general? Can you give some examples of positive effect of discounts?
Don’t forget that you do not earn the same amount, because of the fixed buyer free. Revenue is not same as earnings here.
For example, let’s consider everyone is an Elite author. When you sell theme for 59$ you get roughly 41$, price of 49$ gives you roughly 32$, while selling at 15$ gives you just 2.6$.
907 WP:
standard price earnings are 27x32=864$.
sale price earnings are 137x2.6=356$ (much less)
Bimber WP
standard price earnings are 33x32=1056$.
sale price earnings are 89x11.3=1006$ (bit less, even given the 3x sales increase which is not sustainable)
The7 WP. Not sure where you got the numbers of 1026 sales for The7 WP, last week it was 536, which means much less earnings than standard price. So if we take that number, we get:
standard price earnings are 381x41=15621$.
sale price earning are 536x23.6=12649$ (3k less)
IMO discounts are generally BAD for authors, and in the end of the day authors earn less.
I think the above info is extremely misleading and potentially harmful to the marketplace since it doesn’t take into account what the author actually makes out of the revenue listed. Like MNKY noted, as the author lowers the price, the author will get increasingly less of a share of the revenue due to the fixed buyer fee. So, in the case of Fevr, if they are supposed to earn 60% of the item price, then here is what they would earn under both scenarios above:
20 sales at $59 = $658
217 sales at $13 = $151
Of course, the table listed above made it seem like Fevr was making more than twice as much money for the author when the price was lowered to $13, when in reality, they are making significantly less for themselves when the price is set that low.
I would suggest that authors and Envato be very careful about encouraging any further lowering of prices on the marketplace as it only cheapens each of our products and the marketplace as a whole.
Oops, I totally forgot to mention that I was counting general revenue, not the authors’ actual profit. My bad:)
According your question about The7 sales. I took the lowest price items were sold for and compared sales with sales for the highest price items had. Thus, The7 were sold for $39 from 24th of November to 4th of December and it got 1026 sales during this period. And the other number were taken from 25th of September to 5th of October. Here’s the report: http://stattie.com/#!report/243
And here are price changes for The7: [details=The7 price changes]
Here are the periods of time for every item listed above in the article:
907: 30th of October - 6th of November vs. 9th of November - 15th of November. You can see it here: http://stattie.com/#!report/245 . Here are price changes: http://imgur.com/kyTAUYQ
You’re just counting Envato’s revenue. You’re not counting author’s profit, or even their revenue. The list price which is what your calculations are going on, is based on Envato’s gross revenue.
For your report to have any kind of weight with regards to the benefits of discounts etc, for authors, then it would need to based on the item price… the list price minus the buyers fee. That’s the author’s gross revenue, minus the author’s fee to get their net revenue. Even that’s not officially ‘profit’ as there’s quite a bit more to take into account before you get to that. But still, interesting figures!
Well, I wasn’t actually talking about benefits of discounts. The main idea of the original post was to show some figures for different items and different authors. For most of the items I’ve taken as an example difference between general revenue(item price multiplied by the amount of sales) before and during discounts aren’t so impressive. As for me, that is quite obvious, that authors net profit will be even less noticeable, so I agree with you on that.
We genuinely believe that ADP can be profitable or, at least, “lossless”. We’ll soon introduce an advanced feature on Stattie, that will allow to predict what price will get the most sales and profits for an upcoming and already existing item.
I did check your Stattie for a while.
Thank you for creating such a great reference resource.
Wanna be a paid member for your service. However I think you should connect more closely with Envato regarding their API usage.
I think you missed some info and some items are not updated correctly. Also I cannot find some information for some items (that have just been released).
Great work @Stattie!
Thanks a lot!
Regarding Envato API: it was a considered move not to use Envato API. At first, we also gather statistical data from wrapbootstrap and we are going to add more marketplaces later. As far as I know, not so many marketplaces give access through the API. Secondly, we don’t want for Stattie to be dependent on API changes, because nobody except Envato Team knows when will they happen and what will be the changes. And the last, but maybe the most important: you just can’t make such a system using API. So, we thought “If we can live without it, why should we use it?”.
Some items can be updated not so correctly, I agree. This happens because of different time zones our and Envato servers located in. I often see items on ThemeForest, that are, for example, “added on 17th of December”, but it’s still 16th of December at my place and all calendars agree with me:)
You can contact me in pm or at kirill@stattie.com, I will be happy to help you out!
@Stattie I should mention that ROSA was never discounted — the price was increased from $59 to $75, as it happened with all of our themes. We have written how it goes here.
To avoid false statistics, you should sync your system clock to Australia Timezone like Envato.
It’s like we have to set timezone of our analytics to Australia timezone so the information is correct and synchronized with Envato API.
And the most important thing, the top list are created base on that timezone.
Very nice and bold move @pixelgrade, I can imagine how hard for you guy to come to such decision.
Yes we love what we do and deserve to get worthy value for our effort.
