Our item price is fall down day by day. Authors are not so happy with this. We are focusing on our product betterment but if our price fall down then how can we earn ?
A lot of authors have this problem these days. It can be because of Christmas, New Year holidays and many other reasons, who knows?!
If your price is falling day by day, and it;s as a result if author driven pricing, then surely you’re the one who is dropping the prices day by day?
Actually i am talking about our envato community. I am not talking about my price. I think you didn’t check my profile. I think me and you are belongs from the same community. The envato community right ?
So why aren’t you happy with other people reducing their prices?
Actually if some one keep his products price low then the other new authors are reduce their prices to compit with them and as a result the market budgets fall down. If envato keep the budgeting on their own hand then they will understand the actual value of that product which is we make.
Suppose in previous buyers getting a WordPress theme for $59 but now they can get it within $29, $25, $20, $19 and so on. I think this is not good for our business
An item is worth only what people are willing to pay for it.
If your theme is worth 59$ then keep it at 59$. No need to enter the price war if you are not selling cheap stuff. If somebody is looking for a high quality theme, he’s going to be willing to pay that amount. The price is not the decisive thing in that game. And I think the search system doesn’t sort the results by price by default, so it shouldn’t affect your visibility neither.
I think it’s more of a illusion / fear thing that causes people to enter the price war without realizing it probably doesn’t affect their sales counts that much. But it definitely lowers their income.
You think so because you’re in different market (audio). Your single item prices vary from $8 to $19. Sound packs vary from $28 and above.
But do you know what does it mean for HTML dev to compete with WordPress themes priced as HTML templates? Previously standard for WordPress theme was $39-$59, now they are priced $13-$17 (this is what HTML templates used to cost).
What would you think when sound packs prices will drop from $28 to $9?
I sell many of my tunes on another author driven pricing marketplace with price tag 45$ and I have no problems with the sales themselves.
Like I said, if you have a good quality Theme, there is no reason to believe a customer who is looking for your Theme wouldn’t be willing to pay you 50$ for it. I don’t believe many customers are on so tight budget that they couldn’t pay more than 19$. It’s just a matter of market panic if you believe that the price is the decisive factor. It is just a matter of how can you make the customers find your Theme in the first place.
You still don’t see a point. WordPress is used to cost more expensive because it has dynamic nature, HTML was cheaper because it’s static. And there was a niche for converting HTML to WordPress for some money. Now everything goes to cheap WordPress themes, and HTML are getting redundant (yes, it has some other use cases but they are not so spreaded).
You mean that cheap dynamic templates are taking market from static html? That might be true, but I don’t think preventing author driving pricing would be a reasonable solution. It tells more about the need / role of static html and that as a category it might not be that well founded.
Yes, the need of something is one of the factor of price. As well as cost of production which varies for different countries. You can price your item at $20 or $40. But there is a lot of authors for whom $5 or even $1 can be a decent price for their labor, and they are prevalent in this saturated market. In a long run their $1 items will break everything on the market - popular items are just only $1, popular authors are $1 bundles creators. The fact that they don’t hurt you can be that customers have not reveal $1 items yet. You can argue that expensive items have QUALITY, but don’t fool yourself that $1-guy can not create similar product.
Wp themes are not the people will buy quality goods product types. Majority of premium themes do not code. Those items that have the critical mass are going to sell woth no sale price but new items will not get that high with “normal” prices. You had a lot of examples of new themes with 19$ prices and big sales. Or just check jupiter theme on popular list they were on cyber.momday sale and they got on 2 place. They got there price back up and got down again. Now they have again a sale and again second place. And again envato does not care fixed fee gives them more proffits overall prices fall, discount bring more sales and Envato earns more.
How do you work that one out? Lets say you’ve got an Elite Author… prior to ADP Envato would get:
$17.70 for a $59 theme
After ADP, they’re getting:
$17.88 for a $59 theme.
$16.63 for a $49 theme.
$15.38 for a $39 theme.
$14.13 for a $29 theme.
$12.88 for a $19 theme.
$12.13 for a $13 theme.
As you can see, most outcomes where people reduce the price, results in Envato getting less money. So “envato does not care fixed fee gives them more proffits” isn’t entirely accurate… especially when you’re talking about people reducing their prices. If you’re purely on about people increasing their prices (or keeping them the same), then your statement might be accurate, but I’m only seeing people complaining about lower prices in this thread, not higher ones.
Your math is right on. But your inference is wrong.
With the introduction of ADP, Envato fixed the buyer fee for WP themes to $12. Since the rest of the fee structure remains unchanged, I’m going to focus only on the effects of fixed buyer’s fee on Envato’s earnings.
Prior to ADP, the buyer’s fee was 20% of the sale price. If Envato had continued with the percentage-based fee structure post-ADP, they would have earned $12 buyer’s fee for a $60 WP theme, $8 for a $40 theme and $2.6 for a $13 theme. Instead, with fixed buyer fee, their revenues have increased manyfold. They are earning $12 for each WP sale.
Here’s what this strategy explains:
Envato was never bullish on the idea that ADP would increase the average sale price in the market. If they had reasons to believe that, then like what any other sane company would have done, they have would continued with percentage-based fee structure to earn more moolah per sale.
In fact, they were quite sure that ADP would result in price wars and lower the average sale price of items across market. And like what any other sane company would do in such a scenario, they safeguarded their profits by fixing their profits per sale.
This is nothing but a clever business strategy to attract more customers to a marketplace where authors would offer cut-throat prices for a decently built item.
Michael Schumacher once said, “You can compete with a better driver but not with a better machine.” The same analogy stands true with the pricing strategies of authors. You can compete with an experienced author from any country by learning new skills but how would you compete with a skilled author who has the advantage of a lower cost of living in their country? They can create a great product and still manage to sell it for pennies, and live a comfortable life.
Thoughts? Comments? Excuses?
Well it seems to me that they had the foresight to see that if they didn’t fix the buyers fee, then it might result in a massive drop of revenue.
Themeforest is their biggest source of income, so if everybody reduced their prices, and if their revenue from a $13 theme was to drop from $12.13 to $2.60 then they’d probably go out of business within a year. Or if they made a load of cuts then they could probably hang on for longer. What would that mean… less people on the marketing team, less people on the fraud prevention team, less reviewers, reduction in money for affiliate promotions, ditch the Elite rewards, get rid of competitions, the forums, increase the fees?
They made a sensible decision that will safeguard their revenue if the authors go crazy and start accepting $0.85 commission for their themes by dropping the price considerably. Now all the authors have to do to safeguard their revenue is to not drop their prices considerably and accept $0.85 commission for their themes.
So yes, it is a clever business strategy. People seem to complain when they make clever business strategies and they also seem to complain when they make what they feel are stupid business strategies.
Do what people have been doing back in the real world for quite some time… reduce your prices, move countries, or compete on quality rather than price.
You are constantly missing the point. We did not sign for this. They had plenty of options but they chose the one that will make authors much harder time.
And about your calculations, the main income is the so-called buyers fee the rest is 12.5% of the author’s fee. Lowering the price brings that authors fee down but the higher sales accumulate the buyer’s fee.
Meaning they are not affected as we are. And with campaigns that Envato organizes which they advertise as Envato sales, the buyer’s fee stays untouched. For us to get the same income on a 50% discount we have to sell how much more? They do not. I agree its a genius move bring prices down and overall sales up without risking their profit much.
And stating that authors should move to another country, well that just…
Envato is not an open world market if that was the case many things should be different. The exclusivity part for example, then to not be able to withdraw money any time you wish, more options for bundling, group discounts, total control over items and your items page, offering the gift for purchases, and other marketing options.
This is not a market as others. Eiter you give an absolute control or you do not at all.
You’re constantly missing the point as well. Of course you didn’t sign for this, it’s not our business, it’s Envato’s. If they increased our commissions by 10% would yo complain that you didn’t sign up for that, or is it actually the decision that you’re upset by, rather than the fact they didn’t run it by you first?
And? You said that that the fixed fee gives Envato more profit, in relation to a thread that is discussing people considerably dropping their prices. If people are considerably dropping their prices then the fixed fee gives Envato less profit… although they were clever enough to implement the fixed fee so they didn’t have catastrophic reductions in profit.
He asked what the options were, I stated the available options. I’m not suggesting he should, but to leave it out wouldn’t cover all the options.
Do you know of any marketplaces where you have absolute control? I’d be surprised if there were any, I’d also be slightly surprised if there were any that offered no control at all. It’s very rarely black and white.
I can understand why on the surface, it seems as though Envato is taking advantage, but in reality a fixed buyer fee is one that makes sense in this type of marketplace in areas where there is author-driven pricing. It stops authors from lower their prices below a certain threshold.
There are other marketplaces who offer better control, however there are still things that are quite unique to Envato. Things like an API, targeted traffic (this is where all freelancers hangout and use our work daily), direct payouts to your bank or paypal(seems like a no brainer but hard to find else where), good up time, big community, a constantly evolving marketplace etc (keeping it short)
Even if we look back to the recent changes such as VAT for instance, it takes away a lot of burden from our accounting. Well along with that we also got taxes which I do not like personally but who likes taxes?
I think overall, this has been a busy year for Envato and hope this evolution brings a nice, profitable 2017 to all of us!