Today we’ve announced immediate and upcoming changes aimed squarely at buyers. With a million and a half active buyers, and over four million members, we’re upping our game to serve those buyers better. Happier and more prolific buyers ultimately mean more author earnings.
The announcement is the first in a stream of work we’ve been building towards all year to improve the buyer experience. While we’ve already put out a lot of improvements this year, the majority are yet to come and include heavyweight changes like licensing, search facets and a shopping cart, as well as smaller improvements to watermarking and refunds workflow.
Why the Changes to Fee Structure?
Envato Market is a two-sided marketplace. As a company founded and run by authors, our focus has historically been a little one-sided. As part of our effort to lift the user experience across the sites, we’re changing our fee structure to split into a buyer fee and author fee. Businesses focus on where their revenue comes from, and we’d like to bring buyers more into the picture.
To put it simply when you charge someone money, like a Buyer Fee, the first thing they ask is “What am I getting for this?” That’s actually a good question for Envato to be answering because we’ll end up doing a better job. In fact one of the first things we’re doing is adding a new Why Buy With Us page. This marks one of the first times we’ve had a page deliberately aimed at buyers!
How Do the Fees Work?
When you sell an item on Envato Market, the total list price will be made up of your item price plus Envato’s fee to the buyer. You’ll earn your item price minus any Envato author fees. Those author fees continue to be dependent on whether you sell exclusively and your all-time sales to date.
Our author fee will be 12.5%-37.5% of the item price (note: not total list price) for exclusive authors and 55% of the item price for non-exclusive authors.
For example when an item sells for $100 the breakdown of fees looks like this:
Exclusive Author $100 Transaction
Non-Exclusive Author $100 Transaction
The Become an Author page has a more visual representation of this breakdown, complete with a slider.
Non-exclusive authors see a slight decrease in our fees, as we work towards a more competitive non-exclusive program. We’re expecting this change to benefit authors most in media markets like Photos, Footage and Vectors. This is part of the Media push we outlined in the 2014 Roadmap.
On ‘buy now’ transactions (i.e. not using prepaid credit), buyers pay a handling fee. We’re reducing the fee down to $1 for items less than $10, and removing it entirely from items over $75. Importantly for authors, as of today this fee will be purely from Envato to the buyer (so authors will derive no revenue from it).
Changing the handling fee is part of a plan we have to remove it entirely, and the change away from sharing this with authors gives us flexibility to chop and change it during this period.
Today’s change is also leading the way for our shopping cart release where buyers will be purchasing items from multiple authors at once. We expect to see more conversions to purchases as we continue to roll out these reductions to the handling fee.
Is the move to Buyer Fees and Services a move away from Authors?
The short answer is no. The longer answer is that we’re going to be aiming to do more for both groups. We see serving buyers better as a way of growing the entire marketplace, which in turn will be better for authors selling on Envato Market.
You can expect to see more features aimed at helping buyers in the coming year, particularly around helping them finding things to purchase, helping them make the purchase, and where they need help, getting it to them. This is all in line with our 2014 Roadmap and will be a set of recurring themes in the 2015 Roadmap early next year.
What Author Services does Envato provide?
Just as it’s important that our fees to buyers are reflective of the services we provide, our author platform fee reflects the services we provide authors. Chief among these is access to a huge market of a million and a half active buyers, and the marketing and SEO that powers that market. Secondly we handle the ecommerce services you need to sell – all the legal and licensing work, processing payments, hosting and delivering files, creating invoices and receipts, and so on. And finally we offer authors a platform to connect to other authors, get feedback from reviewers, and be part of a community.
We weight our platform fee to favour exclusives because it’s a lot easier to build a pool of buyers when you have an awesome, distinctive marketplace of items. In places like PhotoDune where our content can be mostly found elsewhere, we have to spend a lot more time and effort to attract buyers, and this is reflected in our fee structure.
Author Driven Refunds
We’re working up a new refund workflow to improve buyer satisfaction, giving them clearer expectations of when and why we offer refunds, and building better metrics around refunds so we can start to analyse this aspect of buying. Along the way we’re working on tools for authors to drive their own refunds.
There are times, particularly relating to item support, where an author wants to offer a buyer a refund. We’re working on a system to give authors the tools to do this at their discretion (and of course our fees will be refunded too). These will be available in the coming months and will give authors more flexibility to give buyers great service.
Until the new tools are released, authors can get in touch with our support team to help get buyers refunded. We already process a small number of author requested refunds in this manner and can continue to do so – though it’s a very manual process at the moment and has some delay. Our improved tooling will make the whole workflow a lot more efficient.
API / Screenscraper Changes From the Fee Structure Change
You’ll see that we’ve updated the way we describe our fee structures across Envato Market. Importantly statements and the API no longer show rates and total prices in the way that they used to. We apologize for the inconvenience this causes tools built on the API and screenscraping and are getting in touch with the creators of those tools to get them updated. You can read more about the API Changes in this post.
Answering Your Questions
There was a long period in Envato’s history where our capacity for change was absorbed in expansion. This year we’ve been focusing down hard on improving the Market experience. Overall this is a great thing, however it does mean we’ve got a lot of changes come through in quick succession!
There are a lot of different types of changes you’ll be seeing. Some are pretty low impact like the new footer or improved terms & conditions language. Others have long-reaching ramifications like our first attempt at item support policies last week, or today’s fee structure adjustment. Still others will have high impact for buyers, but less for authors – like the shopping cart and search facets.
Throughout this change period, I’d like to assure the author community that we’re working towards a better Envato Market and that we’ll be available to discuss on the forums, and as we did last week – respond to feedback!
With that said, I’ll be around on the forums over the next few days here on this thread to answer questions about these buyer services announcements.