Posts by nickclarson

Yea content is usually my downfall. Hence the blank spaces

Hopefully I can come up with something that will bring it together better.

Haha funny. Do you mean a manager of this site or your site?

Thanks for your comments

Nick

http://www.flickr.com/photos/nickclarson/3250767555/in/set-72157613321434164/

Just looking to see what you guys think. Any comments/ideas/etc would be helpful. I’m planning on turning them in to html templates and submitting them to ThemeForest.

I was complaining at first about the commissions that TF gave out, but I decided what the heck and pulled these out of my batch of unused ones.

Nick

jscheetz – I am not disagreeing with the system. You may have read this thread wrong. The reason I haven’t tried it yet is because I was curious about what others thought. Hence the motivation for me to create this thread.

turkhitbox – That actually makes a lot of sense. Definitely not fair, but I guess that’s just how their system works and one has to deal with it. The only thing that bothers me is knowing the money I make on here is only 25-30% of the total money made off of MY WORK . It’s kind of insulting really if you think about it that way.

Mastergreed – Please don’t insult our intelligence. I think we all understand what passive income is and how it works.

Yes I do, that’s part of the reason I was curious about this.

@nickclarson – It was pretty amusing to read your post because you sound exactly like I did most recently a few days ago. When you run the numbers, calculate everything out, ThemeForest simply makes a large profit from author’s work.

Like clarklab said, there really isn’t any other competition. BUT , unless you have run a business the scale of envato, you really don’t know all the little and big things they pay for. Those numbers add up really fast as I’m sure you know.

Jeffrey said something awhile back that I try to keep reminding myself about… ThemeForest is one of the only market places that is NOT hanging on by a thread. All the other places that pay higher commission can’t afford to keep going let alone expand.

In the end, ThemeForest / envato is a business. They are making sure they can pay their bills, employees, make a profit and set some money aside for expansion. As much as I would love getting 65% and think that author’s do deserve more… I would much rather get 50% and see ThemeForest continue to grow rapidly so that my sales also grow just as fast and in turn I make more money at the end of the day.

Also remember, envato has a proven modal of this that has been running for years (FlashDen). They’ve spent money on their research and figured out the “sweet spot” of the market. I’m pretty pessimistic about these pricing structures but after a lot of thought, I think I will just trust them.

Oh and if you know that someone is illegally sharing your files, let them know. They are stealing from envato as well as you and at least they have a legal department that can do something about it.

I def. agree that with such a big business there are going to be many other costs involved. However as a giant company I do think it’s in your best interest to run an efficient, cost effective business. There are ways to minimize spending/costs while maximizing profit even if you do run a large scale company. There has to be, otherwise what’s the point in becoming a big business anyway? If I knew that I could make more money on my own with maybe one or two other people I would never want to turn myself in to a big company. So there’s obviously profit advantaged and other reasons to forming something big rather than just staying small. Either that or someone made a big mistake along the way.

So I guess that just brings me back to what I calculated before. There should be no reason in my opinion that they aren’t churning at least a decent profit off this site like I calculated before. Regardless of if they are a big company or one person. If they aren’t that leads me to believe they have some flaws in their “big company” model and maybe need to rethink a few things.

I hope they do have things figured out. I’m honestly hoping they HAVE spent money and time on research to figure this out like many people have been saying.

Costs include…

site hosting, mucho advertising, maintenance, me!, reviewers, blog authors, credit card processing, the dev staff, etc.

And sure – there’s some profit. It takes many many people to create these marketplaces. Don’t Collis and the gang deserve something for their time?

It adds up quickly. There’s no use kicking a tired duck. It will be discussed – come January. No promises, but everyone will talk it over. That I can promise you.

Yes well we are talking solely about TF, and if it’s costing too much to have a blog author to make posts on the TF blog, then maybe they shouldn’t have one? Ok so lets say there are 30 posts per month, if they take an hour a piece and they are paying $25/hour that’s still only $750/month. Unless of course they are doing that thing like on nettuts and such where they pay $150. Which is a very nice thing to do, but I’m talking about an efficient profitable business model. Many people, including me, would PAY THEM to post on one of their blogs.

I’m just saying, I’m basing this upon the fact the TF has a very efficient and cost effective business model. If they are constantly paying TEAMS of developers to develop sites like this, then they aren’t being very cost effective. One good developer could build/program and maintain a site like this (by maintain I mean maintain the code not the servers). Even I’ve built systems more complex then this on my own time, and I wouldn’t even call myself a professional programmer. However if you are talking ebay or amazon with much more complex systems, then you will need teams of developers. I guess I’m not sure what you mean by dev staff. Building and working on systems similar to this myself, I just don’t understand why you would an entire team of people working on it 24/7. There’s only so much that can be done. Then once all the bugs are out, it’s just a matter of paying people to make one time additions.

Sure this might not be how TF is doing things. I’m just stating my opinion on just how I would do things to be the most cost effective and efficient as possible.

BTW I ’m not trying to say they didn’t do an amazing job with TF, because they def. did I love the site from what I have seen of it. I just noticed right a way that the commission seems a little high for what you’re getting. Compared to other marketplace sites.

And clarklab. That’s kind of part of my point. It’s unfortunate that because they are the only site like this with traffic that they have to charge so much. However on the other end of things, I would probably be doing the EXACT same thing until a similar site like this came out. My point was just that I just felt designers should be getting paid more for their work!! Which it sounds like most if not all of you already realize and agree with.

Oops I forgot about commission for referrals.

Anyway, I guess my main point is exactly what onuro said. Sellers IMO should definitely be getting paid more than they are now.

As far as the amazon thing goes. It’s all relatively proportionate. With having a bigger site comes more COST . Yet somehow they can still afford and make HUGE $$ off of much less a commission.

HMM this discussion has really almost given me a few ideas about my next project… hehehe

So if someone stole my template they are going to use their legal team to help me? All I could find in their legal information is this:

“8.2 To the extent permitted by law, any condition or warranty which would otherwise be implied into this Agreement is hereby excluded. Where legislation implies any condition or warranty, and that legislation prohibits us from excluding or modifying the application of, or our liability under, any such condition or warranty, that condition or warranty will be deemed included but our liability will be limited for a breach of that condition or warranty to one or more of the following:

if the breach relates to goods: the replacement of the goods or the supply of equivalent goods; the repair of such goods; the payment of the cost of replacing the goods or of acquiring equivalent goods; or the payment of the cost of having the goods repaired; and if the breach relates to services: the supplying of the services again; or the payment of the cost of having the services supplied again.”

So it sounds like they are basically limiting their involvement in any legalities to just replacing the goods or paying you back.

I also think bandwidth and hosting is relatively negligible to the profits they are making off of each download. Each download is more than payed for with each purchase.

Lets do a little Fermi problem with this. Based off the november popular users and how much they sold lets be conservative and say 1300 templates were sold in November. Looks like the most popular themes are the html templates which sell for around $10-12. So if we consider that some higher cost wordpress and joomla themes were sold as well lets have the average price per theme be $15 (also a relatively conservative estimation). That comes out to $19,500 in november.

Of course now we have to include commission. Lets first assume that most users haven’t made over $500 in sales so they cannot be exclusive members. Looking at the payment rates I doubt any user has sold over 30k to get 50% commission and even if there are users that have they would be huge outliers. Based on that we can conclude that the maximum commission that is being payed out right now is 37% (regardless of anything we are saying we can both agree that is very low). Lets just use the 80/20 rule and say 80% of the users are selling 20% and 20% of the users are selling 80%. Lets over estimate (to make up for our underestimates) then and say there is an average commission of 30% being payed out.

That means based on our estimation, TF made $12675 in profits during the month of November.

Other costs would include a dev theme and advertising of course. As far as advertising goes though, my guess is use most of their other sites to advertise TF for free. Even if they spend 2k advertising a month that’s still over 10k left over for the dev team. Being a dev for over 10 years in my opinion if they have paid over 2-3k all together up to this point for this site to be developed they haven’t spent their money very efficiently (or wisely).

Also can’t forget about the cost to have reviewers review the template. There are currently 490 templates at TF and taking our previously calculated cost of $5 to review each template, that comes out to $2,450 TO DATE cost of reviewing the templates. This is based on paying reviewers an outrageous $25/hour to review and assuming they can only review 5 templates per hour. Even though I’m sure a reviewer can review faster than that. Otherwise again, the system wouldn’t be very efficient and TF would have to take a look at how to speed up their reviewing process.

So to conclude assuming every template on the site was added in November that still leaves us with roughly 8k in profits to toss around at all the other little costs you can think of.

Also remember all the templates weren’t added in November they were spread out over the time since TF has been opened. So maybe only 100 templates were actually submitted in November that would mean TF had a profit closer to 10k.

This was a rough estimation of course but by the way Fermi problems work hopefully we did enough under and over estimation to even everything out to a respectable value.

Either way, you can see that it’s very possible to make a TON of money with this business model if executed properly and efficiently. It’s also very realistic to assume that TF is at least making some sort of profit with this.

I hope that you can now at least understand where I’m coming from.

Why is Theme Forest taking so much commission when you sell your OWN work? I feel it should be more like amazon where they take out a small percentage. This is considering you’re the one who put all the effort into making it, and Theme Forest is just a medium for you to sell it.

It’s like if you were to sell something off ebay or amazon and have them take over 50% commission of what you sold it for.

Just doesn’t make sense.

I would love to be Theme Forest right now. I’d be making bank off of sitting around doing nothing and watching people sell their own stuff. Maybe having that much commission is to pay for the people who review all of the templates. Still, if you’re paying someone $20/hour to sit there and review templates you’re still going to make a lot of money.

If someone can review even 5 templates an hour getting paid $25 per hour, that comes out to $5 to review each template. If a template sells for $10 they make that money back in the first sale.