Just doesn't make sense

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.

This is actually the first percentage complaint thats had a real example (through the comparison to Amazon). And it makes total sense. No one would sell through Amazon at the rates they offer on TF.

But basically it comes down to this. They can take such a high percentage because there is no where else to sell with even remotely as much traffic as we get here.

I have nothing to nag, answers above explain well but it would just be nice, just nice if the commission barrier for the exclusive author gets raised from %50 to %65.

Most authors deserve that.

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.

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

Those are some pretty solid and well thought out calculations, but its all comes down to what I said earlier. There simply isn’t any other place to sell templates with even a fraction of the traffic or user base envato already has. And thats how the rates stay so low. There is no competition offering anything better.

Which is why I sell here.