If something is still unclear from this, please let me know but I hope this clears it up.
Again I don't hate you and I don't think your deliberately not telling the truth, but I can absolutely state one of us doesn't get it.
Let's take a look at this..................
1) An order is placed. The cost of the print + shipping is paid and collected by SmugMug.
1a) We collect: cost of the print
1b) We collect: cost of shipping
1c) We collect: any additional Pro profit
No argument with the above.
2) Bay Photo charges us for the cost of the print (note: they do NOT charge us for shipping).
Here is an issue. Bay charges you the same price as it charges it's other non SmugMug customers for the print. Receiving the same profit margin as received from non SmugMug purchasers, but doesn't ship the product through their Fed X account, keeping the extra / additional profit by having SmugMug pay for the shipping. IE: charging SmugMug more then their other customers.
3) We pay Bay for the print, based on what was collected from the customer (1a).
Fine.
4) Bay Photo turns the order over to FedEx.
OK
5) FedEx sends us the bill
Why? They ship and pay for shipping to their other clients. Why not SmugMug?
6) We pay the FedEx bill, based on the shipping collected from the customer (1b).
Why would you enter into an agreement that has you paying more than the vendors other customers????
7) We send the Pro Profit (1c) to the Photographer, minus the 15% fee.
Fair.
If something is still unclear from this, please let me know but I hope this clears it up.
More Detail:
1) An order is placed. The cost of the print + shipping is paid and collected by SmugMug.
1a) We collect: cost of the print
1b) We collect: cost of shipping
1c) We collect: any additional Pro profit
2) Bay Photo charges us for the cost of the print (note: they do NOT charge us for shipping).
3) We pay Bay for the print, based on what was collected from the customer (1a).
4) Bay Photo turns the order over to FedEx.
5) FedEx sends us the bill
6) We pay the FedEx bill, based on the shipping collected from the customer (1b).
7) We send the Pro Profit (1c) to the Photographer, minus the 15% fee.
If something is still unclear from this, please let me know but I hope this clears it up.
Sorry, but nothing is clear. Why on EARTH does SM go through all of those steps? SM should be able to transmit an order to Bay no different than anyone else. Shipping should be $1.50 for any order of $12 or more. I quoted the whole list above because that process is absolute insanity. Why isn't it something like this:
1) An order is placed on an SM site.
2) SM collects the money (print cost + markup + $1.50 shipping), and transmits the order to Bay.
3) Bay bills SM (what any other customer would be billed, print cost + $1.50) and ships the order.
4) SM takes 15% of what they collected, and forwards 85% to the photographer. [edit] (Obviously I am referring to the net left over here, not the total amount collected)
Any other steps are completely unnecessary, and apparently VERY expensive. No one here is talking about someone ordering a 0.19 print and expecting free shipping. We are talking about larger orders (certainly $12+) being charged some imaginary shipping that Bay themselves does not charge.
If that's not clear, please ask. I don't how much more basic it can be.
Hehe, Sam answered while I was writing my reply. Basically the same response Except I forgot the obvious point he made that SM shouldn't even be paying what a normal customer pays, as my example assumes. Volume = discount, at least in every business I have ever been part of.
Can I add in something else that we all should agree on? Do we all agree that SmugMug is also a business that needs to be profitable in order to continue to survive as your beautiful, personalized home for your photos?
Can I add in something else that we all should agree on? Do we all agree that SmugMug is also a business that needs to be profitable in order to continue to survive as your beautiful, personalized home for your photos?
Of course we agree on that.
However... you already take a 15% cut and charge $150-$300 a year. If that is not enough, then the business model is broken.
Inflating shipping charges to hide taking more profit is not an acceptable way to do things. You still haven't answered why I have better terms with Bay than SM does. Of course, we all know SM does, so we are back to the price gouging on shipping, which at least has finally been admitted to (by saying it's necessary to be profitable).
You still haven't answered why I have better terms with Bay than SM does. Of course, we all know SM does, so we are back to the price gouging on shipping, which at least has finally been admitted to (by saying it's necessary to be profitable).
We're a middle-man. Middle-men always cost more than going direct, though we try to limit it as much as we can. For a long time going through SmugMug was easier than going through BayROES, so our service, which came at a monetary cost, has a usability benefit with that cost. Bay now has their own web ordering system, and I imagine some of you will prefer to go direct through Bay. We understand that will happen but we're still providing you and your customers with a great integration/service to enable you to take your SmugMug online presence and make it something you can touch and feel (a print).
However... you already take a 15% cut and charge $150-$300 a year. If that is not enough, then the business model is broken.
Inflating shipping charges to hide taking more profit is not an acceptable way to do things. You still haven't answered why I have better terms with Bay than SM does. Of course, we all know SM does, so we are back to the price gouging on shipping, which at least has finally been admitted to (by saying it's necessary to be profitable).
It's very easy to trivialize a business model and say "it's broken". There's are many factors that go into running a business that's just not broken down into "x, y, z = profit." You're also assuming that 100% of our customers are Pro's who have the 15% cut. The majority of our print sales come from customers who do not sell photos for a profit. I can't go into the details of how SmugMug brings in and spends money but we try to keep subscription costs down by offsetting it with some profit on the prints. This cost is passed along to your customers, not to you. We don't want to raise your prices.
Back on the topic of prints: there's costs associated with interfacing with a lab. We had to build the interface. We have to maintain it. It's an automated system but very frequently requires Support Heroes to intervene ("I want to cancel order <x>", order issues, etc). There's also the Print Guarantee. For the Pro's, the 15% can go into some of this, but for the non-Pro's, SmugMug has its small margin that goes into covering these costs.
Bay Photo can offset things because their margins are higher than our margins. Just as a random example: a print costs Bay $0.10. They charge $0.19 to a normal customer and make 9 cents per print. They might sell it to us for $0.17, we charge $0.19, and we make 2 cents per print. Their 9 cents per print gives them room to offset the shipping and still make a profit. Our 2 cents per print profit does not let us subsidize the shipping.
This is as clear as I can possibly be: if we tried to dig into our margins in the same way that bay does, we'd lose money on every print. We'd go out of business or we'd have to alter something, like increase subscription prices.
We're not going to get into business model debates here. Our goal is to survive as a business and keep your costs as low as possible. We've been around for 13 years and we plan to stay around, which means we're doing something right. We cut costs where we can, we constantly work out better deals when we can, but we can't survive if we start lowering costs just because you guys say it's so easy to run a business.
Shief and I have explained as much as we can ... probably more than we should, so this is most likely the last I'll speak on how the prices get determined. I want to re-iterate again, that our goal is the same as your goal: to keep prices as low as possible, and to keep shipping as low as possible. We BOTH want that (not just you). We're doing all that we can so we're not another photo business that bites the dust.
and I have explained as much as we can ... probably more than we should, so this is most likely the last I'll speak on how the prices get determined. I want to re-iterate again, that our goal is the same as your goal: to keep prices as low as possible, and to keep shipping as low as possible. We BOTH want that (not just you). We're doing all that we can so we're not another photo business that bites the dust.
Yes, you have effectively convinced me that SmugMug may not be the provider that works best for me at this point.
Your model, my model, it doesn't matter. What matters is I feel very slighted by these charges and will probably be moving my account somewhere else.
I have endured a rate hike that was justified for the price of doing business on your end; I lost a lot of features at that. I understood that and accepted it to be what it was. I don't have to accept that shipping is another way to help you make money especially since you have zero hands on ANY products that go through the site.
Simple: they have margin from the cost of the print (1a) that they can eat into, to subsidize the cost of shipping. Yes, they're subsidizing their shipping cost. They have higher margins that enable them to do this.
I want to re-iterate again, that our goal is the same as your goal: to keep prices as low as possible, and to keep shipping as low as possible. We BOTH want that (not just you). We're doing all that we can so we're not another photo business that bites the dust.
You see, this is why people think you are not telling the truth.
You are running a business, and so are most of us. It's a zero sum game, and let's not pretend it is not. The money you are overcharging for shipping is your profit and our loss. There is nothing wrong with it, but please give us a break and don't try to prove it's justified.
There is a thread in this forum where someone is asking why do you charge $80 for a digital download and the answer is "You get what you get and you don't get upset. If you don't like it - find another service." It's a clean honest answer and there are no more follow up questions. However when you are trying to make us believe that Bay is giving you worse rate then to a random person, everyone feels that they are being fooled.
In this particular case people are saying that not only it hurts us and our customers, but also it's not in Smugmug's interests. I tell my customers not to order via smugmug, but sent me the list of they need I will order from Bay. It's pain for me, not great for them and loss of sale for you.
Can I add in something else that we all should agree on? Do we all agree that SmugMug is also a business that needs to be profitable in order to continue to survive as your beautiful, personalized home for your photos?
We also need everyone to please understand that WE need to have a business that is profitable in order to survive and continue as your customers.
If we didn't care, we wouldn't bother trying to discuss the problem (and it is a problem). I've been with SmugMug for many years, through some rough times and have seen my costs with you increase dramatically. I realized a few years ago that I've been selling all of my prints directly, and financially it just doesn't make sense for me to keep a Pro level account with SmugMug. Honestly the only reason I've kept the Pro level is for the branding (and a bit of laziness on my part).
I'm sorry guys, but when my cost difference for ONE print (an art print, not a $0.19 4x5) exceeds $100, factoring in what you charge for shipping and the 15% I would give you for handling the transaction, it doesn't make any financial sense for me to have the order go through you. If you put yourself in the shoes of a photographer who has to make a living from their photography, unless you are doing high volume top dollar weddings or portraits, we'd be crazy to pay that much more than we would if we order directly through Bay. The 15% commission we pay you is already double the industry standard for Print on Demand.
I just read where you said, "The majority of our print sales come from customers who do not sell photos for a profit." and I've felt that's been part of the problem for a few years now. I wonder if that also means that the majority of your profits come from your customers who don't sell prints. Truthfully I'm not really worried if Jenny Homemaker has to pay $6.00 instead $1.50 to have a couple 4x5s shipped, I am worried about paying $78 plus 15% commission instead of $12.00 through Bay to have one print shipped. Your statement sounds like you are more concerned about the hobbyists, and that this isn't the right place for pros.
You're also assuming that 100% of our customers are Pro's who have the 15% cut. The majority of our print sales come from customers who do not sell photos for a profit.<x>
I am assuming no such thing. This is the SM PRO support forum. There's a reason this thread is not in general support, or suggestions. The non-profit charging power users, or whatever else, should absolutely not be on the same model. That would make NO sense, because you don't make any money from them any other way.
IMO, we pay a significant premium on our yearly rate to enable the selling-for-profit. SM gets a sizeable share of our profits from that. Asking your paying Pro members to subsidize lower end/non-business users is not fair. We pay for Business, they don't. Charge them.
</x>
I have carefully read through this entire thread. I started being very supportive, but facts are facts.
Some one asked or stated that you are lying. Well, to be blunt it's really hard to believe your actually dumb enough to not know you have been disingenuous (kindest word I could think of).
Now here is the scary part, FRAUD!
a:deceit, trickery; specifically: intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b: an act of deceiving or misrepresenting :trick
In law, fraud is deliberatedeception to secure unfair or unlawful gain. Fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities). The purpose of fraud may be monetary gain or other benefits.
Should some hungry shyster type take notice and see $$ in their dreams you will pay the penalty.
Oh sure you can hire your shyster type and hope he or she is a better shyster type that the other shyster type but very costly no matter the outcome.
I predict this thread will not only be shut down but deleted.
I am both angry and sad. Sad to think the people (SmugMug owners and family) I had such faith in would resort to this deception for money.
I have carefully read through this entire thread. I started being very supportive, but facts are facts.
Some one asked or stated that you are lying. Well, to be blunt it's really hard to believe your actually dumb enough to not know you have been disingenuous (kindest word I could think of).
Now here is the scary part, FRAUD!
a:deceit, trickery; specifically: intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right b: an act of deceiving or misrepresenting :trick
In law, fraud is deliberatedeception to secure unfair or unlawful gain. Fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities). The purpose of fraud may be monetary gain or other benefits.
Should some hungry shyster type take notice and see $$ in their dreams you will pay the penalty.
Oh sure you can hire your shyster type and hope he or she is a better shyster type that the other shyster type but very costly no matter the outcome.
I predict this thread will not only be shut down but deleted.
I am both angry and sad. Sad to think the people (SmugMug owners and family) I had such faith in would resort to this deception for money.
Sam cry:cry
I am glad someone else was willing to be more blunt than I've been. You are probably right that this thread will be deleted. Luckily, I have it archived and so do plenty of search engines and archive services. Hopefully SM will continue to discuss and address this with us. If not, taking it to social media is easy enough.
I wonder what exactly SM thinks someone paying for Portfolio/Business is paying all that extra for? It's already been stated here that selling prints can be done far cheaper, and nearly as easily, on our own So is it for a backup? Nope, you can get a TB cloud drive, that syncs across an unlimited number of devices, for about $60 a year (and handles all file types, RAW included). Web hosting? Nope, that can be done far cheaper, with far more customization, with minimal effort and no HTML ability.
Time to Downgrade Smug Mug
Time to downgrade my account and stop selling through Smug Mug. Very enlightening thread. Wow. I'm sure others will be following suit.
Have anyone noticed this thread was locked for a few hours?
Imagine that, they swear they never delete a thread on this board.. I wonder if that still happens.. They don't like fixing bugs either.. This thread is brutally honest and they have wiffed at every chance to prove they care about those actually selling.. I have heard all the excuses for years for every upgrade and enhancement.. It is never for the customer, it is always for them..
.. or we'd have to alter something, like increase subscription prices.
On reading some people's complaints it seems to me that some of them at least would perhaps rather have that scenario than the huge postage costs because it's the huge postage costs that put the customers off. If they get free or low postage they think they are getting a bargain even if they are paying more for their photos
Smugmug uses no common sense, They Markup the Shipping but because they mark it up so high no one wants to order Photos or keepsakes and so on! If they lowered the shipping they would stand to make more profit on the amount of orders that would go through! all the people that have been to my sight say the won't pay that much in shipping especially in this day and age when so many online companies are offering free shipping on a lot of goods. So come on Smugmug, let us make money so you can make money!!!
I have to completely agree with you. By far the most common complaint I receive from would be buyers is that shipping costs are so high it's putting them off purchasing. This is why so many of my orders I now process through BayROES, thus completely bypassing Smugmug. It's a real shame, I mean at the end of the day we do pay Smugmug a yearly fee for a service, which is for web hosting/backend and that's all fine. They then make extra money by taking the 15% from our sales, again fine...they're a business too.
The shipping cost situation I just can't understand. One thing I can say is that I primarily sell larger prints, namely MetalPrints, and these DO cost a S%^tload to ship via courier, and I find here the variation in shipping amounts between Smugmug and BayROES is quite minimal. It's just the shipping on smaller paper prints where the variation is more extreme.
@jeffkilroy said:
Smugmug uses no common sense, They Markup the Shipping but because they mark it up so high no one wants to order Photos or keepsakes and so on! If they lowered the shipping they would stand to make more profit on the amount of orders that would go through! all the people that have been to my sight say the won't pay that much in shipping especially in this day and age when so many online companies are offering free shipping on a lot of goods. So come on Smugmug, let us make money so you can make money!!!
@AdamNP said:
Just had a single 4x6 purchased, and the customer was charged $4.99 for basic shipping via USPS. I would love to know how that is even possible, for what I'm sure amounts to an envelope.
$4.99 shipping on small prints like this is absolutely ridiculous!
@JillLang said:
What's the latest on shipping costs??! They need to come down and come down significantly. I'M TIRED OF MY CUSTOMERS GETTING SCREWED!
We're constantly working with our print labs to try to lower the shipping costs. We have a few things we're going to try with EZPrints to lower those costs.
One option that I've personally found fairly successful from some limited testing is to have a shipping coupon displayed on my site. I eat the cost but it does motivate customers to purchase the photo, and they feel like they're getting a deal by having the coupon, so it's a win-win for everyone.
@leftquark said:
We're constantly working with our print labs to try to lower the shipping costs. We have a few things we're going to try with EZPrints to lower those costs.
When I "buy" one of my own photos I always compare the prices from my smug site (logged in as owner) and directly on BayPhoto.
I just purchased a metal print. The price for the print was slightly higher directly from BayPhoto, but the shipping price from smug made it a non-starter.
Metal print purchased from my smug site was $4 cheaper than purchasing direct from Bay.
2-day shipping via BayPhoto was $8.
2-day shipping via my smug site was $20.99.
I bought the print from BayPhoto.
As a site owner I have that option. But our customers do not.
@leftquark said:
We're constantly working with our print labs to try to lower the shipping costs. We have a few things we're going to try with EZPrints to lower those costs.
When I "buy" one of my own photos I always compare the prices from my smug site (logged in as owner) and directly on BayPhoto.
I just purchased a metal print. The price for the print was slightly higher directly from BayPhoto, but the shipping price from smug made it a non-starter.
Metal print purchased from my smug site was $4 cheaper than purchasing direct from Bay.
2-day shipping via BayPhoto was $8.
2-day shipping via my smug site was $20.99.
I bought the print from BayPhoto.
As a site owner I have that option. But our customers do not.
The difference between $8 and $21 is UNACCEPTABLE!
ARE WE BEING IGNORED??!!
Smugmug is SCREWING our customers! and they don't care.
@JillLang said:
What's the latest on shipping costs??! They need to come down and come down significantly. I'M TIRED OF MY CUSTOMERS GETTING SCREWED!
We're constantly working with our print labs to try to lower the shipping costs. We have a few things we're going to try with EZPrints to lower those costs.
One option that I've personally found fairly successful from some limited testing is to have a shipping coupon displayed on my site. I eat the cost but it does motivate customers to purchase the photo, and they feel like they're getting a deal by having the coupon, so it's a win-win for everyone.
What a minute! You suggest I create a shipping coupon and let ME eat the cost on my already low prices??!! That sounds like a lose lose situation to me.
It's a difficult position for us (SmugMug) to be in, just as it's a difficult position for a small online retailer to compete with a behemoth like Amazon that can offer free shipping for various reasons. And I recognize that it's difficult for you, since you want shipping prices as low as possible for your clients.
SmugMug doesn't make a profit on shipping. But we also cannot afford to lose a lot of money on it. So we do our best to try and break even on the shipping prices.
I don't have any personal insight into Bay's margins, but I suspect that they may be losing money in many cases on shipping because their margin on the prints may more than make up for it. That's simply not a path that SmugMug can follow very far as the math isn't in our favor.
Denise, if you give me a size for that MetalPrint and a general shipping destination, I can look to see if the shipping model needs to be adjusted. Remember that there are also different mounting/framing options, surfaces, and corner treatments. SmugMug prices MetalPrints with a Float Mount or Metal Float Hanger included, which increases both the cost of the print as well as the package size and weight, which of course increases the shipping costs. Above 30x40, they require an inset frame and often an actual crate for shipping.
@Sheaf said:
Denise, if you give me a size for that MetalPrint and a general shipping destination, I can look to see if the shipping model needs to be adjusted. Remember that there are also different mounting/framing options, surfaces, and corner treatments. SmugMug prices MetalPrints with a Float Mount or Metal Float Hanger included, which increases both the cost of the print as well as the package size and weight, which of course increases the shipping costs. Above 30x40, they require an inset frame and often an actual crate for shipping.
Sheaf -
It was small, an 8x12 MetalPrint, shipping to Massachusetts.
With the same mounting/framing options (I ordered it with a float mount), same surface, and same corner treatments, the smug price for the print was $4 cheaper but the shipping was more.
Because I wanted 2-day shipping I opted to buy direct from Bay instead of ordering from my smug site.
I suspect you're right about Bay potentially losing money on shipping - but the difference is very noticeable.
I totally agree that the difference is noticeable and you made the right choice to order directly from Bay. I'll see if I can find a similar order placed in our system and match it up with a FedEx invoice. But I guarantee you it's going to be far, far more than $8 to fly an 8x12 Float Mounted MetalPrint across the country for a 2-day delivery. I suspect, actually, that SmugMug is also undercharging for that. If that's the case, then Bay likely lost money on that order even with their larger print margin and makes it up on other orders.
@Sheaf said:
I totally agree that the difference is noticeable and you made the right choice to order directly from Bay. I'll see if I can find a similar order placed in our system and match it up with a FedEx invoice. But I guarantee you it's going to be far, far more than $8 to fly an 8x12 Float Mounted MetalPrint across the country for a 2-day delivery. I suspect, actually, that SmugMug is also undercharging for that. If that's the case, then Bay likely lost money on that order even with their larger print margin and makes it up on other orders.
Bear in mind the big guys also get huge discounts based on shipping. I worked for a company that was in the top UPS shippers and had something like a 78% discount for ground shipments (I don't recall the others). They become a profit point -- they can give you a discount off shipping compared to retail UPS rates, but still make quite a bit of money on shipments. So you can't compare one company's invoice to another -- the discount amounts vary incredibly. Fedex is the same though I don't recall our fedex discount. Also, shippers tend to self insure, which saves them money as well (especially easy if you are a manufacturer where the "loss" is much smaller to you than the buyer).
@Sheaf said:
...But I guarantee you it's going to be far, far more than $8 to fly an 8x12 Float Mounted MetalPrint across the country for a 2-day delivery. I suspect, actually, that SmugMug is also undercharging for that. If that's the case, then Bay likely lost money on that order even with their larger print margin and makes it up on other orders.
I think you're probably right about that.
What probably makes it even harder (for you / smug) is that we have become accustomed to free shipping. Or almost free in the case of Amazon Prime - the annual fee is noticeable but not so much when pretty much everything ships free with 2-day delivery.
For a comparison... I just shipped a camera to Fuji factory service in NJ using UPS. The shipping fee from MA to NJ was $24 - but $13 of that was for insurance. Essentially the shipping cost was $11 for ground service (chosen because ground from MA to NJ takes only 1 day). I would guess that shipping that same package from MA to CA would be close to or over the cost of shipping that MetalPrint.
Comments
Again I don't hate you and I don't think your deliberately not telling the truth, but I can absolutely state one of us doesn't get it.
Let's take a look at this..................
1) An order is placed. The cost of the print + shipping is paid and collected by SmugMug.
1a) We collect: cost of the print
1b) We collect: cost of shipping
1c) We collect: any additional Pro profit
No argument with the above.
2) Bay Photo charges us for the cost of the print (note: they do NOT charge us for shipping).
Here is an issue. Bay charges you the same price as it charges it's other non SmugMug customers for the print. Receiving the same profit margin as received from non SmugMug purchasers, but doesn't ship the product through their Fed X account, keeping the extra / additional profit by having SmugMug pay for the shipping. IE: charging SmugMug more then their other customers.
3) We pay Bay for the print, based on what was collected from the customer (1a).
Fine.
4) Bay Photo turns the order over to FedEx.
OK
5) FedEx sends us the bill
Why? They ship and pay for shipping to their other clients. Why not SmugMug?
6) We pay the FedEx bill, based on the shipping collected from the customer (1b).
Why would you enter into an agreement that has you paying more than the vendors other customers????
7) We send the Pro Profit (1c) to the Photographer, minus the 15% fee.
Fair.
If something is still unclear from this, please let me know but I hope this clears it up.
Sam
Sorry, but nothing is clear. Why on EARTH does SM go through all of those steps? SM should be able to transmit an order to Bay no different than anyone else. Shipping should be $1.50 for any order of $12 or more. I quoted the whole list above because that process is absolute insanity. Why isn't it something like this:
1) An order is placed on an SM site.
2) SM collects the money (print cost + markup + $1.50 shipping), and transmits the order to Bay.
3) Bay bills SM (what any other customer would be billed, print cost + $1.50) and ships the order.
4) SM takes 15% of what they collected, and forwards 85% to the photographer. [edit] (Obviously I am referring to the net left over here, not the total amount collected)
Any other steps are completely unnecessary, and apparently VERY expensive. No one here is talking about someone ordering a 0.19 print and expecting free shipping. We are talking about larger orders (certainly $12+) being charged some imaginary shipping that Bay themselves does not charge.
If that's not clear, please ask. I don't how much more basic it can be.
Former SmugMug Product Team
aaron AT aaronmphotography DOT com
Website: http://www.aaronmphotography.com
My SmugMug CSS Customizations website: http://www.aaronmphotography.com/Customizations
Of course we agree on that.
However... you already take a 15% cut and charge $150-$300 a year. If that is not enough, then the business model is broken.
Inflating shipping charges to hide taking more profit is not an acceptable way to do things. You still haven't answered why I have better terms with Bay than SM does. Of course, we all know SM does, so we are back to the price gouging on shipping, which at least has finally been admitted to (by saying it's necessary to be profitable).
It's very easy to trivialize a business model and say "it's broken". There's are many factors that go into running a business that's just not broken down into "x, y, z = profit." You're also assuming that 100% of our customers are Pro's who have the 15% cut. The majority of our print sales come from customers who do not sell photos for a profit. I can't go into the details of how SmugMug brings in and spends money but we try to keep subscription costs down by offsetting it with some profit on the prints. This cost is passed along to your customers, not to you. We don't want to raise your prices.
Back on the topic of prints: there's costs associated with interfacing with a lab. We had to build the interface. We have to maintain it. It's an automated system but very frequently requires Support Heroes to intervene ("I want to cancel order <x>", order issues, etc). There's also the Print Guarantee. For the Pro's, the 15% can go into some of this, but for the non-Pro's, SmugMug has its small margin that goes into covering these costs.
Bay Photo can offset things because their margins are higher than our margins. Just as a random example: a print costs Bay $0.10. They charge $0.19 to a normal customer and make 9 cents per print. They might sell it to us for $0.17, we charge $0.19, and we make 2 cents per print. Their 9 cents per print gives them room to offset the shipping and still make a profit. Our 2 cents per print profit does not let us subsidize the shipping.
This is as clear as I can possibly be: if we tried to dig into our margins in the same way that bay does, we'd lose money on every print. We'd go out of business or we'd have to alter something, like increase subscription prices.
We're not going to get into business model debates here. Our goal is to survive as a business and keep your costs as low as possible. We've been around for 13 years and we plan to stay around, which means we're doing something right. We cut costs where we can, we constantly work out better deals when we can, but we can't survive if we start lowering costs just because you guys say it's so easy to run a business.
Shief and I have explained as much as we can ... probably more than we should, so this is most likely the last I'll speak on how the prices get determined. I want to re-iterate again, that our goal is the same as your goal: to keep prices as low as possible, and to keep shipping as low as possible. We BOTH want that (not just you). We're doing all that we can so we're not another photo business that bites the dust.
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Yes, you have effectively convinced me that SmugMug may not be the provider that works best for me at this point.
Your model, my model, it doesn't matter. What matters is I feel very slighted by these charges and will probably be moving my account somewhere else.
I have endured a rate hike that was justified for the price of doing business on your end; I lost a lot of features at that. I understood that and accepted it to be what it was. I don't have to accept that shipping is another way to help you make money especially since you have zero hands on ANY products that go through the site.
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You are running a business, and so are most of us. It's a zero sum game, and let's not pretend it is not. The money you are overcharging for shipping is your profit and our loss. There is nothing wrong with it, but please give us a break and don't try to prove it's justified.
There is a thread in this forum where someone is asking why do you charge $80 for a digital download and the answer is "You get what you get and you don't get upset. If you don't like it - find another service." It's a clean honest answer and there are no more follow up questions. However when you are trying to make us believe that Bay is giving you worse rate then to a random person, everyone feels that they are being fooled.
In this particular case people are saying that not only it hurts us and our customers, but also it's not in Smugmug's interests. I tell my customers not to order via smugmug, but sent me the list of they need I will order from Bay. It's pain for me, not great for them and loss of sale for you.
We also need everyone to please understand that WE need to have a business that is profitable in order to survive and continue as your customers.
If we didn't care, we wouldn't bother trying to discuss the problem (and it is a problem). I've been with SmugMug for many years, through some rough times and have seen my costs with you increase dramatically. I realized a few years ago that I've been selling all of my prints directly, and financially it just doesn't make sense for me to keep a Pro level account with SmugMug. Honestly the only reason I've kept the Pro level is for the branding (and a bit of laziness on my part).
I'm sorry guys, but when my cost difference for ONE print (an art print, not a $0.19 4x5) exceeds $100, factoring in what you charge for shipping and the 15% I would give you for handling the transaction, it doesn't make any financial sense for me to have the order go through you. If you put yourself in the shoes of a photographer who has to make a living from their photography, unless you are doing high volume top dollar weddings or portraits, we'd be crazy to pay that much more than we would if we order directly through Bay. The 15% commission we pay you is already double the industry standard for Print on Demand.
I just read where you said, "The majority of our print sales come from customers who do not sell photos for a profit." and I've felt that's been part of the problem for a few years now. I wonder if that also means that the majority of your profits come from your customers who don't sell prints. Truthfully I'm not really worried if Jenny Homemaker has to pay $6.00 instead $1.50 to have a couple 4x5s shipped, I am worried about paying $78 plus 15% commission instead of $12.00 through Bay to have one print shipped. Your statement sounds like you are more concerned about the hobbyists, and that this isn't the right place for pros.
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I am assuming no such thing. This is the SM PRO support forum. There's a reason this thread is not in general support, or suggestions. The non-profit charging power users, or whatever else, should absolutely not be on the same model. That would make NO sense, because you don't make any money from them any other way.
IMO, we pay a significant premium on our yearly rate to enable the selling-for-profit. SM gets a sizeable share of our profits from that. Asking your paying Pro members to subsidize lower end/non-business users is not fair. We pay for Business, they don't. Charge them.
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I have carefully read through this entire thread. I started being very supportive, but facts are facts.
Some one asked or stated that you are lying. Well, to be blunt it's really hard to believe your actually dumb enough to not know you have been disingenuous (kindest word I could think of).
Now here is the scary part, FRAUD!
a : deceit, trickery; specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right
b : an act of deceiving or misrepresenting : trick
In law, fraud is deliberate deception to secure unfair or unlawful gain. Fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities). The purpose of fraud may be monetary gain or other benefits.
Should some hungry shyster type take notice and see $$ in their dreams you will pay the penalty.
Oh sure you can hire your shyster type and hope he or she is a better shyster type that the other shyster type but very costly no matter the outcome.
I predict this thread will not only be shut down but deleted.
I am both angry and sad. Sad to think the people (SmugMug owners and family) I had such faith in would resort to this deception for money.
Sam
I am glad someone else was willing to be more blunt than I've been. You are probably right that this thread will be deleted. Luckily, I have it archived and so do plenty of search engines and archive services. Hopefully SM will continue to discuss and address this with us. If not, taking it to social media is easy enough.
I wonder what exactly SM thinks someone paying for Portfolio/Business is paying all that extra for? It's already been stated here that selling prints can be done far cheaper, and nearly as easily, on our own So is it for a backup? Nope, you can get a TB cloud drive, that syncs across an unlimited number of devices, for about $60 a year (and handles all file types, RAW included). Web hosting? Nope, that can be done far cheaper, with far more customization, with minimal effort and no HTML ability.
Time to downgrade my account and stop selling through Smug Mug. Very enlightening thread. Wow. I'm sure others will be following suit.
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Imagine that, they swear they never delete a thread on this board.. I wonder if that still happens.. They don't like fixing bugs either.. This thread is brutally honest and they have wiffed at every chance to prove they care about those actually selling.. I have heard all the excuses for years for every upgrade and enhancement.. It is never for the customer, it is always for them..
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On reading some people's complaints it seems to me that some of them at least would perhaps rather have that scenario than the huge postage costs because it's the huge postage costs that put the customers off. If they get free or low postage they think they are getting a bargain even if they are paying more for their photos
I have to completely agree with you. By far the most common complaint I receive from would be buyers is that shipping costs are so high it's putting them off purchasing. This is why so many of my orders I now process through BayROES, thus completely bypassing Smugmug. It's a real shame, I mean at the end of the day we do pay Smugmug a yearly fee for a service, which is for web hosting/backend and that's all fine. They then make extra money by taking the 15% from our sales, again fine...they're a business too.
The shipping cost situation I just can't understand. One thing I can say is that I primarily sell larger prints, namely MetalPrints, and these DO cost a S%^tload to ship via courier, and I find here the variation in shipping amounts between Smugmug and BayROES is quite minimal. It's just the shipping on smaller paper prints where the variation is more extreme.
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$4.99 shipping on small prints like this is absolutely ridiculous!
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What's the latest on shipping costs??! They need to come down and come down significantly. I'M TIRED OF MY CUSTOMERS GETTING SCREWED!
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We're constantly working with our print labs to try to lower the shipping costs. We have a few things we're going to try with EZPrints to lower those costs.
One option that I've personally found fairly successful from some limited testing is to have a shipping coupon displayed on my site. I eat the cost but it does motivate customers to purchase the photo, and they feel like they're getting a deal by having the coupon, so it's a win-win for everyone.
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Website: http://www.aaronmphotography.com
My SmugMug CSS Customizations website: http://www.aaronmphotography.com/Customizations
When I "buy" one of my own photos I always compare the prices from my smug site (logged in as owner) and directly on BayPhoto.
I just purchased a metal print. The price for the print was slightly higher directly from BayPhoto, but the shipping price from smug made it a non-starter.
Metal print purchased from my smug site was $4 cheaper than purchasing direct from Bay.
2-day shipping via BayPhoto was $8.
2-day shipping via my smug site was $20.99.
I bought the print from BayPhoto.
As a site owner I have that option. But our customers do not.
Musings & ramblings at https://denisegoldberg.blogspot.com
The difference between $8 and $21 is UNACCEPTABLE!
ARE WE BEING IGNORED??!!
Smugmug is SCREWING our customers! and they don't care.
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What a minute! You suggest I create a shipping coupon and let ME eat the cost on my already low prices??!! That sounds like a lose lose situation to me.
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It's a difficult position for us (SmugMug) to be in, just as it's a difficult position for a small online retailer to compete with a behemoth like Amazon that can offer free shipping for various reasons. And I recognize that it's difficult for you, since you want shipping prices as low as possible for your clients.
SmugMug doesn't make a profit on shipping. But we also cannot afford to lose a lot of money on it. So we do our best to try and break even on the shipping prices.
I don't have any personal insight into Bay's margins, but I suspect that they may be losing money in many cases on shipping because their margin on the prints may more than make up for it. That's simply not a path that SmugMug can follow very far as the math isn't in our favor.
Denise, if you give me a size for that MetalPrint and a general shipping destination, I can look to see if the shipping model needs to be adjusted. Remember that there are also different mounting/framing options, surfaces, and corner treatments. SmugMug prices MetalPrints with a Float Mount or Metal Float Hanger included, which increases both the cost of the print as well as the package size and weight, which of course increases the shipping costs. Above 30x40, they require an inset frame and often an actual crate for shipping.
Sheaf -
It was small, an 8x12 MetalPrint, shipping to Massachusetts.
With the same mounting/framing options (I ordered it with a float mount), same surface, and same corner treatments, the smug price for the print was $4 cheaper but the shipping was more.
Because I wanted 2-day shipping I opted to buy direct from Bay instead of ordering from my smug site.
I suspect you're right about Bay potentially losing money on shipping - but the difference is very noticeable.
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I totally agree that the difference is noticeable and you made the right choice to order directly from Bay. I'll see if I can find a similar order placed in our system and match it up with a FedEx invoice. But I guarantee you it's going to be far, far more than $8 to fly an 8x12 Float Mounted MetalPrint across the country for a 2-day delivery. I suspect, actually, that SmugMug is also undercharging for that. If that's the case, then Bay likely lost money on that order even with their larger print margin and makes it up on other orders.
Bear in mind the big guys also get huge discounts based on shipping. I worked for a company that was in the top UPS shippers and had something like a 78% discount for ground shipments (I don't recall the others). They become a profit point -- they can give you a discount off shipping compared to retail UPS rates, but still make quite a bit of money on shipments. So you can't compare one company's invoice to another -- the discount amounts vary incredibly. Fedex is the same though I don't recall our fedex discount. Also, shippers tend to self insure, which saves them money as well (especially easy if you are a manufacturer where the "loss" is much smaller to you than the buyer).
I think you're probably right about that.
What probably makes it even harder (for you / smug) is that we have become accustomed to free shipping. Or almost free in the case of Amazon Prime - the annual fee is noticeable but not so much when pretty much everything ships free with 2-day delivery.
For a comparison... I just shipped a camera to Fuji factory service in NJ using UPS. The shipping fee from MA to NJ was $24 - but $13 of that was for insurance. Essentially the shipping cost was $11 for ground service (chosen because ground from MA to NJ takes only 1 day). I would guess that shipping that same package from MA to CA would be close to or over the cost of shipping that MetalPrint.
Musings & ramblings at https://denisegoldberg.blogspot.com