I'm turning a photography hobby into a business. Does it make financial sense for me to handle printing and order fulfillment myself, or sign up with a website like RedBubble?
—P.B., Pasadena, Calif.
The rise of such sites as RedBubble and CafePress has given many entrepreneurs a welcome means to monetize their creative output. These companies provide sales automation, order fulfillment, and the savings in time and money that accompany them. More importantly for many entrepreneurs, they also deliver a large, international online audience interested in buying art, photography, and original designs. In return, most charge either a flat fee or a percentage of sales. Some ask for a cut of up to 50 percent of revenues.
Easy as they make selling online, these sites are not necessarily a good fit for every business. Whether they will work for you depends on several factors. Here are some questions that will help you decide:
How much is your time worth? Depending on your sales volume, it could become time-consuming to take orders for your photos, put through online payments, make up prints, and ship them to your customers. If you're already employed full-time, you're likely to have to do this work at nights and on weekends. If you don't mind doing it yourself, or at least starting out that way, you'll make a better profit margin. If you decide to outsource, make sure you're charging enough to cover the online commission and still make reasonable revenue from your artistry.
Paying the Third-Party Instead of You
What is your ultimate goal for this business? If you plan to turn the photography business into a serious endeavor, you'll need to create a brand. In that case, using a third-party sales site will undercut your brand. Customers buying your photos will interact with the third party, pay it, and get delivery of their photos from that site—rather than from your company. "If your customer's package arrives from RedBubble, it looks like you're trying to cut corners," says Bob Phibbs, who consults with small businesses as The Retail Doctor. "It's a great deal for RedBubble, because they get to sell your work royalty-free, they get exposure to new clients and new e-mail addresses for their customer database." Meanwhile, you'll reap none of that harvest for your own brand.
Do you need market exposure? If you already have a following for your photography and a platform on which to sell it, you won't get the full benefit of the ready-made customer base that is a prime selling point of a third-party site. If you're a novice who really needs to get the word out about your work, the exposure of a third-party site may well be worth the cost.
Have you explored alternatives? With some ingenuity, you can automate the sales process on your own. "Work with a print shop or other supplier who keeps your photos on file. When you get an order, you send them an e-mail, they print up the pieces you need, send them to a drop shipper, and the [prints] get sent to your customer with your branded labels," says Dimitri Onistsuk, vice-president for marketing at Shopify. "You never touch the product after the process is automated." With this method, your margins will be higher and your costs will decrease as sales volume increases. That's because most vendors offer discounts on larger orders.
Remember also that this isn't an either-or decision. Many entrepreneurs do a little bit of everything to start and then narrow their efforts as it becomes clear what works best for them. Starting out with some of your prints on a third-party site can be a way to build a name for yourself that will draw traffic to your own company site, where you can also sell your product.
No matter which way you go, keep in mind that photography is a vanity purchase: a want, not a need. "Make sure you don't price it like a commodity or charge what someone would pay for a T-shirt. Otherwise, you'll end up still having a hobby, not a business," Phibbs says.