Creative Market Increases It’s Commission to 40% from 30% – Initial Thoughts & Reactions

Hi friends, today I’m here with another instalment of “Industry Chit Chat”.

Creative Market Increases It's Commission to 40% from 30% - Initial Thoughts & Reactions | What does this mean for Creative Market Sellers and Shop Owners? What does it mean for the future of Creative Market? Click to read more>>

It has just been announced to the Shop Owners over at Creative Market that they are increasing their take rate from 30% to 40%. Being a Shop Owner myself, I received this email as well, and went on to the Shop Owner Section of the Discussion Forum to see some initial reactions.

Of course, majority of the shop owners who commented there are upset.

As am I.

(That’s not to say that majority of the sellers are necessarily upset – they might not have chosen to comment. It’s very hard to be a contrarian voice in a crowd of voices echoing each other.)

I don’t want to be pessimistic and say this is the end of Creative Market, but I do think that this is a bad move – directly bad for Shop Owners, and indirectly bad for Creative Market (an effect which might only be felt after months – may be even a couple of years).

I’ll speak mostly from my own personal experience and perspective – because that’s what I have and can really comment on, ha!

I’m going to start with this:

Why did Creative Market become such a popular marketplace among designers who are there to BUY things?

Because of the super high quality of assets which are sold there. Because of innovative design products. Because you don’t even need to read design blogs if you are a regular shopper at Creative Market – you can tell what the latest design trends are just by looking at the cover images of the products there.

Now, this begs the question:

WHY did Creative Market only have such high quality products without any internal review process? 

The answer was quite simple – Designer-Sellers could earn a very decent living wage just by selling their well-designed, top-notch quality designs on Creative Market. They were paid fairly for it. The customers ruled. If they liked a product, it did well. If they didn’t like it, it tanked. Shop Owners knew that feedback from customers was the best possible feedback, and used that to inform their design decisions. Thus improving their creations with each iteration.

CM worked hard to promote their products to their community in a fair way. The Handpicked section was curated by people who understood design trends amongst the Creative Market audience. The weekly product newsletters showcased designs which often became bestsellers – again thanks to the great curation by the people at Creative Market who understood the people who buy at Creative Market.

All of the above applies to 2015 – mid 2018.

I joined Creative Market only in 2016. It was still a great place to be, and Creative Market quickly became my highest earner (out of all my shops). In fact, even with the highest take rate, Creative Market was still giving me the highest return, so I continued creating products FOR the Creative Market audience. Since I was getting most of my income from Creative Market, I continued spending most of my time thinking about Creative Market’s audience, and tailoring products for them.

However, things changed majorly in the second half of 2018 and the downward spiral has continued into 2019. It’s actually gotten way worse in 2019.

My income from CM is now the lowest out of all my shops.

As my income from Creative Market started declining (due to various reasons), I started getting less and less motivated to create FOR Creative Market. I now feel it’s a better use of my limited time and resources to spend that energy on my other outlets which bring me more income – which allows me to continue doing what I love and am good at. That’s the most obvious way for a person to think, right?

If something gives you a good return, follow that path. If something doesn’t give you a good return, try for a while to fix it, but if it doesn’t work, then direct that energy instead to the path that does give you a good return.

I don’t know what changed internally at Creative Market. I have read about there being a change in management, about a divestment in CM, and other news, including new hires at the top level.

I can only comment on the changes we’ve seen outside as sellers. Of course, it’s not the complete picture and I’m aware of that. I’m just qualifying my statements.

From mid-2018 onwards, we’ve seen a slew of changes which were not received well by the Sellers, and were eventually also rejected by the Buyers.

First there was Creative Market Pro.

Then the change in Licenses. I might do a different post on this, but honestly, the new Licenses have killed sales for many shops on Creative Market – buyers are now driven to buy the same products from the same sellers but from a different platform with a better license which understands BUYERS’ NEEDS.

Then the Certified Program (again, a separate post warranted for this), and now an increase of 10% in take rate which is actually a 30% raise for Creative Market’s revenue.

The reason why Creative Market had been so successful in the past is because of the excellent designers were MOTIVATED to create and sell top class products there. Those designers didn’t want to sell anywhere else because the return on their investment in Creative Market was worth it.

I don’t know if that’s still the case.

If the return on your investment (of time, energy, money on resources) is not enough, you are going to take that investment elsewhere.

I have noticed a trend of many popular designers creating their own websites in the past couple of years. Those who had been sitting on that big “Build My Own Website” Project for YEARS (because they didn’t have the motivation to direct their attention there – when their Creative Market shop was earning them excellent incomes) are now directing their attention EXACTLY there.

I have also started purchasing from designers’ own websites because I really want my fellow designers to get the maximum possible cut for their own hard work.

Coming back to how the 40% take rate might affect Creative Market in the long run.

Well do I need to explain any further?

I hope Creative Market acknowledges that the internet is not the same as it was back in 2012. Back when independent creators did not have a meaningful way to promote themselves. Social media was not really a big thing back then.

Today, it’s much easier (and may be more profitable too!) for independent graphic designers to build & market to their own social media audience, and sell on their own website. They are professional designers after all, and will not find it too difficult to build their own websites! In fact, I’ve seen so many amazing designers on Instagram who started as recently as 2018 / 2019, who already have their own massive customer base and sell directly through their own channel. No need for an intermediary.

The lure of Creative Market back in the pre-2018 days was the insane exposure to a curated community. And mostly, the SOLID return on investment.

I must pause here to add that:

Creative Market has promised Shop Owners increased advertising with the extra 30% bump in their revenues.

We have been told that Creative Market can now pursue paid channels of advertising which weren’t possible for them earlier. I HOPE that we see some returns from this channel!

If increased number of sales are able to compensate for the decline in the revenue share of Shop Owners to the extent that it actually leads to HIGHER incomes for Shop Owners – then I would be the happiest person. I really, really, REALLY want that to happen. And I genuinely do think that that is a very real possibility.

Paid advertising, when done correctly, can turn $1 into $10 very quickly. So I hope Creative Market gets those kinds of returns on their ad-dollars and we Shop Owners also get a piece of that pie!

I am all for the concept that 60% of a massive pie is better than 70% of a tiny pie.

I hope it works out this way!

Pin for later:

Creative Market Increases It's Commission to 40% from 30% - Initial Thoughts & Reactions | What does this mean for Creative Market Sellers and Shop Owners? What does it mean for the future of Creative Market? Click to read more>>

What do you think?