I published this post on Aug 6 but never shared it. Below is an exact copy/paste of the blog post. What I failed to mention in the post is that this explains (I think) why there is an Excessive Royalty Fee. When you look at the numbers below you'll see it helps them claw-back a little of what they're losing as total share of the sale at higher royalty.
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I like to dig into the math behind our earnings on Zazzle because to me it's a puzzle-solving activity that's oddly enjoyable, and sometimes it reveals interesting/important things as it did with the User Options situation for example. For Designers who are in this as a business and dependent on their Zazzle earnings income, it is vital to understand how the math works so you can set an appropriate Royalty that works for you after it all shakes out and you are looking at your Net earnings.
There are five different ways earnings on a sale of your own products can be calculated:
1) None = there was no referrer, so no one is earning a referral on it, not even Zazzle
2) Cross-Promo = you used an RF# link so earned 15% as Referrer in addition to your Royalty
3) Self-Promo = you used a "clean" link so earned a total of 35-50% of the order total
4) 3rd Party - Other = the sale was Referred but you were not the Referrer
5) 3rd Party - Zazzle = the sale was Referred but you were not the Referrer
For #4 and #5, your earnings are exactly the same. In both cases the Marketing Royalty Fee for a referred sale is applied but since you weren't the Referrer, you're not earning any of it back. For Zazzle though it does make a difference as if it's Other, they have to pay out a Referral commission to someone else. Zazzle doesn't make any distinction between themself and Other on any of our earnings reports and that is a very sore point that needs to change. So while technically there are only four sale types (None, Cross, Self, or 3rd), distinguishing between Zazzle as 3rd or Other as 3rd is important when looking at the big picture.
So let's look at that "big picture" ...
There is a "base price" for every product which includes the minimum 5% Royalty a Designer can set. For example, if you look at the CYO blank for a 16x16 throw pillow, the list price is $33.45. If you add a design and publish and set 5% as your Royalty, it's still $33.45. I have never tried to figure out the formula Zazzle uses to determine the product price after you set your royalty % but always assumed it was, uhm, "linear". (I don't know the proper math term for this.) I just figured that whatever percent of the total sale Zazzle was making, it would stay the same as the royalty (and thus cost to end customer) increased. But I've just recently discovered this is not the case.
As you increase your Royalty, Zazzle's % share of the total sale amount decreases. This is mind-boggling to me. But the math doesn't lie. I've looked at this under various circumstances and can see that an increase in Royalty can lead to a significant increase in earnings to you as the Designer while costing only slightly more to the customer and decreasing the % Zazzle makes on the sale.
Now I'm going to move on to some actual examples of real-world numbers. Since wedding invites are the bread & butter of many successful designers, I looked at that first. I went to Zazzle's Best Sellers page, sorted to All-Time, and then picked the first wedding invite to show up, which happened to be a flat 5x7 at 10% royalty. 10% is also the number many set to "stay competitive" so I used 10% royalty in my comparison to a higher one.
The following screenshot shows a flat 5x7 invite at the current 20% off discount, set to 10% royalty vs 23.8% royalty, with the Marketing Royalty Fee in both cases being the 50% bracket as applied to wedding stationery, and they ordered 50 invites. (Full image Here.)
At 10% Royalty, the total the customer pays is $100.
At 23.8% Royalty, the total the customer pays is $118. (Only $0.36 more per invite to customer)
The percents I've shown under the sale types are the percent of total order cost the customer paid to Zazzle ($100 vs $118).
Here it is in pie chart form where we can visualize it better: (Full image Here)
Look at the None sale here, it's the most striking difference. Upping your Royalty to 23.8% earns you $16.68 more (a 166.8% increase in profits!) while Zazzle only earns $1.32 more (a measly 1.47% increase) and their percent of the total sale has decreased from 90% to 77.4% whereas yours has increased from 10% to 22.6%!
If you look at all five sale types your earnings increase significantly across the board even with a 3rd Party sale where they still more than double. Your percent share of the total sale also increases across the board, except for the Self-Promo sale where it dips slightly due to the Excess Royalty Fee applied. But even with that fee you're still earning $7.60/15.2% MORE. And this increase to Royalty that significantly increases your earnings as well as shifting the % split between you and Zazzle in your favor, it only costs the customer $0.36 per invite which is peanuts in the wedding market where people who want what they want aren't going to blink at that $18 dollars in their overall wedding budget.
Now lets look at another product example where the customer is only going to be ordering one instead of in bulk. Here I've used an over-sized greeting card (18x24) I have set to 22% royalty.
(Full image Here)
I am not providing pie charts here for visuals but you can see the same math happens as with the bulk invite sale; with the increase in Royalty %, your earnings and total percent of sale significantly increase over Zazzle's. In this case, Designer earnings on a None sale increase by $3.82 while Zazzle's only increase by $0.34. And while your share of the total sale more than doubles from 10% to 21%, Zazzle's decreases from 90% to 79%. And again, you can see this play out on all five sales types, except the Self-Promo type where our total share decreases a bit due to the Excess Royalty Fee even though our total earnings in dollars increase.
This over-sized card example is for a one-off occasion where, IMO, a few cents or even a few dollars, isn't going to stop the customer from making the order. This card has sold for me multiple times at 22%, and the smaller version (8.5x11) has sold multiple times at 32.5% royalty.
This is not a humble-brag. I am just trying to stress the point that a Royalty over the "suggested" 10% can make a significant difference to your earnings while having minimal impact on the customer. And it also, quite surprisingly to me, shifts the % of total sale earned.
When the Ambassador Program was first announced, Zazzle used a 10% Royalty in many of their example calculations. And if you look at this page, they suggest just 5-10% as royalty which is pathetically low. I had always assumed that higher royalties would benefit both Designer and Zazzle so why wouldn't they want people to increase it? But I can see now that that is not true; the higher the royalty the more the total earnings shift in favor of the Designer instead of Zazzle. So it makes sense to me now why Zazzle recommends staying low - because despite the small increase in gross sales, it actually results in a smaller share for Zazzle where their revenue is not increasing at the same rate the Designer's is.
Zazzle mentions in the above linked article being "competitive" as a reason to stay at 5-10%, and this is a concern I've seen raised by many Designers. But what's "competitive" is determined by what's in the MP. If people collectively raise their rates, than that higher rate becomes the "competitive" rate ... It's all relative, one big circle, and the change starts with you.
August 6th, 2025
~ Col's Creations
