Wisdoma by Brian Kindsvater

The Daily Mail added a paywall today, joining other news sites such as CNN, Fox, NY Post, etc. creating barriers to reading the news and requiring cash payments or at least forking over your email so you can be spammed to death.

Supposedly touted as for just a few stories, it appears the majority of Daily Mail articles are now paywalled.

News sites started carpet bombing their web pages with so many ads it caused many to run to get ad blocker web browsers.

Then the sites started adding “news stories” which are really just affiliate articles pitching products for you to buy for which the news sites gets a commission.

For paying the Daily Mail do you get to avoid ads (without using an ad blocker)?

NO.

Unbelievably, they say for your payment to read articles you still get ads – but supposedly fewer ads.

What a deal!

Seems to me the news model is broken.

But it also appears from a quick search online that the Daily Mail’s chairman is compensated more than $10 million per year and other executives are paid $5 million and up.

Maybe that’s where some savings could be found.

Prediction: the paywalls will be a failure as few signup and it just causes a loss of eyeballs and traffic to the website.

I don’t know what the solution is for news sites, but I doubt paying a monthly fee to get the honor of seeing ads, with articles themselves just being disguised ads pitching products to buy, doesn’t seem like a enticing deal designed with the consumer in mind.

If you are getting emails that look like web pages with fancy graphics and formatting then you have html enabled and literally are receiving web pages as email. It also means you are receiving tracking graphics letting the sender (spammer) know you opened the email message and that your email address is valid.

It also means you may be downloading onto your computer viruses and spyware disguised as graphics.

It also makes it more difficult to determine if an email is fake or not. Many emails appear to be from trusted companies with a link for you to click on. The link appears valid – but only if you can hover over the link with your mouse to see where it is really going can you determine if the link is real or not.

For example, an email may appear to be from your bank, such as Chase, with a link that visually says it is to chase.com. But if you hover your mouse over the link to see its actual web address you will see it is actually going to some other website for the purpose of stealing your login credentials or downloading spyware onto your computer.

Using text based email makes it easier to see this criminal activity.

I recommend going for ugly text based email due to security issues with html email

Someone in a Print on Demand group I am a member of was bragging they have made 11,669 sales on Etsy over the last two years, and according to eRank that puts them in the top 1% of all Etsy stores.

Sounds great until you realize what these numbers mean.

This is an average of 16 sales per day.

Assuming $5 profit per sale – I don’t know what they are selling so this might be generous – that is $80 per day or $2400 per month or $28,800 per year.

In other words – poverty income. Being in the top 1% of Etsy sellers means you are still in poverty when selling POD products.

No surprise this person’s Facebook profile indicates they also have a “real” job.

If you had a full-time job in California at McDonalds making $20 per hour you would be $160 per day plus benefits.

More income with potentially fewer hours because being in business yourself can be incredibly time consuming, although with POD much of the sales process is supposed to be hands-off. (However the customer support can be brutal).

POD to Etsy is heavily promoted on places like YouTube as a great way to make money. But for more than 99% of sellers, probably 99.9%, it is just a dream and another impossible get rich scheme.

No wonder there has been recent consolidation in the print on demand industry.

Did you know Amazon makes MORE money from Black Friday and other coupon sales even though products are cheaper? Yep.

This is how the coupon scam works …

Amazon charges a fee for product sales, typically 15% for many products.

So if a seller offers a product worth $30 and Amazon usually charges a 15% fee of $4.50 then the seller receives $25.50.

But when a coupon “sale” is done, such as Black Friday, Prime Day, other endless sales during the year, two things happen – PAY ATTENTION TO THIS:

1. Amazon charges its 15% based on the original product price – not the reduced coupon price.

2. Amazon charges the seller a “redemption fee” when a customer uses a coupon.

So if a seller offers a product worth $30 and Amazon usually charges a 15% fee of $4.50, if a $5 coupon is offered, the buyer will pay $25. The seller will only receive $19.90: $30 minus the $5.00 coupon minus the $4.50 Amazon fee based on the non-sale price minus a coupon redemption fee of $0.60.

Instead of making 15% ($4.50) on a $30 sale Amazon makes 20.4% ($5.10) on a $25 sale.

By using a coupon sale Amazon increased its cut of the buyer’s purchase by a whopping 36% from 15% to 20.4% by basing its fee on the non-sales price and charging the seller a redemption fee.

Wow.

This is a zero sum game where Amazon’s increased cut causes a reduced cut for sellers.

Customers get a deal. Amazon increases its profits 36 percent. Small business owners get screwed.

*** Note that Amazon INCREASES its profits from sales. Amazon is NOT offering a sales discount for itself when advertising coupon “deals” ***

But do customers really get a deal?

Sellers obviously have to increase their regular price accordingly which leads to higher prices for customers.

Bottom line: Coupon sales events such as Amazon’s Black Friday, Prime Day, other days lead to overall higher prices for customers, bigger profits for Amazon, and shrinking profits for business owners.

If Amazon were truly offering a “deal” it would not charge a coupon redemption fee and it would charge its commission based on the sales price paid, as well as decreasing its 15% rate. For example, if Amazon really wants to offer a 25% price discount it should not charge a coupon fee, base its commission on the sales price paid, and also reduce its commission rate and give the savings to buyers. Right?

One solution is to simply lower prices for product sales without needing to use a coupon – as happens in normal retail. It is the “coupon” which is the scam because it allows Amazon to maintain the product price for its commission rate and to extract a fee for use of the coupon. Business owners and customers would be better served if a $30 product was simply on sale for $25 without the need for the phony “coupon” which serves to increase Amazon’s profits and necessitates overall price increases so sellers can stay in business despite Amazon’s money grab.

How would you react to losing up to 50% of your pay from your employer? And paying it to your employer!

Welcome to the insane world of RedBubble.

RedBubble is an extremely poorly managed company from Australia. This penny stock enterprise has seen its market valuation drop a staggering 95 percent in value and the best end game scenario is likely a bankruptcy sale of the company to competent owners.

RedBubble is an online marketplace of products. Third party artists create designs which are placed on products such as mugs and shirts which are made and shipped by other companies. RedBubble sets a base price, guaranteeing its profit from every sale. The artists add their margin and that is the price the customer pays. Customer buys a product, RedBubble profits, and its costs are sending the design to the production and shipping company and paying the artist their margin. Easy money, right? Not if you’re RedBubble.

Repeatedly battered in the courts for illegal practices, in early 2023 RedBubble fired 1 in 7 (14 percent) of its employees. Then it cut in half how many designs an artist could create each day. One would think if a company needs more revenue it would seek more designs and sales, or increase prices. Instead, management came up with the new and wonderful reverse Robinhood strategy of stealing from the artists it depends on.

Here is how it works …

Instead of raising its base product prices which should guarantee the company a profit on every sale, RedBubble instituted a “tiered” program for artists which imposes a fee starting at an incredible 50 percent of the artists profits. If an artist can generate more sales the fee gradually declines to about 18.5 percent.

To be clear, how this works is if RedBubble’s base price for a product is $10.00 (which again, presumably is profitable with RedBubble only paying 4 dollars for its manufacture) and an artist adding their 20% margin for creating the design and marketing material to sell the product, then from the $12 paid by the consumer the artist receives $2.00. With the new Reverse Robinhood Strategy RedBubble is now taking up to a half, or $1 away from the artist and giving it to itself. So instead of the artist receiving $2, they only get $1.

The vague “tiers” mean if an artist sells enough, and becomes a rockstar, then can move up a “tier” and eventually not have to pay any fee.

There is no standard for who pays a fee or not. RedBubble makes clear it is at their discretion and there are no standards. Basically, RedBubble is just stealing up to half of the artists profits – taking money from the artists and putting it in its pocket.

How does one know what tier they will be in? LOL. RedBubble says artists have to accept new legal terms agreeing not to sue the company just to find out! Run that sentence back in your brain a few times. Yes, it is like the infamous Obamacare reference to needing to pass the law to find out what is in it.

Commonly, when a business needs more money they increase prices paid by consumers. When the government needs more money it taxes the rich. There is little purpose in taxing the poor because the poor don’t have the money.

Here, RedBubble is taxing the poor, up to 50 percent of their earnings. Ouch.

But if you’re a Rock Star that RedBubble does not want to piss off and drive away, then there is no fee.

Ultimately, RedBubble’s service is going to keep dwindling as artists leave, decide not to submit new designs to the service, and future Rock Stars never materialize because of the new fee.

If you are wondering if this is a tried and true strategy for businesses to follow when they are in financial distress – it is not. I cannot think of any company who has ever done this. It’s bonkers.

Ironically, there are many marketplaces similar to RedBubble and their number keeps increasing. It’s not like artists are trapped into using RedBubble because of its overwhelming marketplace clout. Rather, RedBubble is getting clobbered by Amazon and upstart print on demand companies.

If you are an artist considering Redbubble just stop. Don’t. Go anywhere else.

If you are an investor thinking the stock can only go up after dropping 95% and suddenly the company’s bank account will be juiced from stealing money from artists, think again. There are no dividends being paid. Nothing the company is doing will increase sales. Instead, sales will drop. This is a desperate and incredibly ill-conceived idea from a poorly managed company. If management were better it would be seeking a sale and that could be a reason to get in a low price. Frankly, it wouldn’t surprise me if the company was shopped for a sale after the initial juice of stolen artist money makes the books temporarily look better, but I wouldn’t expect a premium value to be paid to this mess of a company that is circling the drain.