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[amezri]

So.. it may be that they're not so sinister.. and I may signup with them at a later date. All this online selling stuff still seems sketchy and I don't know if I made the right choice going to Zazzle.com. *shrug*

Hi Cyn,

Thank you for responding to me. I don't want you to think I will continue
to send you emails so please consider this my last email to you. I will
remove your account and information from CafePress. I just want to explain
a little more... to at least you give some of the reasoning behind some of
these changes.

Regarding the reason for the 5% fee: due to the growing productline we have,
we are seeing that people have marked their products up a lot. The increase
mark up on some products, along with fraud, is costing us money. We are
actually losing money on some products. The purpose is to charge 5% off the
mark up, which is $0.05 for each dollar, to cover the costs. We have
thought about raising the base price but the 5% fee is actually in the
member's favor. If we were to mark up a t-shirt by $0.25, that's actually
5% off a $5 mark up, which most people won't mark up to. The transaction
fee is something that is very common to other commerce sites such as eBay
and Amazon.

As for the $25 fee, it looks like we may be changing this. We have a post
open for suggestions on what we can do. It also offers a brief explanation:
http://pub80.ezboard.com/fcafepressstoreownersforumfrm28.showMessage?topicID=33.topic

Just to be clear, the $25 is not a fee that is charged each month. Itsimply zeros out the account.

Regarding the tax information, here is a Q&A that might help clarify the
reasoning... I'm not a tax or accounting person but I think this was
written for all to get a better understanding.

Why do we require tax information from all members?
--------------------------------------------------------------------------------
As many of you have noticed, we are now requiring tax information from all
our members. Believe me, we aren't doing this because it's fun! Many of
asked why - so if you are interested in the details...

- The IRS requires us to collect tax information or withhold earnings for
taxes from all members (US citizens) earning over $600 in commissions within
a year or $10 in royalties.

So here's where this post gets interesting (if you find accounting
interesting). We have done our best to make the argument that the
commissions we pay to our members are not royalties. You may notice that
Section 6.2 states that you give us royalty-free permission to use your
images - this is why we explicitly put that language in our agreement. But
our accountants feel the IRS might not believe that as standard industry
practice for selling merchandise involves licensing and royalties. So we
have to cover our butt to make sure Uncle Sam doesn't present us with a huge
tax bill for the earnings we are paying you.

-Some of the questions on the message boards have asked "Why not collect tax
info once a member reaches $600 in commissions"?

Two reasons. Number 1 is we are running into this $10 royalty issue
mentioned above - so we might be liable for your taxes once you earn $10,
and not $600. The second is that once a member reaches $600 in commissions,
we are automatically liable for $180 of their tax bill unless they are
willing to give us their tax info (30% x $600 = $180). While we love and
trust all of you - that's a big risk for us to take across our over 500,000
members.

As I mentioned, we've done our best to avoid this whole issue over the past
two years, but we've grown to the point where we need to collect this
information to keep Uncle Sam happy. Not that this makes it any better, but
other sites paying out money such as Amazon's Associates Program and
Commission Junction also require this information. Seems like its standard
practice.

Hope this helps!

So. What do you guys think? Are they just weaseling out of it or really trying to correct their errors? It seems a mix of both. I'd actually rather they just raise the base price of the product and not cut into my profits. If they get rid of the $25 thing I might think about going back.

Comments

[ronniefairy.livejournal.com]

What they said seems to sound reasonable, not that I know much about accounting or how the tax system works in the US, but it sound like the government would work exaclty like they said.... Would it be worth emailing again and telling them what you would like to see, especially as they seem willing to listen to what you've already said, and unlike most companies didn't just ignore it

Re:

[amezri.livejournal.com]

Yeah, it does. So I emailed abck and said I would think about joining again once the $25 thing is worked out. *shrug*