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http://www.ecommerce-guide.com/news/trends/article.php/3373631
By James Maguire June 25, 2004 For CafePress, it's all about getting their customers to spread the word. The site offers on-demand manufacturing of all manner of knick-knacks -- coffee mugs, t-shirts, mouse pads, hats, lunch boxes and more. Customers create and upload their custom graphics, which CafePress will print onto any of these items. This type of on-demand manufacturing is relatively common on the Net, but CafePress takes it a step further. They enable customers to build their own Web page on the CafePress site, selling the knick-knacks CafePress imprints. The sales transactions from these customer pages are handled by CafePress. The advantage -- from CafePress's standpoint -- is that each of its customers is working to drive traffic to CafePress. Instead of spending a lot on advertising, the site relies on its own customers. "If you open a store with us, you want everyone to know about your store," CafePress Chief Executive Maheesh Jain notes. This viral marketing "is built into the model of our company," he says. "We've spent very little money on the marketing of our service to bring in new sellers." Jain says that over 700,000 e-stores have been opened on CafePress since its founding in 1999. Riding Waves
To create this word-of-mouth advertising, the site rode many of the great Internet pop culture waves of the recent past. In the site's early days, "we went out of our way to find headline clients that already had traffic or brands, to give us exposure," Jain says. In 1999, for example, they set up a CafePress store with Mahir, the Turkish man who went on Letterman after his "I kiss you" site made him an Internet cult figure. CafePress has worked with political groups of many persuasions, imprinting many items for the Howard Dean grassroots campaign and for a Republican site, FreeRepublic, during the 2000 election recount. The site worked with many organizations selling merchandise to raise money for the Red Cross after Sept. 11. (CafePress donated a portion of the base price for this.) At this point, the site has reached critical mass: the Alexa site rating service indicates that CafePress's rating is around that of the 600th to 700th-ranked site on the Web, Jain says. Variable Mark-Up
Allowing CafePress to stay viable, its base prices are close to retail: A cotton t-shirt goes for $16.99, a coffee mug for $10.99. At this level, storeowners have to sell a lot of merchandise to make significant cash -- all the better for CafePress. The benefit for storeowners is that they never have to pre-purchase inventory. They merely upload a design, create a site on CafePress and work to drive sales. CafePress charges no upfront costs.
The site, seeing the potential for an expanded product line, recently moved into on-demand CD and book printing. Musicians upload their MP3 and authors upload their manuscripts. Self-publishing is apparently a growth market -- there are currently 3,500 music titles and 3,000 book titles. Secret Sauce
Over four million items are on display in the CafePress Web site, ready to be ordered from the site's factory. But many of these have never actually been made. While some of CafePress's sites are those of high-profile entrepreneurs or charities, others offer to put photos of a 1999 camping trip on your coffee mug. The site's pages are created dynamically, so they don't hang in cyberspace, but are created in response to user request -- like the products themselves. Jain is closed-mouthed about the production facility. "We don't talk about our manufacturing because we've spent a lot of money and time developing everything in it," he says -- and the company doesn't want to give ideas to potential competitors, like iUniverse, for example, which prints on-demand books. He does claim, however, that CafePress's ability to manufacture items one at a time and remain profitable is a core aspect of the business. The site's single-item manufacture process is "the secret sauce," he says. James Maguire is a contributor to eCommerce-Guide.com. His column appears every Friday.
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