How traffic pirates skim revenue from your Etsy shop

You may have heard all the ruckus about Pinterest of late and wondered, why is this such a big deal? It looks like this is just a successful social networking site that is driving lots of traffic to my Etsy shop.  Well…not exactly.   Read on and I’ll explain how sites like Pinterest really make money.  Note: I am using Pinterest as just one example of a type of website/business model that is growing rapidly.

 

Pinterest makes money by directing traffic to websites who agree to pay it commissions on clicks. These sites are called “affiliates” and the business model is called “affiliate marketing”. I give you this information so you can do your own research on this should you be so inclined.

 

So there you are, working away at growing your Etsy shop and you get an email from an online store with what sounds like an offer you can’t refuse. The online store will guarantee you tons of traffic to your Etsy listings. The best part, there are no fees, they do all the work and you only pay a 5% commission when something is sold.  How can you loose, right?

 

Here’s how.

 

When you agree to all this free traffic, you also agree to let the online store import all your Etsy listings. This will be easy as clicking the ‘agree” button. They do all the work, and there is no cost to you unless they actually sell something.

 

They import your Etsy links and mount them on their site. Then they have computer programs post those listings like crazy on sites like Pinterest. Pinterest (and LOTS of other sites like it) is based on code (example: http://www.skimlinks.com ) that works in the background to secretly redirect clicks to affiliate sites where they make a commission.  In fact, the system is engineered to seek out the affiliate site that pays the highest commissions. Remember that commission you agreed to ONLY if something sold.

You might think that lots of people are going to click directly to your Etsy shop too, but the system is expressly engineered to make sure that does not happen. It’s designed to redirect ALL interest in your work through the affiliate that pays the highest commission and you end up paying fees to the affiliate AND Etsy. But its much worse than that. You also cede copyright control over images of your work when you fall into these schemes.

 

A lot of artists are being lured into this right now because they think sites like Pinterest drive free traffic to their sites.  Pinterest did not invest millions of dollars developing their system to give you free traffic.  The other shoe is dropping. Heads up.

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Comment by Jim Binnion on March 21, 2012 at 6:50pm

Ok I still do not believe what you have written about Pinterest is correct.  You are combining several different topics. 

It seems to be popular right now for some in the art community to bash Pinterest without any proof that they are doing anything nefarious with the copyright issue.  I think if there is ever a court case involving it  their assertion that they own the copyright to any image you post will be ruled invalid.  But that is for the lawyers and courts to work out. I can pretty much guarantee that if they tried to claim ownership of a tremendous amount of the images that are being pinned they would get stomped by the multinationals that own the content the some Pinterest user has pinned. 

As for their using Skimlinks that has nothing to do with the vast majority of us. If you are running affiliate advertising on your site then it is skimming some revenue.  I don't really like the concept (and am curious how legal it is) but I don't like affiliate advertising in the first place much of it it is a cesspool of ethically challenged marketers and really could care less if they start loosing money.  Pinterest does not direct your link to a site with affiliate advertising  but rather Skimlinks mucks with a link that is already directed to an affiliate marketing network. So as long as you are not posting links to an affiliate marketing site you should have no problem with this process. If you are interested you might want to read about how affiliate marketing works here http://en.wikipedia.org/wiki/Affiliate_marketing

So as far as I can tell the main issue in your post that might be of concern to us has nothing to do with Pinterest, it is giving someone access to your Etsy shop  to "market" your work and them ripping you off.  Why would anyone give someone the right to do this? This is pretty much like getting involved with a Nigerian "we want to buy all of your most expensive items " scam.  What does Pinterest have to do with this?  If you link directly to your own website or Etsy page there is no affiliate marketing code involved so Skimlinks will not be able do do anything to you.

There is no free lunch, no one is going to market your work for noting. They are going to get paid somehow. So if someone offers to market your work you had better understand how they are going to get paid before you allow them into your business.

Comment by 2Roses on March 19, 2012 at 5:50pm

Here are a few links Jim...and you are absolutely correct in stating that others are doing the same thing Pinterest is. We have said from the get-go that Pinterest is just an example of this kind of practice. They have made it quite clear that it is an affiliate marketing engine, and affiliates pay Pinterest fees for traffic. He who pays the highest fees gets the traffic. 

http://techcrunch.com/2012/02/08/skimlinks-is-the-real-story-behind-pinterests-success/
http://llsocial.com/2012/02/pinterest-modifying-user-submitted-pins/
http://skimlinks.com/

Comment by Jim Binnion on March 18, 2012 at 9:59pm

John, could please cite sources for this. Because I believe you are mixing up what Pinterest does with some rather predatory marketing schemes by other parties. Pinterest currently has no business model that anyone can discern. There is much speculation how they will actually make money. If you do some Googleing of "pinterest business model" you will see lots of speculation on this topic but no one really knows how they will monetize their service. I am certain that the scheme you mention is taking place but they don't need the approval of or to pay Pinterest to do so. 

Comment by Alison B. Antelman on March 13, 2012 at 1:02pm

Let's say I have an etsy shop and someone else posts MY images on pinterest, can they still proceed in the way described below? and if I did not post the images, how can they violate my copyright when I was ignorant of the posting in the first place?

Comment by 2Roses on March 13, 2012 at 12:50pm

Harriete is correct on all counts. The main issue is that Pinterest will direct clicks on an artist's image to the source that is most financially beneficial to Pinterest, not the artist. This is done with program code behind the scenes and is completely invisible to users. That is why Pinterest takes copyright to the image and that is why despite all their talk, in action, they are completely disinterested in crediting sources.

Its important to note that none of this is necessarily bad, and could even be beneficial for artists, IF artists knew how the game works and could play with full knowledge to protect their own interests. At the moment this is all being done in secret, and most artists are completely unaware of how this impacts them legally and financially.

What we and Harriete are trying to do is shine a light on predatory technology and practices that interject themselves into your revenue stream. If you can understand how this works and adjust your business practices and pricing to accommodate it, you might come out ahead. If you don't, you're going to loose. 

One thing's for certain, Pinterest is in this to make money. Follow the money.

Comment by Harriete E Berman on March 13, 2012 at 12:19pm

I think the difference is
          the lack of transparency in the revenue model

          copyright violations because the images are "taken or borrowed" without permission from the artist

          the images are often distributed without credit to the artist, description, photo credit, or appropriate links.

         the artist and gallery agree (usually by contract) that the gallery promotes the work so that they BOTH make money (if the work is sold.)
  

          The Pinterest model is that they (Pinterest) makes money with no control from the artist or money for the artist.

          Tip of the iceberg points. Please add your own.

Comment by Corey Ackelmire on March 13, 2012 at 12:13pm

Why is this commission worse than when artists sell work through brick and mortar galleries that often take 50% commission?  Don't those galleries also use artists' images for promotion, etc.?  I'm just curious.

Comment by Harriete E Berman on March 12, 2012 at 10:05am

Thanks for explaining this John.   Pinterest did not invest millions of dollars developing their system to give you free traffic. There is nothing you can do about this, but every pinner on Pinterest can at least give complete acknowledgment to the artists and maker with a complete description, photo credit (if necessary) and link to the artists web site, blog, or marketplace (instead of a Google image search.) I also suggest you ask permission before posting copyrighted images that are not your own.

 Post this scarlet P as an acknowledgement that you are aware of these issues. Harriete

Harriete

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