Call it a craft fair that meets Amazon.com. CafePress operates an online service that connects millions of buyers and sellers of print-on-demand products. If you've dreamed up a catchy slogan or an arresting image, the company's flagship website, CafePress.com, will print it for you on a T-shirt, hat, mug, poster, or other product; post it on cafepress.com for sale; and then ship it off and collect payments, keeping a nominal base fee for itself. The company's growing portfolio of websites includes ezprints.com, GreatBigCanvas.com, CanvasOnDemand.com, Imagekind.com. and InvitationBox.com, and boasts more than 19 million members across all of its properties. Founded in 1999, CafePress went public in 2012.
The proceeds from the March 2012 initial public offering, which raised about $85 million, were used for general corporate purposes. Following the IPO, the company's significant shareholders included co-founder and Chief Product Officer, Fred Durham, with about 12% of the shares, and co-founder Maheesh Jain, with 11%. Also, the venture capital firm Sequoia Capital Funds owns about 17%.
Louisville, Kentucky-based CafePress rings up 90% of its sales from customers in the US. International customers account for the rest. The company has localized websites for the US, Australia, Canada, France, Germany, Spain, and the UK.
Sales and Marketing
CafePress relies on search engine marketing, word-of-mouth referrals, trade publications, catalogs, and the expanding universe of new viral marketing channels in online advertising and social media to promote its services. The company's advertising expenses totaled $24.2 million in 2012, up from $15.3 million and $10.5 million in 2011 and 2010, respectively.
The company's sales increased 24% in 2012 versus 2011, to $217.8 million. The double-digit increase was driven by an increase in orders from new customers, more business from existing clients, an expanded merchandise catalog -- particularly new art products and stationery -- as well as an increase in average order size and price hikes. Acquisitions helped too, contributing 10% of the increase in sales. 2012 marked the third consecutive year of steeply rising sales for the growing company, although profits have been harder to come by. Indeed, despite the significant increase in sales, CafePress was unprofitable in 2012, posting a loss of $82,000 versus net income of $3.6 million in 2011.
Like online auctioneer eBay, CafePress links buyers with sellers (called content owners). A pioneer in what is known as user-generated commerce, CafePress boasts a business strategy that includes more than just scratching the surface of coffee mugs and other products. To that end, CafePress has grown and diversified its e-commerce platforms and services by acquiring other companies.
Mergers and Acquisitions
In October 2012 CafePress acquired EZPrints, Inc., a software and services company that supplies a licensed platform to brands seeking customization services for their e-commerce services. In April of the same year, the company purchased Logo'd Sportwear, Inc., a privately-held company in Cheshire, Connecticut the lets teams, schools, and other organizations design, buy, share, and sell customer gear. Also, in October 2011 the company acquired L&S Retail Ventures, the operator of InvitationBox.com, an online customized stationery company based in North Carolina. The purchase price included an initial payment of $4.5 million with up to $8 million in performance-based future payments.
Previously, CafePress bought Imagekind, which operates a website for buying and selling prints, posters, frames, and other visual media.
In addition to extending its product line, CafePress has been growing by inking deals with some heavy corporate heavy hitters. It provides marketing Web space for other companies, such as Discovery Communications and the March of Dimes, and holds licensing agreements with more than 90 copyrighted/trademarked materials.
In June 2011 the company changed its name from CafePress.com, Inc. to CafePress Inc.