Let me explain the Tier System, and what it is intended to achieve.
The Tier System is intended to provide a clear and transparent mechanism where we share the costs of operating the system across all Creators, while rewarding those Creators who bring more business to the site. There are two reasons for this: The administrative efforts involved in managing a Creator’s account is about the same per month whether they sell 2 products a month or 200 products a month; and a Creator selling a large number of products a month has their market on board already and does not benefit as much from generic advertising of the site as a whole (and may well be doing their own advertising anyway). For these reasons, we wanted a mechanism to reflect those factors in how we reward our Creators.
Let me stress, however, that there are no minimum sales required to be on this site. You are welcome to stay on the minimum tier forever, if that suits you. No-one is going to be off-boarded from insufficient sales. We wanted to encourage and support higher achievers, because their higher volumes provide a benefit to all other creators on the site. By bringing more customers to the Water Sprite Shop, they increase the visibility of other Creators as well. It is a win-win situation.
To achieve this, we have created a three tier system that provides greater returns to Creators who achieve higher sales. Creators who achieve higher turn-over will move up in tiers. Continued higher volumes are recognised through “locking in” a higher Tier for 12 months regardless of sales volumes.
How Tiers support Creators
The rewards from the different Tiers are a greater share of the profit from sales. Note that these values are only approximate, as they vary by product line, country of sale, and other factors. In addition, Creators at higher tiers can get access to more regular reporting and payouts.
To assist the lower Tier Creators, we include in the Tier system an undertaking to spend a portion of the profits from sales in advertising the Water Sprite Shop. This will be advertising of the Shop as a whole rather than any one Creator.
These Tiers are our default and standard position for products sold using our Print-on-Demand arrangements. Other arrangements apply for products sold on commission and for products for which specific alternative arrangements have been negotiated with the Creator. Arrangements with Creators are commercial agreements between Water Sprite and the Creator and the details might not be disclosed, including whether or not an alternative arrangement exists.
The Tiers
Qualifications for the different Tiers, and the cycles for reporting and payouts, are generally based around quarterly reporting periods, although Creators who qualify for ongoing Tier 2 or ongoing Tier 3 status may elect to switch to monthly reporting. The quarterly periods are the same for all Tiers: November – January (Report and payout occurs in February); February – April (Report and payout occurs in May); May – July (Report and payout occurs in August); and August – October (Report and payout occurs in November).
Tier 1
Creators in Tier 1 will receive (on average) 35% of the profit from sales. A further 20% of sales profit will be dedicated to advertising the Water Sprite Shop. Reporting and payouts will be quarterly.
Tier 2
Creators in Tier 2 will receive (on average) 50% of profit share. A further 10% of profit share will be dedicated to advertising the Water Sprite Shop. Tier 2 Creators generally receive quarterly reporting and payouts. Creators who qualify for ongoing Tier 2 status may elect to switch to monthly reporting and payouts (subject to some restrictions).
To qualify:
Creators who achieve at least AU$900 of sales over a quarterly reporting period will be promoted to Tier 2 for the following quarterly reporting period.
Creators who achieve Tier 2 status for three consecutive quarterly reporting periods qualify for ongoing Tier 2 status for the following 12 months (4 quarterly reporting periods).
In order to retain ongoing Tier 2 status for a further 12 month period, a Creator must have achieved sales volumes sufficient to qualify for Tier 2 status for 2 quarterly reporting periods during their 12 months of ongoing Tier 2 status – or, if they elected to switch to monthly reporting, have achieved sales of at least AU$300 in 6 of the 12 months.
Switching to monthly reporting and payouts
There is significant overhead for Water Sprite in calculating monthly figures. We encourage Tier 2 Creators to stay on the quarterly reporting period unless their sales volumes are reasonably consistent across the year. Where historical sales data suggests that the Creator will not achieve at least six months with sales of at least AU$300, we reserve the right to switch them back to 3 monthly reporting periods, or to decline their election to switch to monthly reporting. This decision will be revisited once further data suggests a more consistent level of ongoing sales.
Tier 3
Creators in Tier 3 will receive (on average) approximately 70% of profit share. Creators who qualify for ongoing Tier 3 status, or who achieve Tier 3 status while already holding ongoing Tier 2 status, can elect to have monthly payout and reporting reporting periods, subject to the same caveats as above.
Creators who achieve more than AU$3000 sales per quarterly reporting period, or, if on monthly reporting, at least AU$1000 sales per month for three consecutive months, will be promoted to Tier 3 for the following quarterly reporting period (or 3 months if on monthly reporting).
Creators who achieve Tier 3 status for three consecutive quarterly reporting periods qualify for ongoingTier 3 for the following 12 months (4 quarterly reporting periods).
In order to retain ongoing Tier 3 status for a further 12 month period, a Creator must have achieved sales volumes sufficient to qualify for Tier 3 status for 2 quarterly reporting periods during their 12 months of ongoing Tier 3 status – or, if they elected for monthly reporting, have achieve sales of at least AU$1000 in 6 of the 12 months.
A creator who fails to re-qualify for ongoing Tier 3 status, but whose figures would qualify for ongoing Tier 2 status if they had been at Tier 2 will revert to ongoing Tier 2 status at the end of their ongoing Tier 3 status.
Other Details
Water Sprite discretion
Water Sprite reserve the right to offer Creators a period at a higher Tier without them having qualified for that Tier according to these rules. We may do this to support them in times of need, in recognition of support they have provided us through advertising or other means, or on any other basis which we feel is reasonable.
Disclosure
This scheme is not intended to create a popularity contest, but to reward Creators who invest more effort in publicising their work on this site. In the interests of not creating a perception that some Creators are better than others, Water Sprite will NOT identify particular Creators as being at particular Tiers. Please see our Transparency Policy for what we will report.
Changes to Tiers
Water Sprite may amend the Tier system at any time, including changing the proportions of profit share and/or the thresholds at which the Tiers apply. If we decide to do so, we will give Creators at least one full reporting period in notice. During that period, Creators may choose to renegotiate their arrangements with Water Sprite, or may (on two weeks notice) withdraw their licence to Water Sprite for the sale of products with their intellectual property. Updates to the Tier system are not required to be advertised here in advance of any changes, but will be updated at the very least when those changes take effect.