30 Dec 2011
Interviews
Re-posting our interview on TideArt.com about CGTrader business model and how it differentiates from other 3D stock shops.
Could you briefly describe yourself?
My name is Marius Kalytis. When I was 16 I found a passion for 3D graphics and been deep into it since then. Although my graduation is financial mathematics, I worked as a web programmer, 3D and post production designer in many fields, like game development, TV commercials and architecture visualization. In 2005 I founded a 3D visualization and animation company called Visual Mind. Later a partnership was established between me and Donatas Aksomitas, who is a shareholder of AGA-CAD company. Together we came up with a new business model that helps artists trade CG content. Going through many transformations, CGTrader became a unique solution and an alternative for other 3D online shops.
What is CGTrader and what was your goal behind it?
CGTrader is a platform where 3D designers can buy and sell 3D models. It does not act as middleman but more like a marketplace where every artist has his own shop. It's like Ebay but for 3D designers.
We have several goals in mind. First, we want to expand the 3D stock market. To do this, we have to make better conditions for artists and motivate them to publish high quality models online. We believe that giving maximum returns to artists is the best way to do this.
We also want to make an opportunity for 3D artists to become professional sellers and make it possible to make a living solely from online selling. I see a lot of benefits in selling 3D models as compared to freelancing. You don't have tight deadlines and the stress that comes with it. The only problem is that due to large commissions, selling 3D models is less profitable than freelancing. The problem of low returns creates a harmful loop between sellers and customers. The sellers don't get enough incentives to work on quality and customers can't find wide selections of high quality 3D models for a good price. It hinders demand in the market and subsequently the supply.
How does this site compare with other similar sites like ShareCG and TurboSquid?
CGTrader is different in many ways compared to other 3D shops. First of all, we don't take commission percentages, but use a peer-to-peer system that enables authors to get 100% of the sale directly from customers. This solves many issues that arise when selling through middlemen. The biggest advantage is of course that for even average priced models, artists get twice and sometimes even triple as much as they would get if the model were sold on Turbosquid. And the higher is the price, the more profitable it gets to sell on CGTrader. This peer-to-peer model brings benefits for both parties: artists get better returns thus can lower the price and get more sales and customers get lower prices for the same quality.
It eliminates the problem known as undercutting, where competing sellers start to lower the prices close to a few dollars. On CGTrader it is illogical to lower the price below $5, because then you would get nothing.
Further, the artists don't have to wait a whole month for payment, because they get the money instantly after the purchase has been made. It also bypasses the illogical IRS 30% tax that many artists are obliged to pay on top of what is left after the commissions are taken.
You put an emphasis on the peer to peer model, how does that work exactly?
The idea is very simple:
- Publish a 3D model on CGTrader for free.
- On a sale, get 100% from the buyer directly to your Paypal account.
- After the sale, pay an activation fee to put the product back on sale.
Depending on the turnover rate of a particular 3D model, artists can choose the most appropriate type of activation:
- One-time activation: $5 (activate product until the next sale)
- Annual activation: $20 (activate product for one year term, since the activation moment)
This model is very effective and risk-free, because once you sold an object, you already have the money needed to pay for activation. Secondly, the sale means that your model has value, so it is worth it to activate it as a valuable product that will likely generate royalties in the future.
This seems to offer a very good deal as far as payment goes, what's your business plan for the site?
Our business model adhere to LEAN principles. The core idea is to maximize customer value while minimizing waste. By minimizing unnecessary costs we can give more value to the content creators and still be able to do business. For example, middlemen are bound to have bloated customer support to deal with all product issues they resell. We believe sellers should have the right to choose whether they can handle it by themselves or someone else. And there's no doubt that the author, who knows his 3D model inside out, can solve product related issues far better than anyone else. For those who don't want to deal with customers but rather concentrate on modeling, we will offer a service to handle customer support for them. The difference is that on CGTrader authors can choose whether they want to make maximum returns by doing business themselves or outsource some work to us.
In the near future we are going to introduce other services to supplement our income. For example product publishing service for those who don't want to spend time on boring publishing processes. There are many more ideas which will be revealed in the future.
CGTrader has been in beta for some time, is anything different now that it's no longer in beta?
The beta period was basically needed to test transaction processes, fix major bugs and assure our security requirements. We understand that many professional sellers are cautious about uploading their valuable libraries to new shops. They want to be sure that the system is secure and the business behind it is well-established. After almost a year, we are happy to announce that we have reached these objectives. Now we can state with certainty that the system is stable and secure. At the moment we are negotiating with several investors about expanding our business and making it even more compelling to our users.
Around how many models do you have, and do you have plans to carry other items, like textures, scripts or plugins?
At the moment we have around 1600 models and the growth is accelerating. Our goal is to build a strong community and a large enough library so that customers can easily find a wide selection of what they are looking for. The sooner we grow this place, the sooner authors will be able to earn royalties they deserve.
Yes, we plan to make this the platform where artists can trade various assets, not just 3D models, hence the title is CG Trader. We already implemented Revit models and in the near future we are going to add new types of products like textures, plugins and tutorials.
How has user feedback been during the beta process?
Its been great! We were happy to get instant attention from many professional sellers, which helped to track bugs and suggested many useful features. I would like to thank all the members who dedicated their time and helped to build this platform! Without them we wouldn't be able to succeed.
Do you have any feature in the work that you can talk about?
Recently we developed the Revit browser that lets users sell 3D models directly from Revit. We are also working on the new publisher, that will make the publishing process easy and fast. It will have a brand new interface and innovative tools for writing tags and descriptions. We are working on final touches and will integrate it in coming days.
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