Businessmodel of Zazzle

Customer Segments

Zazzle has a multi-sided business model, with two interdependent customer segments that are needed in order to operate:

• Consumers – Individuals who design products on the website, either by using their own ideas or templates on the site produced by designers
• Designers – Professionals and brands that produce designs/templates for consumers to use ### Value Proposition

Zazzle offers five primary value propositions: customization, accessibility, convenience, cost reduction, and brand/status.

The company enables customization by allowing customers to personalize products. They can apply their own designs to items such as T-shirts or mugs or use existing templates provided by designers on the website. It also allows designers to personalize their website storefronts.

The company creates accessibility by providing a wide variety of options. Because it enables customers to have design input, they can create products that they cannot purchase elsewhere. These products are offered in several different categories, including Clothing & T-Shirts; Cards & Postage; Art & Posters; Home & Pets; Office; Electronics; Accessories; and Craft Supplies.

The company offers convenience by making life simpler for customers. After designing an item, customers can visualize exactly what it will look like in real life before making an order. Most products are shipped within 24 hours. This is possible because items are only manufactured after they are ordered, resulting in low inventory. In addition, if customers are not satisfied with their products, they are allowed to return them for a replacement or refund within 30 days.

The company reduces costs. It allows customers to save as much as 20% off their orders by joining an e-mail list for Zazzle “insiders” that provides exclusive deals. Also, there are no listing fees or monthly/annual fees for designers.

The company has established a powerful brand due to its success. It bills itself as the world’s top platform for custom products, with over 30 million customers visiting its website monthly. It features hundreds of product lines and over 300 million unique products. It offers designs from over 600,000 professional designers and hundreds of leading brands. These brands include Disney, Warner Bros., Marvel, DC Comics, Coca-Cola, Hallmark, Getty Images, Nickelodeon, and Sesame Street.

Channels

Zazzle’s main channel is its website. The company promotes its offerings through its social media pages.

Customer Relationships

Zazzle’s customer relationship is primarily of a self-service nature. Customers utilize the service through the main platform while having limited interaction with employees.

The company’s site provides answers to frequently asked questions. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Zazzle’s business model entails maintaining a common platform between two parties:  consumers and designers. It also involves manufacturing some of its products.

Key Partners

Zazzle’s key partners are the suppliers that provide it with the equipment and raw materials it needs to run its operations and manufacture some of its products. It also forms partnerships with third-party manufacturers that produce various products.

Lastly, it operates the Zazzle Associates Program, through which third parties are invited to promote the company on their platforms (websites, mobile apps, etc.). Leads that result in purchases earn the third parties a commission.

Key Resources

Zazzle’s main resource is its proprietary software platform, which serves over 30 million customers.  It also depends on human resources in the form of manufacturers that produce some of its products and customer service personnel that provide support.

It maintains important physical resources in the form of its factory in San Jose, CA. Lastly, as a startup it has relied heavily on funding from investors, raising $46 million from three investors as of October 2007.

Cost Structure

Zazzle has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely transaction expenses, a fixed cost.

Other major drivers are cost of goods sold (a variable cost) and customer support/operations (a fixed cost).

Revenue Streams

Zazzle has one revenue stream: revenues it generates from the fees it charges customers for each completed sale.