Your Lenses, Your Money

Hot dog, lensmasters! Hope this helps out with your royalty-related questions. If you don't find what you're looking for here, please stop by SquidU, where there's a live Q&A session, a forum, and links to get help. Or try any of these great resources:
http://www.squidoo.com/paymentfaq
http://www.squidoo.com/charityfaq
or the Answer Deck


THE TOP 5 THINGS YOU NEED TO KNOW

1. You're responsible for setting up a PayPal account in order to receive your Squidoo cash royalties, and for making sure your correct PayPal address is on file with us in your account. If it's not, we can't handle disputes and complaints, and will donate your royalties to charity.
2. If you don't want to hassle with PayPal and money, no problem! Squidoo is about a lot more than the cash. Your account will automatically start off earmarked to charity. Then if you decide you want to hook up PayPal and get cash instead, you can at any time.
3. Make sure you check out your Cash Payout Threshold. It automatically starts off at $10, which means we'll only pay you via PayPal once your account reaches $10. But if you'd like your cash sooner, set it to $1! If you don't reach your Cash Payout Threshold for more than a year, we'll assume you're not here for the money and will roll your money over to charity. So if you want, keep it low!
4. You're also responsible for confirming that your cash and charity settings for each lens are what you think they are. You can login to your account and see your Payment Settings Manager to make sure your account is doing what you expected it do.
5. Squidoo reserves the right to default your account and its earnings to charity if you're caught violating our TOS or SquidDon't policies. Play hard and play fair, and you've got a great shot at raising real money. Play unfair and you're out.



DO I HAVE TO PAY TO BUILD A LENS?

No, no and no! Building lenses is free--that's a cornerstone of why we're here.


HOW DO I MAKE MONEY?

Our goal is to continue building a self-sustaining, profitable company that shares a large portion of our income with charities and with our core community, the lensmasters who build our lenses (that's you). Here's how the money comes in, and how it gets paid out.

Squidoo makes money 2 ways: ads, and affiliate revenue. This means Google ads or other ads we contract to run, and affiliate income from Amazon, eBay, CafePress and more.

Ad revenue (Google and other ads). This money goes into a pool, so as to avoide clickfraud. Half of the pool distributes out to lensmasters, on a PayRank scale that is based on each lens's average LensRank and traffic, and the number and quality of lenses in the lensmaster's account.

Affiliate revenue (ie, referral income--like Amazon and eBay and CafePress). This is directly attributable to the lens that generated the revenue, and is not pooled with the whole co-op. The lensmaster gets a straight 50%.

We show your previous and estimated pending earnings on your Dashboard, so that you can keep track of your royalties.


WHAT IS THE RESERVE HOPPER?

If you had earnings from previous pay periods that didn't reach your Cash Payout Threshold, they're carried over and stored here until they do. Your Reserve Hopper is not live--it's updated monthly with any carryovers from the previous payperiod. If your Reserve Hopper hasn't reached your Cash Payout Threshold (see below) in a year, we will assume you've abandoned your account or aren't here for the money, and will roll that money into the Charity Fund. To avoid that happening, keep your Cash Payout Threshold low!


WHY IS THERE LAG TIME BETWEEN WHEN I EARN AND WHEN I GET PAID?

Most affiliate programs have a 30 day processing delay, which is why there's always a 1 month lag time between when money is earned and when it is paid. The totals can fluctuate if sales are cancelled or returned, so the Pending $$ numbers are just estimates.


WHY DID I GET A REFER-A-FRIEND BONUS?

If you invited a friend to make a lens, and your friend's account earned its first $15 during our recent pay period, YOU get a $5 bonus! W00t! (This program used to include paying your friend a $5 bonus too, during our beta test. That has been discontinued).


GLOBAL PAYMENT SETTINGS:

Let's say you're a big fan of the nonprofit organization Donors Choose. (You better believe we are!) Now you can, in one easy step, change all your royalty settings on all your lenses over to donate to that charity. Just visit your Account here and select "Change all my existing lenses to use this payment setting." Even handier, check out this Payment Settings Manager to make sure your money is going where you think it is.


EXPLAINING THE CASH PAYOUT THRESHOLD?

Every account has a configurable Cash Payout Threshold. Um, English please? Basically, we want to let you decide when you get paid. If you're the type who likes finding a long-forgotten twentydollar bill in your pocket, maybe this is for you. If you want to get paid when your account reaches $1... $5... $50... and so on, you control your destiny!

SO, here's how it works:
The Squidoo default Cash Payout Threshold starts at $10. This means that if you don't edit your threshold, you will get paid when your account (across all your lenses) earns $10 or more in cash (not for charity).

Reset the threshold to whatever you want! Change it here.

As you know, when you make a lens you get to choose whether you'd like to receive all your royalties in cash, give all your royalties to charity, or a combination of the two. So, if any portion of your lenses is set to cash payment, that cut is what goes into your account's pending cash bucket (AKA your "reserve hopper"). Then once your account reaches $X in cash (as above), we'll get you paid in a jiffy.

If 100% of all your royalties on all your lenses are going to charity, the Cash Payout Threshold is a moot point. Why? 'Cause all your cash is paying out each month to charity. (And you get a hearty pat on the back for your generosity).

Yes, your cash earnings roll over from one month to the next! Let's say one of your lenses earned $2 last month. But your Cash Payout Threshold is set to $10. That $2 will roll over to the next month and the next and so on until your entire account has earned $10. To make it easy, we'll always show your cash Reserve on your dashboard so you know how close you are to your threshold.

Q: It's the middle of the month, and I just changed my Cash Payout Threshold. Will this new threshold be in effect for the next Squidoo payment?
A: Oui oui. Even if you change to a new threshold the day before we process payment, it will be active. Of course, if you change your threshold the day AFTER we process payment, you'll need to wait until next month's round to get paid out.


IF YOU HAVEN'T REACHED A PAYOUT IN A YEAR...

It's worth knowing that if you go more than twelve months without reaching a payout, regardless of how small, we'll assume you've abandoned your account or aren't here for the money, and your unclaimed royalties will be returned to our system and applied to our overhead and the Charity Fund. In April of 2009, for example, we'll zero out any cash generated by your account since April of 2008, but which you never claimed via PayPal. So if you want to make sure you continue getting your money (we hope you do!) whether it's $1 or $100 waiting for you in Squidoo, keep your Cash Payout Threshold low. And make sure your correct PayPal address is on file with us in your account.

Why are we even bothering? Accounting clarity. We want to pay lots of people a lot of money! But we don't want to "owe" lots of people a few cents, especially if they've abandoned their accounts. Easier and cleaner for everyone involved if we zero out unclaimed pennies after a year, and donate it to charity instead.

Who will this affect? Well, as a policy it applies to all lensmasters. But in action, it only affects people who have their payment settings earmarked to cash, but haven't claimed their royalties even once in the past year. So if you HAVE reached your Cash Payout Threshold in the last year and HAVE claimed your earnings from us via PayPal, you won't even know that this policy exists. That's most of you.



PAYOUT, TIERS, AND LOTS MORE

This is a long description about how money is earned and paid out at Squidoo. I hope you'll take 4 minutes to read it.
As we've explained in painstaking detail in lots of places, we at Squidoo pay our community 50% of all our revenue. Yes, half! We give 5% to charity, take 45% for our own operating costs, and give 50% to our lensmasters as a royalty for their good content.

You, the lensmaster, could earn royalties two ways: 1) through moneymaker modules (like eBay, Amazon and CafePress) and 2) through Google ads and other display ads that run on your lenses. The moneymaker modules are the easiest to track: whatever sale you make, we give you 50% of our referral bounty from that affiliate. You don't share it with any other lensmasters; it's all yours. That's called a "directly attributable" royalty.

So how do we pay the second part, the community's half of our Google and display ads? As you know, we put 50% of our earnings from those ads straight into a bucket just for lensmasters. We pool that money in order to prevent click fraud -- this is a pretty common solution.

Then, we divide that pooled ad money based on the "goodness of your lenses" -- which in our economy means LensRank. The earning number that we calculate according to your LensRank is called PayRank, or, as lensmasters have popularly started to call it: the "tier system."

The first thing to know about tiers is that not all lenses are created equal. We work in a meritocracy, where lenses earn royalties based on how well they perform. We believe in paying our best people, who make the best lenses, more.

The second and perhaps most important thing to know about tiers is that they can change at any time. The percentages are constantly changing based on how many lenses there are on Squidoo and how much money is in the ad pool each month. So while reading the tea leaves and trying to predict your ad pool share can be fun, all you're really doing is guessing.

The third thing to remember about tiers is that they only affect your cut of the ad pool. Whatever you earn via moneymakers on your lenses, like Amazon or eBay modules, you always get a straight 50% cut.

For even more specifics, here's how tiers work: Lenses with higher average lensrank for the month get a higher percentage of the ad pool than other lenses. Lenses that perform poorly in LensRank, after a certain threshold, get no percentage of the ad pool.

So for example, if your lens is has an average LensRank of #100 for the month, that's really good! (Important to remember that we count the average, not just the LensRank of the lens on payday). That lens would be in Tier #1, and would get the highest percentage of the ad pool possible.

Now imagine you had a lens that has performed well, but not as well in LensRank as in the scenario above. That lens would get a smaller percentage of the ad pool.

And if a lens has an average LensRank of #400,000, let's say, well, we're making the bet that lens needs some work and isn't that useful to readers on the web. It probably didn't get much traffic or contribute a whole lot of goodness to the whole Squidoo community (and didn't drive any ad clicks, either), so that lens gets 0% of the ad pool.

In an effort to illustrate this more clearly, here is the working data for the month of December 2008 on tiers. We reserve the right to change this at any point in the future, to recalibrate the tiers as the site grows. Our goal is to pay out best lensmasters, the most. As more lensmasters make better and better lenses, it might make sense to shift the tiers in the future. So please read this scale as an example only, and know that it can change from month to month.

On the December 2008 payday:
--Tier One: Lenses with an average LensRank of #1 to #2,000 get 25% of the ad pool.
--Tier Two: Lenses with an average LensRank of #2,001 to #10,000 get 17% of the ad pool.
--Tier Three: Lenses with an average LensRank of #10,001 to #85,000 get 8% of the ad pool
--Last Tier (the Zero Tier): Lenses with an average LensRank more than #85,000 get 0% of the ad pool. (But are, of course, still eligible to get 50% of any directly attributable sales they make. Just not a cut of the community ad pool).

So that's it. No hidden tricks.

The point, the whole point, is this: Make good content. Make useful pages that help people learn or interact or connect or buy. The better your page does, the higher a royalty you earn from it.

P.S. If you're only going to read a little, read this:

There is absolutely no value to you in trying to figure out details of next month's tiers, or to guess or to count on how this money is allocated. We say that not in order to obscure data, but to save you time. Lensrank and Payrank changes all the time. One thing you can be certain of is that while it can seem a little random, it's always as fair as we can make it. We always pay out 50% (which is more than we promised, because while we have the right to apply this money to overhead, we never have) and we never make side deals or special payments. That way, you can spend your time and energy building and promoting great lenses instead of worrying about the system. To be fair to everyone, the Squidoo team won't engage in any special correspondence about the tier payouts... we'll post updates here from time to time, but that's it.


WHAT DOES "PENDING $$" ON MY DASHBOARD MEAN?

The Pending $$ column on your dashboard indicates estimated royalties that you've earned recently from affiliate partners (Amazon, eBay, CafePress, etc) and are still pending clearance from those affiliates. Most affiliate programs have a 30 day processing delay, which is why there's always a 1 month lag time between when money is earned and when it is paid. The totals can sometimes fluctuate if sales are cancelled or returned, which is why the Pending $$ numbers are just estimates.

So look at this sample scenario: In early September we processed payment for your money earned from July 1 - 30. If your July earnings reached your Cash Payout Threshold, you get paid via PayPal right away. If your July earnings DON'T reach your Cash Payout Threshold, they get moved into your Reserve Hopper. And if your July earnings were all set to go to charity, we donate them immediately. SO... any royalties your lenses earned after July 31 are what appear in the live Pending $$ column on your dashboard. These are your estimated affiliate sales (Amazon, CafePress, eBay, etc) that occurred from August 1 on. When we process payment again in early October, we'll pay you the portion of your Pending $$ that was earned during August 1-August 31.


WHEN IS PAYDAY?

Close to the beginning of every month! If your lenses have generated cash or money for charity, keep an eye on your My Lenses dashboard for a report of your earnings. If you're one of those people who refreshes your screen and keeps an eye on your money like a hawk, consider the 15th the deadline, and anything before that is a bonus!


HOW DOES SQUIDOO USE PAYPAL?

Squidoo uses PayPal to send you cash. And if you've selected to send your royalties to charity, we make a donation to them in your name. (Find out more about our growing charity choices below). PayPal serves over 96 million customers in 55 countries and is a trusted eBay company. Read more about how we use PayPal.


WHAT IF I'M NOT IN ANY PAYPAL SUPPORTED COUNTRY?
Find out which countries do and don't accept PayPal.

If you're from a country outside of PayPal's reach, here's what a few of our other lensmasters in the same situation have recommended: a) find someone in an "included" country to accept payment for you or b) send your royalties to the charity of your choice. We're hoping to extend our support over time and apologize for the inconvenience!


HOW DO I GET A NEW CHARITY ADDED so that I can send my royalties to them?

Squidoo.com now supports nearly 100 nonprofit organizations, from the world's most popular causes right down to tiny local animal shelters.

Lensmasters can choose to donate their royalties to any of our supported causes. And at last count, about 40% of them are doing just that. Wow. So keep up the great work.

If you're a nonprofit interested to apply as a partner, this lens is for you: www.squidoo.com/charity-sign-up.


  • WHY DOES MY DASHBOARD SHOW A NEGATIVE COMMISSION?

    Ouchie! If your lens is reporting a negative earnings balance, it's most likely due to a product that was purchased from your lens but later returned. Usually the return chargeback occurs a month or two after the original purchase, which is why the negative balance becomes more obvious right after our monthly payment.

    Each of our affiliates is a little different, and they all report to us in different ways. While we're still working on a system for reporting product purchases from our CJ, any Amazon purchases that are returned will be listed in your "Amazon Orders" stats section.


    DOES SQUIDOO MAKE A PROFIT?

    Yes, Squidoo is an old-fashioned corporation, with real employees real server fees and real PB&J lunches to be eaten. We divide up the money we receive in a very public, very simple way. Here's what we do with the cash we receive from advertisers, Amazon, eBay and others: We pay 50% to you, our lensmasters, or to the charities you select. We pay 5% to our charity fund and we keep 45% to cover our costs. We don't make any deductions or take any long-term reserves. In fact, we never have.