PRSS 2017 Annual Report

34 Three Months Ended Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, 2016 2016 2016 2016 2017 2017 2017 2017 (in thousands, except average order size data ) CafePress.com orders 384 426 422 838 353 368 295 591 Retail Partner Channel orders 152 163 196 507 228 195 217 474 Total orders 536 589 618 1,345 581 563 512 1,065 CafePress.com average order size $ 39.84 $ 40.02 $ 38.06 $ 39.43 $ 38.78 $ 37.09 $ 37.13 $ 39.80 Retail Partner Channel average order size $ 21.00 $ 20.74 $ 17.72 $ 20.85 $ 20.43 $ 20.91 $ 20.29 $ 23.12 Total average order size $ 34.50 $ 34.70 $ 31.61 $ 32.42 $ 31.59 $ 31.49 $ 29.99 $ 32.37 Total Number of Orders Total number of orders represents the number of individual transactions that are made during the period. We monitor the total number of orders as a leading indicator of revenue trends. For the year ended December 31, 2017, the total number of orders was 2.7 million, a decrease of 0.4 million, or 12%, compared to the prior year. The decrease in orders was primarily the result of lower visitations to CafePress.com across all traffic sources that we believe is related to changes in search engine algorithms that occurred earlier in the year as well as a continued competitive online retail environment. Declines in orders at Cafepress.com were partially offset by the growth in business volumes within our Retail Partner Channel related to the continued expansion of our catalogs. Average Order Size Average order size is calculated as billings for a given period based on order date divided by the total number of associated orders in the same period. We recognize revenue when delivery has occurred or the service has been provided. Due to timing of meeting revenue recognition criteria, billings may not be recognized as revenue until the following period. We closely monitor the average order size as it relates to changes in order volume, product pricing and product mix. For the year ended December 31, 2017, the decrease in CafePress.com average order size of 2% as compared to the prior year was primarily related to a change in product mix as well as a reduction to our economy shipping pricing that occurred during the first half of 2017. The increase in Retail Partner Channel average order size of 7% was due to a focus on pricing that maintains a desired margin level as well as the fact that a free shipping promotion was conducted during the second half of 2016 that resulted in lower prices.