NEW ORDER EXPLANATION
Posted: Sunday, February 03, 2019 10:35:59 AM
SK DesignWorks wrote:
Hi all,

I just sold a throw pillow. Of course, I was thrilled. But after looking closer, I don't understand the numbers. The pillow sells for $32.95. There is a 15% discount promotion, for a price of $27.84. My royalty rate is 14.5%. So my royalty should have been $4.04. However, my royalty was only $2.85. The product ID is: Product ID: 189141074849692955
Here is the entry....Can anyone help me understand what I'm seeing?




You earn less when it is a 3rd Party
Posted: Sunday, February 03, 2019 10:46:14 AM
I think that this is because it is a 3rd party referral - a portion of your royalty goes to the person who has made the referral. I'm not entirely sure how it all works out, because I can't make the math work out at a straight up 15% to the referrer, but I do believe that is why you aren't seeing the whole amount.
Posted: Sunday, February 03, 2019 10:53:52 AM
I think the math has been explained before in the forums. You may probably find threads about it.
Posted: Sunday, February 03, 2019 10:59:24 AM
SK DesignWorks wrote:
Gina ┬ęgleem wrote:
I think the math has been explained before in the forums. You may probably find threads about it.


Thank you! I just realized this was supposed to be under a different thread. So i'm going to delete this and move it.


You can't delete it. It has replies.
Leave it up to Zazzle to delete/move if necessary.
Posted: Sunday, February 03, 2019 11:57:46 AM
Royalties are applied to the sale price after any discounts. If it's a third party referral, the referrer gets 15% of that sale price. Zazzle covers most of that referral cost. Designers chip in 20% of their royalty on that sale.

Here's an example, which assumes a list price of $10 US, and a royalty of 10%, to keep things simple:

Sale with no discount, no referral: You make $1

Sale with 25% discount, no referral: You make $0.75

Sale with no discount, referred by third party: You make $0.80

Sale with 25% discount, referred by third party: You make $0.60

Sale with no discount, self-referred: You make $2.30 ($0.80 + $1.50)

Sale with 25% discount, self-referred: You make $1.73 ($0.60 + $1.125, rounded up)

This is based on the assumption that even on self-referred sales, you still pay the 20% carveout on the royalty.

If I'm wrong, someone who knows better please provide a correction.
Posted: Sunday, February 03, 2019 12:36:29 PM
Fuzzy Felosarix wrote:
Royalties are applied to the sale price after any discounts. If it's a third party referral, the referrer gets 15% of that sale price. Zazzle covers most of that referral cost. Designers chip in 20% of their royalty on that sale.

Here's an example, which assumes a list price of $10 US, and a royalty of 10%, to keep things simple:

Sale with no discount, no referral: You make $1

Sale with 25% discount, no referral: You make $0.75

Sale with no discount, referred by third party: You make $0.80

Sale with 25% discount, referred by third party: You make $0.60

Sale with no discount, self-referred: You make $2.30 ($0.80 + $1.50)

Sale with 25% discount, self-referred: You make $1.73 ($0.60 + $1.125, rounded up)

This is based on the assumption that even on self-referred sales, you still pay the 20% carveout on the royalty.

If I'm wrong, someone who knows better please provide a correction.


Ok, so based on your formula;

$32.95 retail- 15% discount= $27.84
Royalty rate= 14.5%; $27.84 x 14.5%= $4.04
$4.04- %20% to third party referrer= $3.23
Actually paid $2.85...where did the other $0.38 go?
Posted: Sunday, February 03, 2019 12:59:28 PM
SK DesignWorks wrote:
Fuzzy Felosarix wrote:
Royalties are applied to the sale price after any discounts. If it's a third party referral, the referrer gets 15% of that sale price. Zazzle covers most of that referral cost. Designers chip in 20% of their royalty on that sale.

Here's an example, which assumes a list price of $10 US, and a royalty of 10%, to keep things simple:

Sale with no discount, no referral: You make $1

Sale with 25% discount, no referral: You make $0.75

Sale with no discount, referred by third party: You make $0.80

Sale with 25% discount, referred by third party: You make $0.60

Sale with no discount, self-referred: You make $2.30 ($0.80 + $1.50)

Sale with 25% discount, self-referred: You make $1.73 ($0.60 + $1.125, rounded up)

This is based on the assumption that even on self-referred sales, you still pay the 20% carveout on the royalty.

If I'm wrong, someone who knows better please provide a correction.


Ok, so based on your formula;

$32.95 retail- 15% discount= $27.84
Royalty rate= 14.5%; $27.84 x 14.5%= $4.04
$4.04- %20% to third party referrer= $3.23
Actually paid $2.85...where did the other $0.38 go?

Go back and look at what your royalty history shows. Even though the sale price was $27.84 total, it looks like $5 of that was on an upcharge. As the screenshot shows, you only make 5% on any upcharge amount.

$22.84 x 14.5% = $3.31 - $0.66 for the referral carveout = $2.65

$5 x 5% = $0.25 - $0.05 for the referral carveout = $0.20

Finally, $2.65 + $0.20 = $2.85, which matches your royalty.

ETA: Reposting this quote from another thread:

Quote:
- Name-Your-Royalty Calculation: Your Royalty Rate multiplied by Net Sales of Products incorporating your Design. "Net Sales" means the purchase price received by Zazzle minus amounts charged for (i) shipping and handling, packaging and insurance; (ii) sales or similar taxes; (iii) refunds, credits, and reversals; (iv) the face value of the postage (if the revenue is for Zazzle Custom Stamps); (v) upcharges for special sizes, embellishments, and other add-on charges ("Upcharges").
- Upcharges Royalty Calculation: Zazzle will also pay you a Royalty at the Standard Royalty Rate for Upcharges received by Zazzle based on orders for Products incorporating your Design, subject to deductions for returns, credits, and reversals.
- Referral Carveout: If the sale of your Product is to a Customer referred from graphical or text links displayed on products, promotions, emails and/or web properties other than the Site, Zazzle will retain a referral carveout fee of twenty percent (20%) of your Gross Royalty* for the Product.
- Transaction Fee Carveout: If you select a Royalty Rate that is twice or greater than the Standard Royalty Rate, Zazzle will retain a transaction fee of five percent (5%) of your Gross Royalty* for sales of Products that are subject to the higher rate ("Transaction Fee").


The "Standard Royalty Rate" referred to in the Upcharge section is 5%.

And if you happen to have a royalty at 15% or above you pay the Transaction Fee Carveout. I think the quoted section above is somewhat outdated, but it will give you the general idea of what you need to take into consideration.
Posted: Sunday, February 03, 2019 3:11:10 PM
Fuzzy Felosarix wrote:
SK DesignWorks wrote:
Fuzzy Felosarix wrote:
Royalties are applied to the sale price after any discounts. If it's a third party referral, the referrer gets 15% of that sale price. Zazzle covers most of that referral cost. Designers chip in 20% of their royalty on that sale.

Here's an example, which assumes a list price of $10 US, and a royalty of 10%, to keep things simple:

Sale with no discount, no referral: You make $1

Sale with 25% discount, no referral: You make $0.75

Sale with no discount, referred by third party: You make $0.80

Sale with 25% discount, referred by third party: You make $0.60

Sale with no discount, self-referred: You make $2.30 ($0.80 + $1.50)

Sale with 25% discount, self-referred: You make $1.73 ($0.60 + $1.125, rounded up)

This is based on the assumption that even on self-referred sales, you still pay the 20% carveout on the royalty.

If I'm wrong, someone who knows better please provide a correction.


Ok, so based on your formula;

$32.95 retail- 15% discount= $27.84
Royalty rate= 14.5%; $27.84 x 14.5%= $4.04
$4.04- %20% to third party referrer= $3.23
Actually paid $2.85...where did the other $0.38 go?

Go back and look at what your royalty history shows. Even though the sale price was $27.84 total, it looks like $5 of that was on an upcharge. As the screenshot shows, you only make 5% on any upcharge amount.

$22.84 x 14.5% = $3.31 - $0.66 for the referral carveout = $2.65

$5 x 5% = $0.25 - $0.05 for the referral carveout = $0.20

Finally, $2.65 + $0.20 = $2.85, which matches your royalty.

ETA: Reposting this quote from another thread:

Quote:
- Name-Your-Royalty Calculation: Your Royalty Rate multiplied by Net Sales of Products incorporating your Design. "Net Sales" means the purchase price received by Zazzle minus amounts charged for (i) shipping and handling, packaging and insurance; (ii) sales or similar taxes; (iii) refunds, credits, and reversals; (iv) the face value of the postage (if the revenue is for Zazzle Custom Stamps); (v) upcharges for special sizes, embellishments, and other add-on charges ("Upcharges").
- Upcharges Royalty Calculation: Zazzle will also pay you a Royalty at the Standard Royalty Rate for Upcharges received by Zazzle based on orders for Products incorporating your Design, subject to deductions for returns, credits, and reversals.
- Referral Carveout: If the sale of your Product is to a Customer referred from graphical or text links displayed on products, promotions, emails and/or web properties other than the Site, Zazzle will retain a referral carveout fee of twenty percent (20%) of your Gross Royalty* for the Product.
- Transaction Fee Carveout: If you select a Royalty Rate that is twice or greater than the Standard Royalty Rate, Zazzle will retain a transaction fee of five percent (5%) of your Gross Royalty* for sales of Products that are subject to the higher rate ("Transaction Fee").


The "Standard Royalty Rate" referred to in the Upcharge section is 5%.

And if you happen to have a royalty at 15% or above you pay the Transaction Fee Carveout. I think the quoted section above is somewhat outdated, but it will give you the general idea of what you need to take into consideration.


Wow, thank you. My head hurts now. LOL!Love
Posted: Sunday, February 03, 2019 4:48:40 PM
You did understand that the 20% referral carve-out comes off of your final royalty and not off of the full product sale price, I hope?

This was something I had a hard time getting too when I was new but after many discussions it finally sank into my thick head.
Laughing

Back then I wanted to know why 10% wasn't 10%... and my head spun a few times also.

Ps. the only math I like is Fractals! Stick out tongue
Posted: Sunday, February 03, 2019 8:21:45 PM
PS:

REGARDLESS of the retail and sale price of the object they purchased, the ONLY number you need to pay attention to is the Subtotal.

You do not know if your customer:

Has a coupon
Has a credit
Has a multiple item order that qualifies them for a discount

never try to figure out the math on HOW a customer was able to pay a dollar for a widget, just figure out the math on the dollar you earned.
Posted: Monday, February 04, 2019 8:50:59 AM
Shelli Fitzpatrick wrote:
You did understand that the 20% referral carve-out comes off of your final royalty and not off of the full product sale price, I hope?

This was something I had a hard time getting too when I was new but after many discussions it finally sank into my thick head.
Laughing

Back then I wanted to know why 10% wasn't 10%... and my head spun a few times also.

Ps. the only math I like is Fractals! Stick out tongue


I think I had that part right. Lol!
Posted: Monday, February 04, 2019 8:52:14 AM
RGebbiePhoto wrote:
PS:

REGARDLESS of the retail and sale price of the object they purchased, the ONLY number you need to pay attention to is the Subtotal.

You do not know if your customer:

Has a coupon
Has a credit
Has a multiple item order that qualifies them for a discount

never try to figure out the math on HOW a customer was able to pay a dollar for a widget, just figure out the math on the dollar you earned.


Thank you!
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