Can Somebody Help Me Do the Math?

[Jadendreamer13]

I want to globally change my royalty amount so that I will actually receive a 10% royalty after third party sellers and Zazzle take their share of my profit.

Math was never my best subject. So what should I set my royalty at to achieve my goal?

Thanks so much!

[Cat]

Hmmm... well, I suck at math too, but I think it's a somewhat complicated question because as you raise your royalty the price goes up too. So earning the same amount as you earned before is not the same thing as earning 10% on a higher price. Am I making sense? 

[Jadendreamer13]

Yes, that makes sense. I want to make my best educated guess. Hopefully, folks who are more mathematically inclined than I am can offer me additional insight. My math skills are rudimentary. Thanks, Cat. ❤️ 

[CLC]

Hi....you need to basically double your royalty to make close to the same as you did before, you still won't make quite as much but when you get a None sale it will make up for it.

[Cat]

OK, well I asked my math guru. I was hoping there would be a simple equation that we could plug in our old percentage and have it pop out a number, but it ended up being too complicated for that. The long & short of it is that if you want to get the same AMOUNT for a 3rd party sale that you would have gotten before on a "none" (if you were at 10% before) you need to set your royalty to 18.99%. 

The way to calculate it is to use Zazzle's royalty calculator. Plug in your old percentage (in your case 10%) and write down the amount of royalty it says you'll get. Then adjust the percentage until it equals double that amount - it will subtract the excess royalty fee as part of its calculation so you don't have to worry about that. It's best to do this on a fairly pricy item because on cheaper things you get rounding errors. You can start by doubling it - that will give you more than the amount you were getting before, but you can keep adjusting from there.

I wish there was an easier method - and I'm sure there is, but it's not a simple algebraic equation because of the condition (the excess royalty fee) - at least we couldn't figure one. If somebody else has a simple equation I'd LOVE to know what it is.

[Jadendreamer13]

Thank you, again, Cat. And thank your friend. 🙂

[Cat]

You know what... hold the phone, there is something else to consider. I was basing this on my own sales which are all in the wedding department, so all 3rd party sales have a 50% marketing fee. If you're selling clothing, or accessories, or anything not in the weddings, invitations or stationery departments, then the marketing fee will vary between 35-45 percent. This means that it's not possible to come up with a single percentage that will give you the same payout on a 3rd party sale as you got for an unreferred sale at your old 10% royalty. 

For Clothing (35% marketing fee) you need to set it to 15.33%
For the 40% departments you need to set it to 16.36%
For the 45% departments you need to set it to 17.61%
And for Weddings, Invitations & Stationery (50% marketing fee) you need to set it to 18.99%

You can find the marketing fee percentage for each department here: Zazzle Ambassador and Creator Royalties and Referrals – Zazzle Help Center

Sorry for the confusion!

[Jadendreamer13]

That’s super helpful, Cat. Would it be prudent (and easier) for me to set my royalty rate globally to 20 percent?

[Cat]

That's your call. You might want to play with the royalty calculator a bit and see how it will impact the price the customer pays. Plus, I have no idea how (or if) royalty settings impact marketplace visibility, so that's something to consider as well.

[NigelSutherland]

Clearly everyone is going to have to increase their commissions in order to claw back what the Zazzle changes are costing in terms of lost revenue. This in turn is going to make products in the Zazzle marketplace more expensive to customers. I fear this might turn potential buyers away from Zazzle... ☹️