I believe royalty figured out incorrectly on recent sales

[WBartworks]

Dear Moderator,

I posted the following in another section already but I think that discussion was closed so no one will probably look at it.  So I am posting it here again.I believe Zazzle made a mistake when calculating my royalty yesterday.  It took 5% off the subtotal and then gave me 20% off the reduced amount.  I checked my history and learned that this is not how Zazzle calculated my royalty before whenever my set royalty was above 14.9%.

Yesterday I made a sale and I was puzzled why I only received $5.88 royalty instead of $6.27. 
The original price is $39.20.
Taking 15% discount off the list price leaves $33.32.  So that is what the customer paid.
Since my product got referred, Zazzle took of another 5% off the total of $33.32 ($33.32 times 5% = $1.67) which brings you to the subtotal of $31.36 as is shown in my royalty history. 

I assumed Zazzle would multiply $31.36 by 25% (my set royalty) as it did before, and then take the 5% out off the resulting royalty amount, because I set my royalty over 14.9%.  But no, Zazzle took off 5% of the subtotal which lowers the subtotal amount to $29.79.  Zazzle then multiplies $29.79 by 20% and that's how I wind up with only getting $5.88. 

However, had Zazzle multiplied the subtotal of $31.36 by 25% ($31.36 times 25% equals $7.84) and then took the 5% out of $7.84, I would have received $6.27 royalty.

BTW:  Since $5.88 equals only 18.75% off the subtotal amount of $31.36, Zazzle actually deducted 6.25% from my 25% royalty and not just 5%.

[WBartworks]

Here is a screen shot of the sale I mentioned in my previous discussion:

[Emma]

Hi @WBartworks , 

I have re-run these calculations and the Royalty received is correct here. The product subtotal (minus sales tax) is as shown, $31.36. Your subsequent 25% royalty would then have come to $7.84. As this was a 3rd party referral, the 20% carveout meant a deduction of $1.57, and the 5% transaction fee (for the Royalty Percentage being above 15%) resulted in the further 5% reduction of $0.39. Total deductions coming to $1.96. 

Per the above, the expected $7.84 - $1.96 in deductions leaves the Royalty amounting to $5.88, as is shown in your Royalty History. 

I hope this helps 🙂 

- Emma 🌻

[WBartworks]

Dear Emma,  
I had already figured in the referral deduction which I thought was 5% or $1.67.  You figured it to be $1.57 (which is actually less).  I also had calculated in the 5% transaction fee.  My issue is with Zazzle first taking the 5% transaction fee out of the subtotal after the customer discount and referral fee is already deducted, and then using the end result to figure out my 20% royalty. This, I think, is not correct.  I think the 20% should have been calculated on the subtotal before Zazzle taking the 5% transaction fee off the subtotal.

[ColsCreations]

Your gross royalty on this sale was $7.84. Both deductions are a percentage of that gross. So 5% of $7.84 and 20% of $7.84. The total of these deductions is then subtracted from that gross of $7.84 to arrive at your net royalty, in this case $5.88.

Congrats on your sale! Just think, out of the thousands of golf ball designs in the MP, they chose YOURS. 🙂

@WBartworks 

[ColsCreations]

And here is with the orig product price and the sale discount, which was 20% not 15% off:

We don't ever know what discount a customer might have received so assuming a discount % and then doing math from there leads to confusion. The discount they got isn't important after the fact. What's important is the subtotal they paid and the royalty% applied to that.  When setting your royalty, it's important to consider the common discounts that might be applied (the standard 15%, the 20% for giving an email addy, the 50% so often applied to this that or the other product ....) because those regular discounts of course affect our end earning for that product so you may want to set your royalty higher to account for them. But after the sale, when looking at our earnings report - the discount they used doesn't matter in the math. Everything is calculated based on the actual subtotal they paid. If one is really curious about why they only paid X instead of Y you can reverse-math it to figure out the discount they got but again it doesn't really matter - they paid what they paid and that is what we get paid on. 😉

@WBartworks 

[WBartworks]

Dear Emma and ColsCreations,

When I bring up the product it shows the discount is 15% not 20%.  Therefore, I assumed a referral fee of 5% was already deducted when seeing the subtotal of $31.36.  However, I guess the customer must have received another 5% discount for whatever reason and the referral fee got deducted from $31.36.  So then the $5.88 royalty is correct.  Well at least I know how Zazzle calculates its royalty now.