Does Setting Higher Royalties for Digital Downloads incur the 20% transaction fee?

[WHS_Designs]

Does setting higher royalties for digital downloads trigger the 20% transaction fee (that applies to their non-digital download enabled products when royalties are set at 15% or higher)?

[KeegansCreation]

I certainly hope not since they minimum allowed royalty is 50%.

[ColsCreations]

The transaction fee is 5% but yes, looking at the screenshot @Cat  posted in the other thread, the fee applies. Here's how the $5.23 she earned breaks down:

[WHS_Designs]

whoops, my bad. 🙂 thanks for the detailed calculations, @ColsCreations !

[Cat]

Thanks for these calculations! The math has been making my head spin and I was totally confused because it seemed like Zazzle's base price kept going up the higher you set the royalty percentage. If they're tacking on 5% that solves the mystery!

[ColsCreations]

Did you notice the bottom number in that breakdown? Someone in the promoter program with a self-referred sale would actually net more than the customer is paying into Zazzle. Wow!

[Cat]

Wait... what?!? That can't be right.  I sincerely doubt they'll let that stand - how could they pay out more than they took in?

[ColsCreations]

Nevermind the $9.22 in the first screenshot as it is wrong. I somehow had C10 in there instead of C11. 😲 It's fixed now, however, yes, a Promoter with a self-referral on this would have earned $7.82 (5.23 net royalty + 2.59 referral) so still $0.42 more than the customer pays.

[Cat]

Very interesting! I still don't think Zazzle's gonna let that stand! 

[jennifer22]

I had a self-referral digital sale today and I netted 4.16+2.09 (6.25) on a 5.98 sale.

[Cat]

@ColsCreations Since you seem to understand this stuff better than anybody else, I figured I'd ask you first. I'm hopelessly confused trying to understand these royalty calculations, and starting to think there's an error with the royalty calculator on the post product page. 

I created a new poster that I wanted to be available for download. First of all, the royalty defaulted to 92.89% which is the suggested royalty for invitations, not posters. But even when I change it to 94.25% (which is the suggested royalty for posters) the numbers don't add up. At 94.25% it said the price would be $14.80 and I would make $5.23. On the two that I've actually sold, I did indeed make $5.23, but the price was $7.40. Does this make ANY sense to you?

[ColsCreations]

 But even when I change it to 94.25% (which is the suggested royalty for posters) the numbers don't add up. At 94.25% it said the price would be $14.80 and I would make $5.23. On the two that I've actually sold, I did indeed make $5.23, but the price was $7.40. Does this make ANY sense to you?

Yes. They were 50% off when they sold. After the transaction fee and referral fee (shown in the pink section) were deducted, you earned a net royalty of $5.23 (shown in the green section)

At 94.25% it said the price would be $14.80 and I would make $5.23.

So the Z calculator was correctly taking into account the 5% transaction fee since the royalty rate was over 15%, but it also assumed a 20% carve-out even though a sale may or may not be referred, AND it calculated based on the 50% off sale, not the list price. 🙄  For those conditions, the $5.23 it showed you was correct, but it shouldn't be factoring anything in except the trans fee since that is a constant. This is precisely why I made my own calculator. The Z calculator is not consistent or clear in what it factors in on arriving at the "royalty you will earn" number is spits out.

You can go here
community.zazzle.com/t5/tools/earnings-calculator-no-math-required 
for an explanation of my Earnings Calculator and a link to download it from my website. (It's just a simple spreadsheet.)

@Cat 

[Cat]

Thank you so much! I'll take a look at the spreadsheet and hopefully things will become much clearer. But it sounds like the bottom line is that the calculator is not consistent (or at least it's not transparent) in terms of the underlying assumptions upon which it's basing the calculations.  

[Harmony]

it would be terribly unfair as the default minimum as determined by Zazzle is well above 50% -- and we are going to lose money as a result?