Royalty Calculation

[Tutuzdad]

If an item sells for $30.15 and my royalty rate is set at 14.9% why did I earn $3.59 and not $4.49? By my calculations $3.59 is only 11.9% of the product's sales price.

[Manda]

I think you have to check if there was a discount on that product.

[Tutuzdad]

Apparently there was. The regular price is $40.20. 14.9% of that would have been $5.98.

[PacifierCity]

@Tutuzdad 

3rd party referral most likely.  You pay 20% of your royalty to them per the user agreement.

PC

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[Tutuzdad · Accepted solution]

It was a 3rd party deal so yeah, that would explain it. Thank you. 

[shellifitz]

It's called Zazzle math... 

[milkfish]

new here in community and this post will help me understand my future earnings. kudos

[Lais]

If your royalty is R and the product was sold by P, and it was referred by a 3rd party, you will get
0,80 R x P .

[Dave_G]

I came here with the same question as the O.P.  Now I have more questions than when I started.

The following is an excerpt from the royaltyHistory.csv spreadsheet provided by Zazzle.

I'm not seeing how these numbers add up. The royalties seem too low by my calculations. The SUBTOTAL x ROYALTY RATE does not equal the listed ROYALTY. What am I missing?

Second, the first row says it was referred by a third party. Taking 20% from the subtotal still does not seem to reconcile the royalty number.

Third, I'm new at selling through Zazzle. What does it mean to be "referred by a third party"? and, how can I see who that was?

Fourth, how do discounts affect these numbers? The first one was purchased during a 25% off sale. The second was 15% off, I believe. Do the subtotal numbers already reflect the discounted sale price?

[ColsCreations]

What does it mean to be "referred by a third party"?

It means the customer came in through a link with someone's referral ID attached to it. This could be another designer, an intentional affiliate, or Zazzle themself. Whoever gets the referral credit earns a flat 15% of whatever the customer's order total was. On your end, 20% of your gross royalty (note it's gross royalty, not 20% of order total) is deducted from Third-Party sales to help off-set the payment to the referrer.

and, how can I see who that was?

You can't.

Do the subtotal numbers already reflect the discounted sale price?

Yes. The amount shown on the royalty report is the amount the customer actually paid after any discounts they received and that is the only amount that matters as that is what your royalty is based on - total paid, not list-price.

The numbers you have posted are spot-on for 'Referrer=None' and "Third-Party" sales:

 

 See this post for details about the above breakdowns:
community.zazzle.com/t5/tools/earnings-calculator-no-math-required 

@Dave_G 

[Dave_G]

@ColsCreations, thank you for such a thorough explanation! I think I have a much better understanding of how royalties are calculated now.

Your spreadsheet is both very useful and revealing, and I appreciate the link to the thread with the link to download it. I was not aware of the transaction and referral fees. (The Zazzle help files regarding royalties seem to be missing such details.)

NOTE: I downloaded your spreadsheet and I think I noticed one possible inconsistency. When I entered 15% royalty on both the right and left blocks, the left block listed $0.32 for the "5% transaction fee for royalty rates of 15% or higher". The right block listed $0.00. When 15.01% is entered for a royalty on the right block, the transaction fee shows $0.32. So it appears the threshold for the 5% fee is different for each side. (14.99% to15% on the left and 15% to 15.01% on the right) Zazzle's wording implies the fee kicks in "above" 15%, but you have demonstrated with the above examples that the fee actually kicks in "at" 15% and above.

UPDATE: I unlocked your spreadsheet and found that the formulas for the transaction fee are indeed different.

Left side: =IF(C6>=15%,C7*5%,"$0.00")

Right side: =IF(H6>=15.001%,H7*5%,"$0.00")

[ColsCreations]

You are correct. When I first made the sheet, after extensive testing, 15 wasn't triggering the transaction fee, it had to be over 15 thus the 15.001 in the formula. At some later point, it became evident that exactly 15 was triggering it so I changed the formula to just 15. Then sometime later I added the second block for comparing two things and must have copied it from the orig un-fixed one. I noticed the error last night when checking your numbers and fixed it but forgot about re-uploading the corrected version. The corrected version is now available at the same link.

http://www.colscreations.com/SharedFiles/EarningsCalc.xlsx

@Dave_G 

[Dave_G]

Thanks for the update. and, I see you've posted the updated version on the other link as well. 👍

[nmwatt]

@Dave_G - thanks for asking this question! I'm sorting my way through my first sales and wow, so confusing!!! Thanks also to @ColsCreations for that amazing excel sheet. It is priceless!!