Let’s Take a Closer Look at Royalties

By • 5 years ago with 3 replies already

Designing and promoting your products is hard work and we appreciate all of the talented Designers and Associates for their efforts. Whether you make one, ten, a hundred or a thousand sales, it’s important to understand the breakdown of your earnings. Today, let’s take a closer look at four examples of ordered products and how certain situations can affect your royalties. We’ll also look at what benefits each of those examples can bring.

International orders.

Localizing your designs for international domains is a great way to expand your business. Not only will you reach a larger market but you can also learn a lot about other cultures. We recommend that you localize your designs for as many domains as you can by translating the copy and catering to international trends. Check out this blog post on tips for selling on global domains.

When it comes to royalties, if you have an order that was placed from a domain that does not use the same currency as the currency you are paid with, then you will see the amount paid by the customer in the Royalty column of your Royalty History report and the converted amount (converted to your currency) in the most right-hand column shown as Royalty (USD) in the example below.

Royalty History report pointing out currency screenshot

Please note that currency conversion rates may fluctuate on a daily basis, and credits earned and converted from a currency other than your currency are not final until payment is made.

Promoted products.

Zazzle Associates and Zazzle put a lot of effort in to promote the Zazzle marketplace by getting more customers to the site and increasing visibility for your products. The more people come to Zazzle, the higher the chance that someone will see your product and make a purchase.  If you are a Zazzle Designer and Associate and you share your own products on your website, social media or blog, you can earn a royalty and a referral on your sales.

If your sale is referred by yourself or someone else, there is a small fee (the referral carveout) associated with the sale. You can review the second column from the left of the Royalty by Product report or Royalty History report to see if the sale was referred.

Royalty History report pointing out referred sales screenshot

The referral carve out fee is 20% of your royalty and is retained only when the sale of your product is to a customer who was referred. If a customer is referred by self or a 3rd party, a referral carveout fee will be retained. If a customer is referred by none, the referral carveout is not retained.

User options.

Zazzle offers a variety of options for many products including different paper types and sizes for invitations or different colors and styles for t-shirts. Having these options allows the customer to upgrade the product to fit their personal preference. When a customer chooses a more expensive product type, the price of the product increases, and the increase is considered for a royalty payout at a fixed 5%.

You can review the Rate column, third column from the right, of the Royalty by Product report or Royalty History report to see if the order includes user options. You can also see if a product contains user options by looking for the the “^” symbol in the Product column.

Royalty History report pointing out user options screenshot

Royalty rates.

Stay competitive! Get in the mind of the average Zazzle customer.  Many of our most passionate consumers are women and their families who consider pricing when purchasing products. Not only can you reach a broader market if you decrease your royalty rate below 15%, but you also have a better chance for inclusion in our marketplace and website promotions. In addition, by lowering your royalty rate under 15%, you can avoid the transaction fee.

You can review the Rate column, third column from the right, of the Royalty by Product report or Royalty History report to see your royalty rate. The rate will be marked by a the “+” symbol if it is above 15%.

Royalty History report pointing out royalty rate screenshot

Now that you have all of the information about how different aspects of ordered products can affect your royalties, let’s try out calculating a royalty for an order.

Royalty Calculation Example 

Royalty History report order example

Looking at this order, it contains user options, it was referred by a third party and the royalty rate is higher than 15%.

Step 1: Calculate price per unit

$25.60 / 16 (quantity) = $1.60 price per unit for normal royalty

$4.00/16 (quantity) = $0.25 price per unit for user options royalty

Step 2: Calculate royalty per unit and add together

$1.60 * 18.7% = $0.30 royalty per unit for normal royalty

$0.25 * 5.0% = $0.01 royalty per unit for user options royalty

$0.30 + $0.01 = $0.31 total royalty per unit

Step 3: Subtract fees

$0.31 * 20% referral carveout fee = $0.06

$0.31 * 5% transaction fee for high royalty = $0.02

$0.31 – ($0.06 + $0.02) = $0.23

Step 4: Multiply royalty per unit (minus fees) by quantity

$0.23 net royalty per unit * 16 quantity = $3.68

We hoped you enjoyed this post and encourage you to take a look at our two about analyzing your royalties and referrals.

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3 thoughts on “Let’s Take a Closer Look at Royalties”

  1. This is the most convoluted system I’ve ever seen. I have tried to insert my figures and I can not make it agree with what is on my earnings page. This should really be simplified.

  2. I had a royalty fee cancelled with no explanation – the product continues to show as “sold”. Any way to find out what happened?

    1. Hi Les,

      Hope your day is going well.

      A royalty will show as cancelled because the order itself was cancelled or returned. Any cancelled royalties will be highlighted in pink in your royalty history. Since the product did sell, you will still see the product marked as ‘sold’ when you look at your products from within your account.

      Hope this helps!
      Elizabeth P.

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