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Are you getting an extra 20% commission? The consequences of VAT and Shipping by Matthew Wood

Posted in Affiliate Marketing on 19/02/2008 at 1:46pm

 

Having just ordered a few warhol pictures for the office, I thought I would check the source code to check that the transaction had processed correctly with the affiliate network.

Here is the output.

<img src="https://tbs.tradedoubler.com/report?organization=1165557&event=73083&

orderNumber=A0036622286&orderValue=95.29&currency=GBP&checksum=*&reportInfo=*">

The important part to take from the above TradeDoubler code is the order value of 95.29. This is the net value, i.e before VAT and Shipping has been added, and thus is the commisionable amount for the affiliate in this instance.

There is therefore an obvious benefit to affiliates to partner with those merchants who pay on a gross basis, however I'm not sure if the gross paying merchants actually shout about it enough or whether affiliates are even aware.

Item Subtotal £ 119.11
Coupon/Discount -£ 23.82
Shipping £ 20.39
 
Total before VAT £ 115.68
VAT [product & shipping combined] £ 20.24

Order Total £ 135.93

In the quest for ongoing transparency it would be great if merchants and their partner networks clearly stated whether stated merchant commission include VAT and / or Shipping, if it did in my example we would be getting commission on the gross value of £135.93 and not the net £95.

 

Brings me back to this thread nearly five years ago.

 

 

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4 Comments

  • Comment added by ritetime on 19/02/2008 18:57:34
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    The article is very eye-opening.Thanks for the enlightment
  • Comment added by ritetime on 19/02/2008 18:57:35
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    The article is very eye-opening.Thanks for the enlightment
  • Comment added by AffiliateMarketingUK on 19/03/2008 12:07:49
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    Are there really merchants out there who pay commission on VAT and Delivery?

    Why would someone do that when these are added costs?

    Confused….
  • Comment added by mateypeeps on 10/04/2008 23:20:44
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    I would be happy with the £95 let alone £135 base for commission.

    Then again I am small-fry.

    Which means my views can be taken with a pinch of sodium chloride.

    Being that I feel the merchant is selling "article" xyz, and the posting and packing of same is incidental.

    He is paying you for the sale of xyz, not asking you to sell his packing stuff up and putting stamps on it, and paying the VAT man his pound of flesh.

    If the merchant was to pretend to pay on gross, then all they need to do is offer less percent commission, and the total cost to them is the same, and you still only get the same commission at the end of the day.

    So, be grateful for x% of £95 instead of (95/135)% of x% of £135 which is the same amount of dosh. Assuming the merchant does not want to pay more than that absolute amount whichever way they, or you, chose to describe its calculation.

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Article written by Matthew Wood

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