What is a commission?

In a multi-vendor marketplace, the merchant earns a commission for every product sold on the website. Per the merchant’s policy, the balance of money is remitted to the vendor once the order is fulfilled.

Commissions Rules and Settings

Commissions on ShipTurtle can be set up at 5 levels, as below.

1. Global Commission: This is the default commission applicable for each product on the website. You can configure this by going to Multi vendor settings > Commission.
2. Vendor Commission: This applies to all products sold by a particular vendor. You can configure this by going to Manage vendors > Edit vendor.
3. Category Commission: This applies to all products belonging to a particular category. You can configure this by going to Product > Categories.
4. Product Commission: This applies to a single product only. You can configure this by going to Manage Products > Edit Product.
5. Channel Commission (discussed in more detail below): This applies to each product using the cost value maintained in the product data of your channel/shop. Using this will override all the above options for each product/category/vendor.

The order of precedence of commissions is as follows:  

Global < Vendor < Category < Product < Channel Commission

Example: If the global commission is set at 20%, the Vendor A commission is set at 25%, but a particular product’s commission is set at 10%, the final commission applicable will be 10% since it overrides all other commissions.

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Using Shopify Cost price (channel commission)

In Shopify, each product variant has a field called "cost price". We can use this to set the payout applicable to each product.

This is similar to setting the “Product Commission” level for each product, the difference being that it uses the variant's "cost value" from your store.

For example, if the “price” for Product A is $100 and the “cost per item” is $ 70, ShipTurtle will calculate the merchant commission as (1-cost price)/price = 30%.

Note: When using this facility, each product’s commission will be calculated using Shopify product data.
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To enable: Tick the option Commission settings – “Set commission automatically using Shopify Cost Per item”
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Variable vs Fixed commissions

There are three ways of calculating commission:

1. Variable % – If a Product’s Price is $ 100 and the Commission is set with only Variable 30%, the merchant will make a commission of $60 (30% * $200) for 2 products sold.
3. Fixed per unit – If a Product’s Price is $ 100 and the Commission is set with only Fixed per unit $5, the merchant will make a commission of $10 (2 * $5) for 2 products sold.
5. A mix of Variable % and Fixed: If a product’s price is $100 and the commission is set with both variable 30% and fixed per unit $5, the merchant will make a commission of $70 (2 * $5 + 30% * $200) for 2 products sold.

Handling Discounts and Shipping

Configure the following settings in ShipTurtle –

1. Commission calculated on full price / discounted price: You can decide whether the commission will be calculated based on the original product price or the discounted price. It can be configured at both the global and vendor levels. Example: Continuing the above example, suppose a discount of $10 per unit is applied. If “full price," the commission will be the same as $70 or above. But if “discounted price," the commission will be $64 (2 * $5 + 30% * $180) for 2 products sold.
3. Discount % shared by vendor: You can set what percentage of the discount given will be shared by the vendor. This can be configured at both the Global and Vendor level. Example: Continuing the above example, if a discount of $10 is applied and the discount percentage sharing is 60%, the merchant will bear $6 and the vendor will bear $4 per unit sold.
5. Commission calculated on shipping: You can configure how the shipping value charged to the customer is to be divided between the merchant and the vendor. It can be split in the same proportion as the Product Commission or be set to a fixed percentage. Example: If all shipping charges are to be retained by the merchant, select the dropdown “Fixed%” and set a value of 100%. If all Shipping charges are to be passed to the vendor, select the dropdown “Fixed %” and set a value of 0%
7. Commission calculated inclusive or exclusive of tax: You can configure whether to charge a variable commission percentage on the price inclusive or exclusive of tax. Example: Continuing the above example, suppose the product price is $100, inclusive of $20 tax. In this case, if the commission is calculated as “exclusive of tax," then the merchant commission will be $58 (2 * $5 + 30% * $160) for 2 products sold.
9. Service tax levied on commission: The merchant can specify a service tax on the final commission as per the local tax rules. Set it to 0 if not applicable.

We realize this can get a little confusing. Once you understand the basics, just write to us at team@shipturtle.com and let us know what your commission structure looks like. We can help guide you personally through what settings are correct for you.

Managing Payments

When a new order comes into Shipturtle, its Line items and their Commission calculation are reflected on the “Commissions” page. You can see detailed calculations by clicking on the pop-ups for “Merchant earning” and “Vendor payout”.In some cases, you may need to change the payout due to some exceptions. Use the “Adjustment” column to do so. Mark line items as “Paid” at a row level or using Bulk selection.

Recalculating Commission Invoices

In some cases, the Commission calculation may be wrong due to changes in margins or inadvertent errors in values entered by you while setting it up. Don’t worry! Simply make the changes for the relevant products, select the relevant Orders on the Commission page, and go to “Actions -> Recalculate Commission”.

Recalculation can be done only for Orders which are neither Invoiced nor Paid. Cancel the Invoice/Payment status first if you want to recalculate the value

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