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How are shares determined when there is a distribution?


Liana Halostar
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When there is a distribution, how does LL determine the commission and final share for the separate recipients?

What I’m trying to do is end up with 20% of the sale price after both distribution and commission have been taken.

EXAMPLE:
Sale Price (fixed value):                                      400
LL Commission (fixed percentage):                      20
Store Owner Share (Must be 20% of sale price): 80
Distribution Share (Whatever is left):                 300

EXAMPLE:
Sale Price (fixed value):                                      265
LL Commission (fixed percentage):                      13
Store Owner Share (Must be 20% of sale price): 51
Distribution Share (Whatever is left):                  201

In other words, how do I set the distribution so that the store owner share is the desired amount? I tried calculating it with a straightforward 5% cut off each share but the numbers don’t add up to the values that LL actually takes.

I know I can’t nail it exactly because LL requires the distribution to be a whole percentage (grrr). But what is their formula so I can at least get close to the desired amounts without changing hundreds of items and waiting for them to sell at the wrong distribution?

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Since you have to enter the split as a percentage you need to find the factor for your pecentage after commission.

Sale price after commission 100 - 5% = 95 

25% of Sale price after commission = 95 x 25% = 23.75

Since you have to use a whole number as the percentage, I'd round that to 24% and use that. 

It is probably the rounding that is throwing you off.  Depending on the listed price the commision amount might have to be rounded up or down, then the result of applying the 25% might need to be rounded too.  However if you enter the percentage of your cut as 24% you will get as close as possible.

Example:

2 step calculation

389 - 5% = 369.55 - which would round to 370

370  x 25% = 92.5 - round to 93

1 step calculation using 24% of list price as the factor:

389 - 24% = 93.36- round to 93

 

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Thanks Amethyst

LL was rounding some numbers up when they should have gone down, or down when they should have gone up. And some numbers were getting rounded by more than L$1. I guess it was the double rounding that was causing this and that's what was throwing me since there doesn't seem to be a logical pattern.

At any rate, your explanation does help clarify things. I'll apply your formula and see what happens.

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OK, actually this doesn't work.

Your formula gives me 25% of the amount after the commission. I need 25% of the full sale price.

Your example, for example, that uses 389 as the sale price, gives me 93, which is 25% of 95%. But what I would need in that example is 97, which is 25% of 100%.

In other words, the person receiving the distribution needs to pay the full %5 commission. Since LL takes an equal portion of the commission from each recipient, I have to figure out how to factor that into the equation.


[NOTE: I edited the original post and changed the desired owner share from 25% to 20% but the question is otherwise the same and the formula should be valid for any percentage]

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Desired % / 0.95 

 

Split is calculated on the nett price after MP commission is taken out, ie "Sale price x 0.95", therefore to get back to the original price, you divide instead of multiply.

 

To get 25% after MP commission, enter 25

To get 25% of full price, enter 25/0.95 ( = 26.32)

 

Or just save yourself the trouble and make a command decision to apply the split after MP cut and leave it at 25 :)

 

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Sorry I misunderstood. 

The factor for 25 percent of the list price taking into account the commission is  26.32%. or 26% since you must use a whole number.  This is going to result in your share varying due to the rounding.  Sometimes it will be dead on, other times it may be lower depending on the list price. Using 27% gives you more than your share.

Example List Price 300

25% of 300 = 75 L's

300 - 5% = 285

285 X 26% = 74.1 or 74L's after rounding

Example List Price 100

25% of 100 = 25 L's

100 - 5% = 95

95 X 26% = 24.7 or  25L's after rounding

 

 

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I'm pretty sure I understand how to do this now. At least the numbers I arrive at are matching the results for confirmed sales. But to achieve that, I had to modify your instructions slightly.

In your examples, you follow proper rounding procedure. But it looks like LL always rounds down regardless of the fractional value. So 43.89 would become 43, not 44. When I rounded up where appropriate, I got different results than shown on actual sales.

Here’s the formula that LL appears to use:
(Always round fractional values down.)

1. Subtract the 5% commission from the list price (LP) to get the adjusted list price (ALP).

2. Calculate the distribution at the desired rate to get the distribution share (DS).

3. Subtract the DS from the ALP to get the store owner share (OS).

I still can't do the algebra to find a formula that will give me any desired OS for a given LP. But knowing LL's formula and a little trial & error gets me there. Now to apply it and hope I'm right.

Thanks for the insights.

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To get the factor for any percentage for any permcentage, just divide the percent by 95%.  For instance if the dirstribution share is 32%, you would need to divide 32 by 95, which equals 33.684%, which you would then round off.  In this example to get the owner's share factor would be

100% - 32% = 68%    68% / 95% = 71.578%

 

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Thanks Zanara. I didn’t understand that at the time but with all the info in this thread, it makes sense now. I can now write the whole process for anybody else who may have the same problem. And thanks again, Amethyst.

Calculate Distribution Percentage For Any List Price To Obtain Desired Owner Share

PROCEDURE TO CALCULATE DISTRIBUTION PERCENTAGE

  1. DOSP / 0.95 = AOSP
  2. 100 - AOSP = DP


WHERE

  • DOSP is the Desired Store Owner Share (as a percentage)
  • AOSP is the Actual Store Owner Share (as a percentage)
  • DP is the Distribution Percentage


EXAMPLE
List Price = L$800. Desired share = L$160 (20%)

  1. 20 / 0.95 = 21%
  2. 100% - 21% = 79%


LL PROCEDURE FOR HANDLING DISTRIBUTIONS

  1. LP - C = ALP
  2. ALP x DP = DS
  3. ALP - DS = OS

* All fractional values are rounded down (so 43.86 becomes 43, not 44).

WHERE

  • LP is the Product List Price
  • C is the 5% LL Commission
  • ALP is the Adjusted List Price (LP less C)
  • DP is the Distribution Percentage
  • DS is the Distribution Share (in L$, given to store owner’s partner)
  • OS is the Store Owner Share (in L$)


EXAMPLE
LP = 800. DP (calculated above) = 79%

  1. 800 - 40 = 760
  2. 760 x 0.79 = L$600
  3. 760 - 600 = 160

 

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