brendaj350
asked on
Please clarify the referral fee, so you are saying if I sell an item 65.00 and it has 15% refferral fee, do I include this price in my sell to offset
Item ex. 65.00, The seller has to pay 15% of 65.00 plus .99. Should I include the 15% in the cost of my item to offset the loss?
To add to Lucas's point, price elasticity testing will show you whether or not you can include those fees in your sales price. Generally, will find that you will hit more and more resistance as the price of an item becomes higher and higher. But, usually, you can get away with adding in 510 or 15% into a sales price without affecting it much. Depending on what products you're using, you'll notice that there are floors and ceilings to when people will buy an item. It's too cheap, they'll think that it's not real Laura for quality. If it's too expensive, they won't buy it at all. But, there's usually a large swath of prices that are available. Even if the other people in the market refused to sell their product for more than $65, you should still try and sell yours to include the affiliate fee. Then, see how many yourself. In the end, it's all a numbers game. And speaking of numbers here's the formula you need in order to include that 15% of your sales price. I'm assuming they are deducting the $.99 before they take the affiliate fee. So we have to reverse that math:
$65 / .85 + .99 = $77.46.
$65 / .85 + .99 = $77.46.
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Using your example:
$65.00 Sale Price
-$0.99 (Per transaction Fee?)
-$9.75 (15% referral fee to affiliate)
-$2.44 (25% of referral fee, paid to affiliate network)
--------------------------
$51.82 = value of sale after fees are deducted
Whether or not you lift your price to offset costs will really depend on how it will effect your ability to sell it.