How does RoyaltyZone calculate royalties for bundled products?

RoyaltyZone provides an easy method to allocate royalties in situations where multiple properties are used on a SKU, or where a licensed item is combined in a set for sale with non-licensed items. These are considered "Bundled Products". Royalties on bundled products are calculated as A x B x C, where A is the royalty rate assigned to each property on the agreement, B is the Bundle Factor (the % assigned to each property on a SKU), and C is the sales amount on that SKU. When a SKU has multiple properties and an agreement has multiple rates assigned by property, RoyaltyZone will distribute the royalties appropriately. Calculations are based on the reporting rule setup and royalty-rate-to-property association set up on each Agreement. For more information on reporting rule setups, see the help document "How do I create and edit royalty reporting rules?"

In this example, the royalty reporting rule is set up so that RoyaltyZone will calculate each property on a SKU as a separate transaction, but keep the quantity and net sales as a whole

Royalty Owed = A * B * C, where A is the royalty rate assigned to each property in the agreement

B is the Bundle Factor (the percentage assigned to each property on a SKU)

and C is the sales amount entered on the royalty report

Note: This reporting rule does not allow deductions. If your rule set-up allows deductions, C will equal the Net Sales

RoyaltyZone calculates 50% of the sale as Buddy at 10% of Net Sales, and 50% of the sale as Rocky at 15% of Net Sales

A x B x C = Royalty amount
10% x 50% x 100 = 5.00
15% x 50% x 100 = 7.50
Total Royalty = 12.50

Click "Multiple" to view an exploded view of the calculation

In the Trends & Analysis charts and exports, for Bundled Product sales, the Quantity Sold and Net Sales amount will either display full value, or display the value prorated by the Bundle Factor. This is determined by the royalty reporting rule.

Note: In this example, the royalty reporting rule is configured to show the full value for quantity sold and Net Sales

In another example, this royalty reporting rule states that RoyaltyZone will calculate each property on a SKU as a separate transaction, and show quantities and net sales using the bundle factor percentage

The same Sales Transaction is used as in the first example.

Net Sales by Property show $50.00 for each Property using the bundle factor of 50% per Property

Qty by Property show 5 for each Propety using the Bundle Factor of 50% per Property

In this example, we have a SKU sold as a set of 4 items, with only one item in the set being licensed (the other 3 items are non-licensed). The bundled percentage is 25%.

The Sales Transaction entered shows quantity sold of 10 and Gross Sales of $100.00

Using the same calculation as before, A x B x C, royalties are calculated at $2.50

10% x 25% x 100 = 2.50

Net sales show as 25% of the total net sales for the SKU

Quantity shows as 25% of the total quantity for the SKU