From: Ron Lawrence [mailto:ron@pubassist.com]
Sent: Thursday, November 03, 2011 8:18 AM
To: 'Linda'
Subject: RE: finally getting a handle on the order part but there is another problem

 

In general, I don’t recommend changing the price of a product in the order.  You can do it, but if your royalties are based on the retail price, you will be effectively discounting the price (and thus the royalty) when you probably don’t intend to.  Of course, there are exceptions to every rule.  I’d still need to work through the math to understand whether this will help you or not.  My initial impression is that it will not.

 

Let me see if I can feed back to you what I heard as your “business rules” when selling books to your authors.

 

 

The issue for PubAssist is that an order can incur royalties or NOT incur royalties by setting the terms of the order; but it can’t process some of the royalties and not others.

 

Given that your author is the only one in a potential group of contributors that should not receive the royalty, I still think the best solution is to give them the discount, but immediately credit yourself by logging an artificial payment to the author’s royalty account. 

 

You’ll have to decide whether the author’s and other contributors’ royalties should be based on the Net or the Retail price for these situations.  Again, the issue for PubAssist is that the royalty specifications must apply for all sales—not just the sales to the author.  So, for example, if you base your royalties on the net price, and sell to the author at a 30% discount, you will be discounting the royalty to the other contributors.  That may be perfectly legitimate.  It’s a discounted sale.  But you’ll have to decide that for yourself.

 

Likewise, if the author’s royalty is based on the Net price, then the payment you apply should be the discounted royalty—NOT the straight 30%.  So, let’s go through an example where the author’s royalty is based on the net price.  Let’s say that your author’s book sells for $16.95 and the author wants to buy 10 copies.  The procedure for recording the sale and the royalty credit would look like this:

 

Scenario 1:

 

  1. Enter the customer order with the author as the billing (and probably shipping) contact.
  2. Enter their book (Title ID) in the items screen with a quantity of 10.  The extended price will be $169.50. 
  3. Discount this item 30%.  The extended price will now be $118.60.
  4. Thus, you have discounted the sale by $50.90.
  5. If the author’s royalty is normally 30% and based on the net price, this will yield a royalty fee of $35.60.
  6. So, you should next log a payment to the author’s account to compensate for the royalty.

 

Note the difference between what you credited the author by discounting the sale, $50.90, and what you will incur in royalty fees because of the discounted sale, $35.60.  If you simply reverse the royalty fee by entering a payment of $35.60, you have just shorted yourself $15.30.  You’ll make some of that up because the other contributors’ royalties will be discounted as well.  But, let’s try another alternative procedure:

 

Scenario 2:

 

  1. Enter the customer order as in Scenario 1, but DON’T discount the item for the author’s book.
  2. Instead, you can immediately enter a receipt against the invoice that credits the author for 30% of their sale, (i.e. $50.90).
  3. I would enter this receipt as a “Cancel Debt” receipt.  That way, you can separate those receipts from your income when reporting for tax purposes.
  4. Now, even though all your royalties may be based on the net price, in this case the invoice is for the retail price of the book.  So, your author’s royalty will be $50.90.
  5. Thus, you can log the payment to the author’s royalty account for $50.90.

 

You will have to decide which of these scenarios makes the most sense to you.  I can think of justifications for either one.  The second scenario will keep make numbers easier to understand.

 

Hope that helps,

 

Ron

 

From: Linda
Sent: Wednesday, November 02, 2011 11:26 PM
To: Ron Lawrence
Subject: finally getting a handle on the order part but there is another problem

 

I only have a chance to work on this late in the evenings these days. I
came over extra early so I could 'change the default' on the order. I
did what you told me but every single time, even though I cleared out
all the fields, I clicked on the 'new' sheet of paper logo on the bottom
Rogue Phoenix Press came up so I cleared the fields and put in the info.
I managed to get through the process for two orders and needed to quit
for a while so I could help Bruce bind some books. When I came back it
showed no orders so I assumed I did something wrong. I went through the
three tutorials, taking notes to make sure i didn't forget anything and
put in the first order again, even, again, putting in PayPal as a pay
source but it didn't register the order. I'm not unhappy ... I am
learning but am a tad frustrated that it isn't working quite right.

I did figure out that since I have some control over the amounts that go
into the order I can manipulate the price a bit. All of our sales are
based on the ebook price + the print price if the book is a print
version so if I want to give the author her discount I can just put in
the download price and add her extra amount to bring the price up to the
amount she is required to pay minus her % and mark it as no royalty for
her? That allows me to make sure the rest of the staff gets their
royalties??? Let me know if that makes sense, please?

Linda