Is Commission Paid After VAT Deducted?

Last night a friend and colleague of mine purchased a Hotpoint AQXXF149P Washing Machine from Sainsbury’s Kitchen. He did it via my ShopCodes tracking link, not to receive a discount (as there isn’t any) but so that I could receive the commission.

This morning he asked me if the sale tracked and I said yes and showed him that I made one Sainsbury’s Kitchen sale at 20:40.

He was surprised to see this as he had spent a lot more than the price listed on the Affiliate Window Transaction Breakdown Report screen which shows a pending sale of 244.26 with a 2% commission of 4.89.

He spent 287.00 on the washing machine, plus a further 12.99 for disposal of his existing appliance and delivery at 19.99. His total outlay was 319.98.

Hotpoint AQXXF149P

In his email order summary it does say that the VAT element included in the Total price is 47.66.

I’ve tried to do the maths but I can’t quite figure out why it says 244.26 within Affiliate Window and not 287.00.

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7 Responses to “Is Commission Paid After VAT Deducted?”

  1. Ray

    Some merchants deduct the VAT before sending the sale value to the network, some don’t. It’s annoying that most merchants don’t declare whether VAT is deducted as it makes comparing commission rates a little meaningless.

    In this case you’ve earned 1.7% commission rather than the advertised 2%. If you take into account the fact that you aren’t paid for delivery and the add-ons, you actually received about 1.5%.

  2. 244.26 * 1.175 = 287.00

    You’ve been paid based on the ex VAT price of the washing machine. Evidentally disposal charge and delivery don’t attract commission.

    The 47.66 is the total VAT on machine, disposal and delivery.

  3. prevat price = (full price x 100) / 117.5
    in your case (287 x 100) / 117.5 = 244.26

    What the basket value actually is depends on the merchant and, I agree, it should be communicated through the program details page. What makes sense for most retailers is the rule “shipping included, vat excluded” (at the end of the day, merchants don’t pay vat, so why would they pay commission on it). Whether shipping is included, that depends on the margins for this product (p&p is another product, keep in mind).

  4. Gotta agree with hero completely on this one as virtually every retail programme I’ve worked on is set up this way. P+P can also sometimes removed from the equation (pre commission calculation) when the merchant is passing these charges directly onto the consumer. Merchants would lose money on delivery otherwise which of course isn’t really sustainable. The alternative would of course be to lower commissons and keep these added figures in, much cleaner to work it the first way though.

    Cheers
    Paul

  5. Hi

    To get back to a VAT ex price from the inclusive price I just divide by 1.175

    287 (VAT inc) / 1.175 = 244.26 (VAT exc)

    Remember also that certain products attract different rates of VAT. Don’t quote me on this but items such as books do not attract VAT (or they do but it’s 0%).

    And as TradeDoubler is now promoting Irish affiliate programmes it could get messy with cross border transactions (again, there are VAT implications – just like Dublin based Adwords not charging UK PPC’ers VAT).

    Isn’t VAT boring?!

  6. Congrats on being debt free.

    kevin

  7. Hi guys

    To confirm, the DRL brands, which includes Sainsburys Kitchen Appliances, Boots Kitchen Appliances, Appliance Deals, MFI Appliances and Appliances Online, all pay commission excluding VAT and delivery charges.

    It is common place for large electrical retailers to award commission ex-VAT, and because DRL do not make anything on the delivery charge it would be difficult for their business to sustain a commission pay-out on this value.

    I hope this clears up the situation. Should anyone have further questions please don’t hesitate to contact us.

    If you would like to contact the DRL contact here, you can email anthony.clements@affiliatewindow.com. Also feel free to give me a shout.

    Best wishes

    Julia

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