DecoNetwork provides a comprehensive set of tools for setting the retail price of products that you offer for sale. In the Premium and Enterprise plans, you have the ability to run an affiliate network with the flexibility to vary the commission rate allocated to different affiliates.
This article will provide an overview of all the settings available for managing prices and commissions in DecoNetwork, the location of those settings in the system, and how the different settings can affect the final selling price of a product.
Before you read on, it is advised that you read the relevant articles to become familiar with the concept of the Fulfillment Center and the concept of the Affiliate. It is also important that you understand the following terminology in order to get a full understanding of how pricing works in the context of DecoNetwork.
- Cost Price: The price at which the Fulfillment Center buys a product from the supplier.
- Markup: The amount added to the cost price of a product to determine the selling price. There are two levels of Markup that can be applied in DecoNetwork. The first is the catalog markup, where the Fulfillment Center adds an amount to the cost price of a blank product to determine the blank product selling price. The second is the store markup, where an affiliate adds an amount to the set wholesale price of a product to determine the retail price.
- Recommended Retail Price (RRP): The suggested retail price configured for a product.
- Store Wholesale Price: This is the cost of a product to an affiliate that wishes to sell the product, although the affiliate does not have to pay for the product upfront. The store wholesale price is essentially the pre-determined amount that the Fulfillment Center keeps from the sale of the product sold through the affiliate store.
- Commission: The percentage of the selling price that the affiliate earns if a consumer purchases a product through the affiliate's store.
- Store Retail Price: The actual final price at which a product is sold to the consumer through a store.
Price Settings Structure
There are two levels of price settings in the DecoNetwork Fulfillment Center Admin interface - global product settings and individual product settings. Global settings include a large number of options and rules that allow you to set a pricing model to suit your business. Settings configured at the global level will apply to groups of products by default, allowing you to efficiently manage product prices in bulk. Individual product settings allow you to customize prices at the product level.
If you run an affiliate network, settings are further classed as being either Fulfillment Center settings and Store settings. Price settings that you configure at the Fulfillment Center level will preset price settings for stores. Price settings that you configure at the store level are specific to that store only.
It is best practice to set your pricing model in such a way that the rules for pricing work for as many products as possible. This will reduce the overhead of having to manually tweak prices for individual products, particularly if you have a large number of products.
Global Product Settings
The global price-related product settings are available to the Fulfillment Center under the Products menu (Admin > Products). These settings allow you to set the initial default values that are used to dynamically calculate prices for products that you add to your DecoNetwork system:
Supplier Catalog Markup
The Supplier Catalog Markup is an amount, that can be either fixed or tiered, which is added to the cost of all Supplier Catalog products by default to set the retail blank product price.
Click here for instructions on how to configure the supplier product markup.
Volume Discounts settings allow you to configure price adjustments for products based on the quantity purchased of the product per order line or per order.
Click here for instructions on how to configure volume discounts.
Product Groups settings allow you to set default behaviors for groups of products, including catalog markup, sizing, decoration pricing (and other properties not related to price).
Click here for instructions on how to configure product groups.
Sizes settings allow you to set product size definitions and price variants for each size depending on the color type.
Click here for instructions on how to configure product sizes.
Custom Fields settings allow you to configure extra options that can be applied to a product or group of products. An extra option may have a fee associated with it.
Click here for instructions on how to configure custom fields.
Global Decoration Settings
DecoNetwork supports the following decoration processes:
- DTG Printing
- Screen Printing
- Rhinestone Template
Support for specific decoration processes means that you can configure different pricing methods, price tables, and fees specific to each of the methods, as well as other properties such as acceptable design formats, color palettes, and production file format.
The global decoration settings are available to the Fulfillment Center under the Decoration Processes menu (Admin > Decoration Processes). As with global product settings, the global price-related decoration settings will allow you to set the initial default values that are used to dynamically calculate prices for products that you add to your DecoNetwork system.
Click on the links below to read the relevant help article on pricing related decoration settings:
- Decoration Pricing
- DTG Printing Price Tables
- Sublimation Price Tables
- Embroidery Price Tables
- Screen Printing Price Tables
Individual Product Pricing Settings
Based on the default global price settings, products that you add to your DecoNetwork system will automatically have a set recommended retail price. You can override the default settings to adjust the recommended retail price of each product through the product's Pricing page.
The Recommended Retail Price of a decorated product is determined by configuring its component prices:
- Blank product price
- Decoration processing price
Note, custom products (i.e. non-catalog products) that you add to your system will have a default blank product price of $0.
Both the Blank Product Price and Decoration Price have a number of configuration options for adjusting the price.
The individual product pricing settings are only available to the Fulfillment Center under the product's configuration settings (Admin > Products > Manage > Edit Product > Pricing).
Click here for detailed instructions on how to adjust the price of a specific product.
If you are a Fulfillment Center running an affiliate network, you will also need to consider commissions when setting the recommended retail price. The commission is a percentage of the sale price paid to an affiliate for products that are sold in their affiliate store. You should ensure that in setting the retail price, the return from sales after you deduct commissions, cover your costs and generates sufficient profit.
Watch the video below for an explanation of the commission settings in DecoNetwork and how they determine product pricing, how they affect the Fulfillment Center earnings and the affiliate store earnings. Read further for a more in-depth description of the commission structure in DecoNetwork.
Global Commission Settings
The global store commission settings are available to the Fulfillment Center under the Websites menu (Admin > Websites > Commission Settings > Standard Commission Rates). These settings allow the Fulfillment Center to set the standard commission rate for all affiliate stores. This commission rate is configured as a percentage of the recommended retail price. The system has the global standard commission rate for stores initially set at 0%. This value can be modified by the Fulfillment Center.
Click here for more detailed information on global commission settings.
Individual Store Commission Settings
All stores in an affiliate system will automatically adopt the global standard commission rate by default. The Fulfillment Center can override the standard commission rate for individual stores through the Store Commission Settings page under the store's Administration settings.
The store commission settings are only available to the Fulfillment Center under a store's website settings (Admin > Websites > Manage (store) > Administration > Store Commission Settings).
The commission rate defined here only specifies the initial commission that is allocated for an affiliate. It does not necessarily represent the actual rate of earnings that an affiliate may receive from a sale. This is because the affiliate can change their earning potential by changing the markup setting both at the store level and at the individual product level. Furthermore, the affiliate can choose whether volume discounts are applied to the markup. If applied, the actual rate of commission will be reduced.
Click here for more detailed information on individual store commission settings. Please read further for an explanation about markups.
The store commission is presented to affiliates in the form of a default markup. The default markup is an amount added to the store wholesale price of a product to set the default store retail price. The store wholesale price is the amount the Fulfillment Center will keep from a sale. The markup amount is the amount the affiliate store owner will earn from the sale.
Click here for instructions on how to configure an affiliate store's default markup.
How is the Store Wholesale Price Calculated?
The store wholesale price is calculated by subtracting the default store commission amount from the recommended retail price (RRP) set by the Fulfillment Center.
Effect of Store Commission Change on Default Markup Percentage
Initially and each time the Fulfillment Center updates the store default commission rate, the default markup percentage will reflect the store default commission rate. We refer to the default markup percentage that is determined by the store default commission rate as the commission derived default markup. The commission derived default markup percentage is calculated by dividing the store default commission amount by the difference between the recommended retail price (RRP) and the store default commission amount.
At the commission derived default markup, a product's sale price for the store will be the same as the recommended retail price set by the Fulfillment Center.
When an affiliate store owner changes the markup from the commission derived default markup percentage, they will effectively change retail price and, as a consequence, the actual rate they will earn from the sale price.
Things to note about setting the markup:
- The affiliate can set a zero markup, but the price cannot be lower than the calculated wholesale so the Fulfillment Center cannot make a loss.
- The affiliate can set a markup as high as they like, (though that may not be competitive) and the affiliate will keep all revenue generated above the calculated wholesale.
- The default markup can be overridden at the individual decorated product level. Click here for detailed instructions on how to adjust the markup of a specific product.
Any markup (price increase) applied to individual products is reflected as commission for the store. So, if the store commission is 0% and the store owner adds a markup to individual products, the markups will be considered commission for the store when these particular products are sold.
Other Fees and Charges
Apart from the product price and commission settings, there are some other price settings related to additional fees and charges that are worth noting. Artwork, shipping, rush orders, and fees relating to each decoration process (all optional and configurable) all contribute to the price the consumer pays for an order. Another fee, not mentioned, is the Affiliate transaction fee. The affiliate transaction fee is a fee charged to an Affiliate by a Fulfillment Center on a per order (not order-line) basis as a cost-recovery mechanism (again this is optional).
- Shipping fees, rush order fees, taxes, and artwork fees are added to the order after sales commission is calculated, so it does not affect product pricing. These fees are added to the total cost of the order and this money will go to the Fulfillment Center.
- Affiliate transaction fees are calculated as a percentage of sales commission, and they are kept by the Fulfillment Center as a means to recover the cost of administering the financial side of the order on behalf of the Affiliate.
Click on the links below to read the relevant help article on the settings for additional fees and charges:
- Shipping Methods
- Shipping Price Levels
- Current Taxes
- Taxes Settings
- Rush Order Fees
- Extra Charges
- Artwork Fee - All Decoration Processes
Map of Price Related Settings
This map shows the relationship between all the price related settings available in the DecoNetwork system.