Creating Consignment Plans

Before  a consigned item can be entered,  a consignment plan must be created.   A consignment plan is simply a way to identify how consignors are charged  There are two primary ways that consignors can be charged.   One way to charge consignors is to identify a set of fees and commissions that are collected.  Alternately, a simple profit sharing plan can be defined.

 

To create a Consignment Plan:

  1. Open the Manage Consignment Plans window.  How?  

 

 

  1. Click the New button.  Alternately, an existing consignment plan can be selected, followed by clicking the Duplicate button to use this is as a starting point.
  2. Enter a name for the new consignment plan, when prompted.
  3. Click OK.
  4. Select the consignment plan from the list to enter the details of the consignment plan.  
  5. Click Edit and proceed to the instructions on editing consignment plans.

 

 

To edit a Consignment Plan:

  1. Open the Manage Consignment Plans window.  How?

 

 

  1. Click the Edit button.
  2. Choose whether a Commission Plan or a Profit Sharing Plan will be used.   When using a Commission Plan, specific fees will be charged and commissions will be based on the final sale price.   A Profit Sharing Plan will split the profit between you and your consignor after all costs and fees are taken out.

 

  1. Fill in the values according to the following table.
  Field Value
Fees Base Fee Enter any fee that you will charge regardless of all other fees.  This is usually some guaranteed payment to make sure you have been paid for your time even if the item does not sell.
  
Collected at drop-off - When checked, it is assumed that you have already collected this fee and it will not be charged to the consignor in the Consignor Payout Report.
  
Collected at time of sale - When checked, this fee will be included in the Consignor Payout Report to be collected with the other fees.
  Site Listing Fees Check this box to charge the consignor for any site listing fees like bold, highlight, etc.  If unchecked it will be assumed that you pay for it out of your commission and other fees.
  Final Value Fees Check this box to charge the consignor for any Final Value Fees charged by the site.  Final Value fees are commissions the site takes based upon the sale price of the item.   If unchecked it will be assumed that you pay for it out of your commission and other fees.
  Payment Processing Fees Check this box to charge the consignor for any Payment Processing Fees such as PayPal fees.   If unchecked it will be assumed that you pay for it out of your commission and other fees.
  Shipping Fees not Paid by Buyer Usually the shipping fees are paid by the buyer, but when providing free shipping the shipping fees can be passed on to the consignor by checking this box.
  Other Fees If you have any additional fees you charge for things like packaging materials, advertising, etc. add those fees here.
Commissions Flat Commission Select this option if you charge a flat commission regardless of the selling price.  For example, if you charge $100 for selling a car online regardless of its price, you would use this option.
  Percentage Commission Enter your commission percentage table to identify the percentage you charge based on the sale price.  This range must cover all values from $0.00 to $9,999,999.99.   Each range start after the first must be the range end of the previous row plus $0.01.
  Tranched vs. Graduated There are two ways you can apply a percentage commission.  A tranched commission is more equitable and consistent, but is slightly harder to understand.  A graduated commission has monetary disadvantages to the consignee, but is easier to understand.
  
Tranched - When using a tranched scale, the percentage at each level will be taken out until the final value is reached.  For example, using the example in the image above, if an item sells for $502, you would collect:       
 
35% on the first $100 = $35
+ 30% of everything between $100.01 and $250 = $45
+ 25% of everything from $250.01 to $500 = $62.50
+ 20% of everything over $500 = $0.40
==============================
So you would collect $142.90 in commissions.  Using a tranched scale, your commission will always be higher when an item sells at a higher price, so it is very equitable, however it is a little harder for consignors to  understand.
  
Graduated - In a graduated scale, you simply find the final price and apply the percentage for that range.  Using the same example, a sale of $502 would result in a commission of 20% or $100.40.   
  
Using a graduated scale, you are not guaranteed a higher commission with a higher sale price.  Let's say our item sold for $480 instead of $502.  In that case you would make 25% on $480 = $120 commission which is $19.60 more than you would have made if it sold at the higher price of $502.
  
We encourage the use of a tranched commission scale, but due to customer requests, we have included the graduated scale as an option.
  Minimum Commission If you have a minimum commission that you want to collect regardless of the sale price, then enter it here.  For example, you may enter $10 to guarantee you get $10 even if the item doesn't generate much interest and sells at only $21.
  Maximum Commission If you have a maximum commission that you have agreed upon, enter it here.  This is useful if you have negotiated a deal where you will sell a high ticket item and can earn a commission up to a certain dollar value.  For example a maximum of $500 when selling a boat.
  Apply commission calculation to each item individually Commissions can be calculated on the sale as a whole or on each item individually.  For example, if a sale consists of 5 items each purchased at $100, the consignment can be calculated against a single sale of $500, or the sum of 5 sale commissions at $100.   
  Calculate commission before subtracting fees paid by consignor Commissions are usually based on the final sale price, however if the consignor is paying for Site Listing fees and Final Value Fees, etc, you may want to deduct these fees before applying the commission scale.   
  
If you want the fees included in the total when calculating the commission check this box.  Otherwise leave it unchecked to remove the fees before applying the condition.
  
For example, using the example consignment plan above,  if an item sells for $90 and has a Site Listing fee of $2.00 and a Payment Processing fee of $3.00 paid for by the consignor, then if this box is checked, the commission would be 35% of $90 = $31.50.  If, however, this box was unchecked, the commission would be 35% of ($90-$2-$3) = $29.75
Profit Sharing Split When using a profit sharing plan, choose the percentage split that will be applied after all costs and fees have been deducted.  For example,  if using a 50/50 split on an item that cost the consignor $50 and sold for $100 with eBay/PayPal fees of $10 (paid for by you, the consignee) the payout would be as follows:
  
$100 - $50(cost) - $10(fees) = $40 profit
  
The consignee would get $20 of the profit and the consignor would get $20 of the profit.   The consignee will also keep the fees they paid.  This  includes any listing fees, the payment processing fees, and final value fees. The consignor will be reimbursed for the cost of the item as recorded in the inventory record.
  
Since the consignee paid the $10 in fees, they would keep $30 ($20 profit split +$10 paid in fees), and pay the consignor $70 ($50 initial cost+$20 profit split).
  Cost Distribution To be able to calculate the payout correctly, specify who paid for the item.  If the consignor paid for the item, then the cost will be taken out before the calculated split is performed.
  Fee Distribution Specify whether or not the consignee is reimbursed for the fees before the calculated split is performed.
  Shipping Profits If the buyer paid more for shipping than the actual shipping cost, then there will be profit associated with the shipping portion of the sale.  Specify how any shipping profits should be distributed.

 

  1. After saving any changes, the option to recalculate consignment payouts for all unpaid consignments using this plan will be presented.  If the changes should only apply to all future sales, click No.  If the changes should apply to any currently unpaid consignments, click Yes.

 

To delete a Consignment Plan:

  1. Open the Manage Consignment Plans window.  How?  

 

 

  1. Select a consignment plan and click the Delete button.  Be careful when deleting consignment plans.  When a consignment plan that is in use is deleted, all items and sales that are associated with that plan will be reassigned to the first consignment plan in the list.  Consignment plans should only be deleted in very rare cases.

 

To rename a Consignment Plan:

  1. Open the Manage Consignment Plans window.  How?  

 

 

  1. Select a consignment plan and click the Rename button.  When prompted, enter the new name and click OK.

 

 

To reorder a Consignment Plan:

  1. Open the Manage Consignment Plans window.  How?  

 

 

  1. Select a consignment plan and click the Move Up or Move Down button.