Hello,

OK, I've been racking my brain about this and I've read all of the other posts I could find about Zenfolio's Service Fee (in my case 12% since it's being fulfilled by Zenfolio and a print product was purchased).  My confusion comes in, I believe, because I gave my customers a coupon code to use.  I could be wrong, but could anyone shed some light on this question?  Below is my example in US dollars.

Revenue - $25.46
Less Coupon - ($5.00)
Net Revenue - $20.46
Less Cost of Products - ($1.86)
Gross Profit - $18.60
Less Sales Tax - ($0.96)
Less Shipping - ($3.50)
Less Service Fee - ($1.71) (This is the number I can't figure out how it is calculated)
Net Profit - $12.43 

I hope it's not extremely easy, because I can't figure this out - any thoughts?  

I appreciate it.

I believe that your service fee should be 12% (0.12) of your profit from the sale, which in this case would be $14.14 ($18.60 - 0.96 - 3.50).  $14.14 x 0.12 = $1.70, so why you have $1.71 I'm not sure......  but that is how it is calculated.  I'm pretty sure.  :)

Zenfolio calculates a service fee based on profit you earn, not from the total order amount. This means that the service fee is applicable to the residual of gross profit less sales tax and shipping. You can refer to our pricing and how it works here http://www.zenfolio.com/zf/selling.aspx#fees .
 
In your particular example, you the service fee of 12% equals to $1.70 = ($18.60 - 0.96 - 3.50) x 12%. Kevin's logic is absolutely correct. On your transaction detail report you see a $1.71 service fee. This penny difference is due to rounding because our system calculates service fee based on an individual product and not the total.  

Hello again,

Vitas [Zenfolio]:

This penny difference is due to rounding because our system calculates service fee based on an individual product and not the total.  

Could you provide a little more insight about the difference in price?  I know it's a penny difference in the original example I noted, but this total seems to be inconsistent.  Here's an additional example to show the inconsistency.

Revenue - $46.43
Less Coupon - ($5.00)
Net Revenue - $41.43
Less Cost of Products - ($4.69)
Gross Profit - $36.74
Less Sales Tax - ($1.98)
Less Shipping - ($6.45)
Less Service Fee - ($3.43) - Again, this is the total that I'm having trouble understanding - it's actually calculating at 12.14%
Net Profit - $24.88

In this example 12% of the profit would be $3.40 = ($36.74 - 1.98 - 6.45) x 12%.

I guess I'm asking for additional information around how to understand how this truly isn't 12% of profit as written under the Fees section (page you referenced above).  The reason this matters to me (more than the couple pennies off) is that my accounting system allows me to input Revenue, Coupon Price, Cost of Products and Shipping, and then the system calculates the rest for me - so unless I can properly understand how this works, I won't be able to properly utilize my accounting system.  A penny-here and a penny-there is no big deal - but after a whole year of revenue, my accounting will be out of balance.

Thank you for your assistance.

I think what Vitas is referring to is rather than totalling the products and then calculating service fee, the system is calculating service fee on individual products first, and then totalling the calculated service fees and because of roundoff differences on individual products, it shows a slight difference in that total.

Can you please contact support@zenfolio.com and someone will walk you through calculations?  Please provide a link to the specific order number. Thanks!

Hello again,

I apologize for the length of time until I followed up on this post, but I thought it would be relevant in case I wasn't the only one that was inquiring about how the service fee percentage is calculated.

I took Vitas's advice and contacted support and after a couple days I got a very thorough explanation and diagram of how the fees are calculated from Zenfolio's accounting department.  Awesome!  It definitely helped shed some light on fees and I thought I would share the results of my example.

For this example, I was incorrectly calculating the fees in the same way that Kevin was assuming it was calculated - I assumed it was $18.60 (Gross Profit) - $0.96 (Sales Tax) - $3.50 = $14.14.  Then I thought it would be 12% of $14.14 getting you to $1.70 - that is incorrect.  

The fees are properly calculated on a per product basis (which was stated in other posts in this thread, but this shows the calculation in black and white).  In this example, my customer purchased three 4x6 photos and one 5x7 photo.

Product #1 - Three 4x6 photos

Sale price per photo - $5.00
Less base cost - $(0.29)
Total - $4.71
Less 12% Zenfolio Service Fee - $(0.57)    [$4.71*.12] 
Profit - $4.14

Since there were Three 4x6 photos ordered the total service fee for for the 4x6 photos is $(1.71)

Product #2 - One 5x7 photo

Sale price per photo - $6.00
Less base cost - $(0.99)
Total - $5.01
Less 12% Zenfolio Service Fee - $(0.60)    [$5.01*.12] 
Profit - $4.41

Since there was only One 5x7 photo ordered the total service fee for for the 5x7 photo is $(0.60)

To throw one more wrench in the mix, my customer also used a coupon code I assigned to them for $5.00 off their total order.  Zenfolio adjusts for this coupon difference and credits you back 12% of the coupon price so that equals a credit coming back of $0.60 (Calculated by taking the coupon price of $5.00 and multiplying by 12%).

If you total all of the fees and credits, here's what you get...

$(1.71) for the three 4x6 photos
$(0.60) for the one 5x7 photos
$ 0.60 credit back for the coupon adjustment 
$ 1.71 total Zenfolio Service Fee

Hope this helps anyone else that might wonder how the service fees are calculated, especially with the extra twist of the coupon usage.  

One other thing to note - since Zenfolio only collects fees based on profits, if you use an "at cost" coupon for your friends or family, you won't pay any Zenfolio fees on their orders - only the base price for the products.  Just thought I would note that since I also had that in the back of my head at one point as well.

Any questions or comments, please let me know.