Sorry, I might be stupid. I still can’t find anywhere saying the buyer fee is always 20% of the item price. It only says it is $20 when the item price is $100. Is it going to be similar to the fee structure where the percentage is dynatice, based on the item price? Like the buyer fee will go down when the item fee goes up? Just can’t find a formal statement explaining it.
Hey Melon, just for clarity:
- Buyer Fee is 25% of the Item Price
- Buyer Fee + Item Price = List Price
- Buyer fee = 20% of List Price
So for example:
- $20 is 25% of $80
- $20 + $80 = $100
- And $20 = 20% of $100
I understand that at the end we will get the same amount of money (except of those $2). This changes have mainly tax and law reasons for envato only and this is very bad for authors.
What about us (authors) why you don’t think that we need a solution here?
We receive 80% from each sale and we pay to envato 12,5% from 80%. This means that we must pay taxes (like GST) from “item price” (from 80%). In Canada for example we need to pay taxes only for Canadian Buyers or if we can’t prove the Buyers location.
@Collis, please respect us and give an invoice for each sale or give us the complete information about OUR customer for each sale we make. Think about that we need to pay ~ 15% GST because envato doesn’t want to provide us the full information about our clients.
Every where is written that we are the author of our items and we are the seller but we don’t have access to see our customers and to see the invoice. If we sell something we should receive an invoice if no take the responsibility and don’t call us sellers.
This is very important issue and we need ASAP a solution for this and I think that now is the right time to make a change in our direction.Thanks
Hi WPlook, It’s a great question and we are working on improving our invoicing and financial documentation tools for authors. Part of communicating the core structure is that all invoicing/receipts will be corrected around it. I’ll have more information in the coming months!
The new fee structure seems like complexity for the sake of complexity. I don’t get it. Why even explain it if the numbers work out the same? Couldn’t you put something like this into the fine print of a license or TOS and it would “legally” cover the activity but we’d never need to know about it?
Do what you need to internally to get Envato focused on the buyer but don’t turn our earnings pages into collateral damage. This is the kind of accounting trickery I would expect from a “company”, yet in my mind Envato is a community, so it’s just weird.
Note:The term “trickery” is not meant to imply you’re doing something underhanded. It just seems to fit in this case because you’re moving the money around but it all comes out the same in the end. I can’t think of any other way to describe it. Maybe shenanigans?
Because the change has some long-term consequences and substance, I felt like we needed to make it quite overt and make sure authors/community understood the new structure. We’re on a project to fix up our invoices, receipts, and financial tools and those things won’t make a lot of sense unless you see the core structure we’re building around.
I’m putting more brain cycles to the complexity point though, I feel like we need to do more work to address pages like the earnings page to make sure authors feel they are getting the information they need.
Hmmm I think the idea is to create two separate fees, buyer fees and author fees. Right now authors always take a set commission, like 30%.. but with the introduction of another fee on the buyers end, Envato can increase their buyer fee if the want to without having to adjust the prices. It appears to not affect us now, but later we might see buyer fees increased. But then again this is just my own theory
This is a good example of illustrating that the different model can produce quite different outcomes.
You are correct that the buyer fee can be changed without altering the item price. I seriously doubt we would ever increase that fee, however decreasing it for volume buyers is a definite possibility.
This whole thing was explained badly and made things more confusing. I think we can all agree to that and it’s something both Collis and Envato need to work better at.
However, can someone explain how, if as an author I am earning the same, then how come I just sold an email template and earned $11.90 today that 2 days ago I earned $13.30 (same item – same selling price) – to me that appears as if I lost around 11% in my earnings on that sale.
11% less earnings seems like I gave more to someone somewhere?
Again, maybe I got something wrong here and don’t understand it still (it seems like an alteration of income vs expenses for tax purposes to benefit Envato) but I have seen repeatably Collis say it will make really no difference to your earnings.Jonathan
Hi Jonathan, evidently yes I should have done a better job of explaining. Things like fees are tough, and unfortunately one of the effects of this change is the introduction of complexity – when normally we actively work to decrease it.
In terms of the earnings, I’m not sure I followed your example – but assume there was a Handling Fee involved? In which case, as I mentioned previously the overall effect should be pretty much negated by increase in conversion, recent price increase, and for non-exclusives the fees change.
Sounds like there’s some great stuff in the pipeline.
Regarding the fee structure, I have to agree with a couple of other posters that it sounds pretty much like a sleight of hand. The numbers are actually pretty arbitrary. What isn’t entirely clear from the $100 examples is whether the $20 fee is a flat fee or not. I assume that it’s a percentage, otherwise the $20 buyers fee on a $2 item would be absurd. In any case the author’s cut of the entire item price to the buyer appears to remain stable.The question that hasn’t really been answered is “what’s the point is of breaking it down in this way?”
This may (or may not!) help, but a good way to look at it is that we’ve switched fee structures to an alternative system, but in making the switch we took care to make sure that we didn’t leave authors worse off.
Once switched, the core business model / fee structure, then underpins what we do. So as a simple example I’ve been contemplating a buyer fee ladder for volume buyers (like the elite author ladder). To be clear, this is not a currently active plan (i.e. no promises!) – but hopefully illustrates how the alternative structure can be used.
In terms of what our fee to the buyer is, it’s 25% of your item price (which equals 20% of the total). The fee will always hinge on your item price.
Regarding new fees breakdown:
I understand the need to be more transparent, but please don’t lose the simplicity. Less is more!
Hey Urbazon, yes I think that’s my big takeaway from the last 24 hours, is we need to continue to work on simplifying the new structure down. I think having the dual model works, but it needs to be cleaner and easier to understand!
Thank you for answering us – this is why i love Envato. Friendly community, focused not only on corporate interests, but on some things too, that support this company from inside. I mean, i was impressed you have time to answer us.
Thanks Lumen! Truth be told, I don’t come to the forums enough to answer questions! It’s permanently on my to-do list, but sometimes too many meetings get in the way
While we’re on the topic of fees, something that I’ve noticed and many authors have too, is when we use SWIFT payments we’re being charged $60 in transaction fees instead of $35 as displayed on the withdraw page. I’ve checked my figures and this has been happening for some time – the amount of dollars incoming is always exactly $60 less (this is before my bank and foreign exchange charges)
If the minimum to withdraw is $500 and one issues a $500 withdrawl.. $60 in transaction fees is a fair amount – that’s 12% instead of 7% of our earnings go to fees.
My question’s are
1) Why is an additional $25 being deductedSince this is our commission here in question, I hope we can have more clarity on what fees are being deducted going forward. If the SWIFT fees are $60, then you should mention it on the withdrawal page, otherwise it’s misleading.
2) Why is this not mentioned on the withdrawl page
3) Will we be compensated for the missing $25?
Hey Pierre, I double checked and we haven’t at any point changed anything with withdrawal fees (in years), so I assume this is a change with your bank or a routing bank that your bank is using?
I know we’re looking at more options for withdrawals to try to bring down the cost there, but it’s a difficult problem moving money around the world. I guess that’s what Bitcoin is hoping to address!
Well I’m off to put the kids to bed, hopefully have answered all the most important questions. Community team is around overnight, and I’ll be back in the morning to answer any new big q’s that have popped up!
With all the changes we’re making, I’ve finally been getting my forum post count up