After a royalty rule is added to a contract, you must specify what this rules does. This is done by selecting the Details button for the rule and specifying the Applies to criteria and Royalties calculations for the rule.
Details > Applies to
The Applies to tab specifies the criteria for this royalty rule. If a sales activity matches all the criteria this rule will be applied. If the sales activity does not match all the criteria in this rule the software will proceed to the next rule in sequence; from top to bottom.
The image below show the Applies to criteria for an eBook rule. The criteria specifies that this rule only applies to transactions for editions (products) with a format of eBook.
A royalty rule can apply to all sales, sales with discounts greater than X and not greater than Y or sales below cost.
Example 1: High Discount – Discount >55% and less than 70%
Example 2: Deep Discount – Discount >70%
Example 3: Free Books – Discount >100%
If the greater than discount percentage is 100%, the rule is interpreted as equals 100%.
Note: Assigning an entry type of Promo (free) to a sales record will exclude the sales transaction from royalty calculations and life to date sales quantities reported on royalty statements. You can choose to display the life to date free quantity (entry type = Promo (free)) on royalty statements.
The royalty software used the format specified in the edition record at the time that the sales record is created.
All formats, only the following formats or any format except can be specified.
Example 1: Only Paperback format
Royalty criteria can be based on sales type. Sales type is value assigned to a sales record. Sales type can be specific to a sales record or a default sales type can defined for each company (customer) account.
Sales types are user definable. Examples are: export sales, premium, conference, author purchase, direct sales, etc.
Criteria can be ONLY the following sales types or Any sales type EXCEPT.
Example 1. Sales type: Export
There are two ways to specify criteria for export sales. One method is to assign foreign sales records a sales type of “Export”.
The second method is to populate the territory field with the country name. This allows you to create a criteria based on territory.
Royalty criteria can be based on the value of the title record’s Classifications field (Title record > More… > Specifications tabs).
Example 1: Pulitzer prize winner
Book publishers may pay a higher royalty rate on award winning titles. A contract may specify that a Pulitzer prize winning title’s royalty increases from 10% of retail to 12% of retail.
Royalty criteria can be based on the value of the edition record’s Other classifications field (Edition > General tab).
Example 1: Leather Bound
Book publishers may pay a higher royalty on limited editions. When a limited edition is printed this fact is usually specified in the Other classifications field in the edition record, not as a new format.
The territory (country) is specified in the sales record’s More tab. If the sales record does not specify the territory the territory field value will be blank.
All territories, only the specific territories or any territory except can be specified.
Example 1: Applies to sales in the United States
Example 2: Applies to sales in all countries except for the United States
Example 3: Applies to sales in all countries except for Canada and the United States