In our royalty software the order of royalty rules; from top to bottom, determines which royalty rule will be applied to an activity. The rules are evaluated in order from top to bottom. The first rule with criteria that matches the activity is used to calculate royalties. Subsequent rules are ignored.
The image below shows the order of 4 royalty rules.
The first rule has an applies to criteria of sales below cost? If this is true the Below cost rule is used to calculate royalties and subsequent rules are ignored.
If the sale is not a below cost sale the eBook rule is checked. If the product’s format is eBook this rule is applied.
If the sale is not a below cost sale and not an eBook sales and the sale did not occur in the United States the Exports rule is applied.
If non of the rules above are applicable, then the Trade rule which applies to all activities (sales) is used to calculation royalties.
If the trade rule, was first it would always execute. The other rules would never be checked. Why? The software uses the first rule; from top to bottom, whose applies to criteria matches the sales record. Subsequent rules are ignored. The trade rule applies to all activities. This includes below cost, eBook and all territories.
The most most restrictive rules should be placed at the at the top and the least restrictive rules at the bottom of the royalty rules list.
Ordering Royalty Rules
To change the order of a royalty rule:
- Select the Add/remove/order author rights… button from the Royalty contract > Royalty rules tab.
- The Rights window opens.
- Select the rule to reorder.
- Select the Move up, Move down button on the right to change the order of the selected royalty rule. To sort all royalty rules in alphabetical order select the AZ button.