Month end, a code export and a calculator
You pay a group of creators a commission on sales made with their discount codes. At the end of each month someone exports orders by discount code, filters by creator, adds up the totals and works out the commission. Then they remember returns. A lot of fashion orders come back in part, and the refunds for this month's orders are still arriving next month.
So they either pay on gross sales and overpay, or try to subtract returns by hand and end up with a number the creator questions. When a creator asks for a breakdown, it takes an afternoon to rebuild.
Why commission is so awkward in fashion
- Returns rates are high and part returns are common, so gross sales overstate what was earned.
- Returns arrive over weeks, after the month you want to pay.
- Codes get shared on voucher sites and used by people who never saw the creator.
- Different creators have different rates, tiers or flat fees.
- Nobody has a statement format both sides trust.
The costs of doing it by hand
| Problem | Result |
|---|---|
| Paying on gross sales | Commission paid on clothes that came back |
| Manual return deductions | Hours of work and numbers creators question |
| Leaked codes | Commission on sales the creator did not drive |
| No statement | Trust in the programme wears thin |
How we calculate and pay commission properly
- Each creator's codes and tracked links are held against their agreement: rate, any tiers, whether commission is on net of discount and shipping, and the returns window you use.
- Orders that use their code or link are pulled from Shopify daily, with line-level detail.
- Returns and refunds are matched back to those order lines as they happen, so part returns reduce the commissionable amount only by what came back.
- Commission for an order becomes payable once the returns window has closed. Until then it shows as pending, so creators can see it building.
- Sales that look like leaked code use, such as orders arriving from voucher sites, are flagged for a person to decide on, using your own rules.
- At month end, a statement per creator lists payable orders, returns deducted and the total, and a payout file goes to your accounting system, such as Xero, as a bill or a batch.
A simple creator portal can show each creator their own pending and payable figures, which removes most of the 'can you send me a breakdown' emails.
Month end afterwards
The statement run is a single step. Your finance person reviews the totals, approves them, and the bills appear in Xero ready to pay. Each creator gets a statement they can read line by line. When one asks why an order is not included, the answer is on the statement: returned on the 14th, or still inside the returns window.
One order, followed through
A shopper uses a creator's code to buy a coat, a pair of trousers and a knit. The order appears on the creator's pending list the next day. A week later the trousers come back as too long, and the refund is matched to that line, so the pending commission drops to cover only the coat and the knit. When your returns window closes on that order, the remaining commission moves from pending to payable and lands on that month's statement. Nobody touched a spreadsheet, and the creator can see each step.
Where your judgement comes in
Whether to pay on sales net of VAT, discount or shipping is set in each creator's agreement, and your accountant should advise on the tax side of paying creators. Leaked codes are a judgement call; some brands pay regardless to keep the relationship, others do not. The system flags, and you decide. If you run an affiliate network already, we can take its figures instead of rebuilding them.
Is this your month end?
- Creator commission is calculated from a spreadsheet export.
- Returns are deducted by hand, if at all.
- Creators ask for breakdowns you struggle to produce.
- Codes have ended up on voucher sites.
- Commission is paid before returns have come back.