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shellcox(I'm new)I'm new
1 Oct 2021

Hi there, our current business model takes goods on consignment and we have our agreement as charging 35% commission + gst - as the goods we sell are with GST included. As half of our members aren't registered for gst they can feel like they're missing out as our our unit cost that we pay them for their sold goods on consignment is $RRP-35%-gst, so really it's closer to 45% that we are charging. I'm thinking for ease etc that I will change the costing to commission 40% inc GST - that way this is the outside number that they will see...and no surprises...I'm wondering if there is any help to clarify a good outcome for both parties this way.

8,590 views
2 replies
8,590 views
2 replies

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Most helpful reply

RichATO(Community Support)Community Support
7 Oct 2021

Hi @shellcox There's no right or wrong answer here so feel free to ignore this advice. I think a fairer way for both you and your clients is to subtract the GST amount before calculating your 35% commission. For example, take an item you sell for $1000 at RRP inc GST. Deduct GST of $90.91 = $909.09 ex GST. Commission at 35% of that = $318.18 plus the GST you are receiving = $409.09 to you. Client receives $590.91. Your suggestion of 40% including GST and paying the client $600 is a little more generous by comparison.

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Most helpful reply

RichATO(Community Support)Community Support
7 Oct 2021

Hi @shellcox There's no right or wrong answer here so feel free to ignore this advice. I think a fairer way for both you and your clients is to subtract the GST amount before calculating your 35% commission. For example, take an item you sell for $1000 at RRP inc GST. Deduct GST of $90.91 = $909.09 ex GST. Commission at 35% of that = $318.18 plus the GST you are receiving = $409.09 to you. Client receives $590.91. Your suggestion of 40% including GST and paying the client $600 is a little more generous by comparison.

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