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Thread: equation to calculate 12% referral fee based on final selling price

  1. #1
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    equation to calculate 12% referral fee based on final selling price

    trying to create an expression to determine how to price a product for an online channel based on their 12% referral fee. the product price would need to consists of my price plus the referral fee. the trouble is that i cannot predict what the fee will be since it is based upon my final selling price. i'm thinking there needs to be a 2 level equation. the first one to calculate the estimated referral fee and the second one to add that value to my selling price?
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  2. #2
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    Re: equation to calculate 12% referral fee based on final selling price

    If we let n = your net price (i.e. the amount you want to net after the referral fee), let P = price to the customer (including the referral fee) then what you have is:

    P = n + 0.12P

    Rearrange:

    0.88P = n

    P = n/0.88

    For example, if you want to net \$100, then set P = 100/0.88 = \$113.64. That way when the customer pays \$113.64, the referral fee is 0.12(113.64) = \$13.64, and you net \$100.
    Last edited by skeeter; Feb 1st 2017 at 10:49 AM. Reason: deactivated latex
    Thanks from HallsofIvy, aonefun and deesuwalka
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  3. #3
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    Re: equation to calculate 12% referral fee based on final selling price

    after much struggling with this issue, i cannot thank you enough for this ingenious, organized and straight-forward response. the equation works like a dream!
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  4. #4
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    Re: equation to calculate 12% referral fee based on final selling price

    i do have an additional requirement for a different selling channel that complicates the matter a bit further. above the 12% selling fee there is then a credit card checkout processing fee above the final selling price of 2.9% plus a flat fee of $0.30
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  5. #5
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    Re: equation to calculate 12% referral fee based on final selling price

    okay i think i got this new equation figured out based upon your initial response. thanks again.
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  6. #6
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    Re: equation to calculate 12% referral fee based on final selling price

    the equation you have provided above on Feb 1st 2017, 10:46 AM works great for my needs EXCEPT for when the ultimate value of "0.12P" is less than 1. In this case, I need the equation to be:
    P = n + 1
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  7. #7
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    Re: equation to calculate 12% referral fee based on final selling price

    Why don't you post a new revised problem...
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