Royalty reports are due at the close of each calendar quarter for all licensed vendors. Over the years, we have found there to be common misconceptions regarding what should be included in the gross sales total for each transaction.

All vendors should take care to read Section 6 of the License Agreement, which defines gross sales as, “total customer invoice for the full value of the embellished product(s) less​ only​ actual shipping charges, ​actual sales tax, ​and actual returns​, up to the amount(s) reflected on the customer invoice(s)​. Gross sales shall be calculated before applying an discounts, rebates, allowances or other adjustments and​ the gross sales​ is inclusive of ​any additional invoiced charges including, but not limited to, labor charges, design fees, royalty fees, handling fees, rush fees, and processing fees.”

With this agreed-upon definition in mind, we hope to clarify some common misunderstandings while calculating gross sales:

1) Estimated shipping costs: Only actual shipping can be deducted from the gross sales total. Deducting any amount other than the actual cost of shipping charged by a third party courier is prohibited for any transaction. Additionally, you may only deduct the actual shipping costs to the consumer, not the cost of shipping to or from the manufacturer to your store.

2) Discounted or free items: Gross sales are to be calculated based on the full value of the embellished product(s) before applying any discounts or other adjustments. Although you may be promoting an item at a special price for incentive or to move inventory, the value of our clients marks do not change.

3) Embroidered product(s): It is a common misconception that royalties can be paid on how much vendors charge for the embroidery service; however, per the above definition, gross sales should be reported on “the full value of the embellished product(s).” With this in mind, all embroidered products should be reported on the value of the finished product rather than the cost of the embroidery service.

Any vendor with questions about the royalty reporting process is invited to reach out to us, we're always happy to assist https://greeklicensing.com/contact