Flowwow sellers are compensated monthly for promo codes redeemed by customers. However, the method for calculating compensation has been updated. From now on, the compensation amount will be partially or fully offset against the platform fees charged by Flowwow. This change aims to simplify reporting and withdrawals for limited liability companies (LLCs) and sole traders. For further details, continue reading the article and review the updated Terms and Conditions of the Flowwow Loyalty Program.
The new method is applicable to the following regions and countries: the United Kingdom, the European Union, Turkey, Georgia, Armenia, and Kazakhstan.
New Terms
For clarity, this article will use the following terms:
Promo Amount refers to the total of Bonus Rewards (promo codes and bonus points) that shops receive as compensation for the previous month from Flowwow.
Total Fee Amount encompasses the complete sum of fees charged for the previous month, including:
- Flowwow’s fixed platform fee
- Variable fees, along with additional ones (applicable to order surcharges, if present)
- Other relevant fees outlined in the Public Offer
Additionally, a new entity, Partner Points, has been introduced. These will appear as accruals and deductions in the financial statements.
Calculation Method
The promo amount will be offset when determining the fees sellers are charged for Flowwow’s services, either partially or entirely, depending on its value.
- If the promo amount is 50% or less of the total fee amount, the entire promo amount will be applied to the fees, resulting in no compensation for any promo codes or bonus points redeemed by customers.
- If the promo amount exceeds 50% of the total fee amount, only 50% of the promo amount will be applied to the fees, with the remaining balance credited to you as a bonus for offering Bonus Rewards (such as promo codes or bonus points).
As the calculation method is revised, these adjustments will also be reflected in the financial statements. The financial report on fund withdrawals will outline the details of accrual and deductions of Partner Points.
To help clarify the calculation method and report generation principles, let’s review two examples.
Case #1. The promo amount is 50% or less of the total fee amount
Input data: For August 2024, the total fee amount is USD 50, with a promo amount of USD 10.
Calculation: 50% of the total fee equals USD 25. Since USD 10 is less than this amount, the full promo amount of USD 10 will be subtracted from the seller’s fee for Flowwow’s services.
Financial Reports. Partner Points Accrual and Deduction.
The promo account has a total balance of USD 10. Additionally, several customers may redeem promo codes and bonus points. Each time a promo code is used for an order, the financial report will include an entry labelled ‘Partner Points accrual.’
For instance, if three customers use promo codes with values of USD 2, USD 3, and USD 5, the total will add up to USD 10, as outlined above. The report will display this as follows:
- +2 – points accrued
- +3 – points accrued
- +5 – points accrued
- -10 – points deducted
- Withdrawal – USD 0
As a result, a new entity will appear in the financial report on orders titled ‘Discount on the Flowwow service fee for August 2024.’ In Case #1, the discount shown in the reports will be USD 10.
Simply put, the total amount of compensation from promo codes and bonus points redeemed by customers in August is applied to cover the Flowwow service fee, resulting in no monthly compensation for promotions and lower platform fees, reduced by the value of the promo amount.
Case #2. The promo amount exceeds 50% of the total fee amount
Input data: For August 2024, the total fee amount is USD 50, with a promo amount of USD 30.
Calculation: 50% of the total fee equals USD 25. Since USD 30 exceeds this value, the maximum possible deduction from the total fee amount is USD 25. Therefore, the promo account balance will not display zero as available for withdrawal. Instead, it will show: USD 30 − USD 25 = USD 5.
Financial Reports. Partner Points Accrual and Deduction.
The promo account holds a balance of USD 30, which may include promotions from multiple orders. For instance, it could consist of USD 20 for one order and USD 10 for another. The report will display this as follows:
- +20 – points accrued
- +10 – points accrued
- -25 – points deducted
- Withdrawal – USD 5
Therefore, the financial report on orders will include a new entity titled ‘Discount on the Flowwow service fee for August 2024.’ For Case #2, this will total USD 25, while the sum available for withdrawal for promo codes and bonus points used by customers will be USD 5.
In summary, 50% of the compensation for promo codes and bonus points redeemed by customers (USD 25) is applied towards the Flowwow service fee (offsetting). This means you receive USD 5 as compensation for the promotions while benefiting from a reduction of USD 25 in platform fees.
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