Dropship Fee Calculation

If you turn on 'Compute Fees' in the 3PL / receiver side of the Teapplix account, Teapplix can help compute the fee that the receiver account should charge the submitter account for each order that is submitted. The fee can have the following components:

  • Product Cost - if on receiver account the product.default_cost is filled on all the items in a submitted order.
  • Transportation charge + markup
  • The handling charge for the SKUs
    • here we have first qty vs additional qty specific charge
  • The packaging charge for the SKUs
    • here we have first qty vs additional qty specific charge

Transportation + markup is based on the actual shipping from the receiver account. Markup is driven by the markup table. You can configure 'Dropship Markup' on the settings page.

Markup Model
Markup can be fixed value or a % of postage rate or 0$ if related record not found. Markup can be based on weight only, or by filling in 2 optional qualifiers: ship_carrier, ship_method. When multiple markup record applies, the 'more specific' ones will apply, with the below 'precedence':

  • submitter account
  • ship carrier
  • ship method

The precedence is needed because normally, you can use '__DEFAULT__' to fill in the value, which will cause the record to apply to all values. However, if a specific match exist, then it has more weight than __DEFAULT__ record.

At any time for a given order, a single markup record is used to compute the markup. If no markup record is found that matches, then no markup is applied.

We use an example to illustrate rules, let's say we have 2 submitter accounts: subA and subB, and we have the following markup model

account carrier method weight range markup
__DEFAULT__ USPS __DEFAULT__ > 1lb 10%
subA __DEFAULT__ __DEFAULT__ > 1lb 8%

when subA submits order, for > 1lb will use the 8% model, for other weight, because subA is in the markup model, but no other records exist, it will have no markup.

when subB submits order, since no subB specific model exist, it will use __DEFAULT__, and since USPS is mentioned, for USPS will use 5% for parcel select, and 10% for rest. For all other carrier, will try to use __DEFAULT__ carrier which means no markup here.

Fee Model

Fees (packing and handling) is a fixed value that would be added for an each item in an order. Because an order
can have multiple items, it is more complex in terms of how many fees are applied to an order:

Again we look at fees with the first order of priority:
. submitter account vs __DEFAULT__

We operate under the principle, that if there are records that specifically name a submitter account, then only
records with matching submitter account names are applied. Otherwise, only records with __DEFAULT__ are applied.
We will never apply to a single order, records from both 'specific submitter' fee record + other records with

The next level of fee calculation is based on item_sku. Before this is done, the order line items are cleaned up
and multiple lines with the same item_sku are merged together. Then, we could have different settings:

. specific value

The way fees apply
1) specific item_sku value --> the rules will always apply to these items
after such rules are applied, these items are removed from item list for
further fee consideration

2) __DEFAULT__
the rest of the items are treated togeher as a single qty, regardless of
how many order lines, then we apply first vs next to compute fees

The final fees are sum of 1) and 2) for a given order.

We illustrate this by an example

fees table content:

item name first next
A 0.10 0.05
__DEFAULT__ 0.05 0.01


  1. line 1: A x 2
  2. line 2: B x 1
  3. line 3: C x 2
  4. line 4: A x 1

for this order, the fee will be computed like this:

A: qty 3: so fee will be 0.10 + 0.05 * 2

rest of order: total quantity 3

fee will be 0.05 + 0.01 * 2

Total Final Charge

The final Transportation Cost (including markup + any accessory charges) + Handling and Packing Costs + Product Cost (if configured) are charged to the submitter account as part of the submit order. Notice that this charge is a virtual 'charge' as no money change hands. It simply is a journal entry in "Dropship History" page. The charge is considered done when the order is submitted, regardless of if the receiver ships the order or not, or if the shipper uses a different service to ship the order.

Canceling an Order

If receiver cancel the submitted order without shipping it, Teapplix will reverse the dropship charge by adding an adjustment entry.

Running Register

Each submitter account has a running register managed by receiver, on Order History->Dropship History page. Receiver can add an initial balance, and any manual 'recharge' or 'adjustment' records on the "Received Payments". This establish a virtual 'balance' for each submitter account. Submitter cannot submit any order that will result in the balance to reach below 0.

Postage Meter Mode

Teapplix can switch certain dropship accounts into 'Postage Meter Mode". In this mode, when submitter submits an order,  their Teapplix Postage Meter balance will be deducted with the charge for the order.  And receiver account Postage Meter will be credited with the same amount.

The charge would include postage + markup + handling + packing fee,  depending on the dropship account setup.  The postage will be calculated based on the rate on the receiver account.

Currently this mode requires special Teapplix approval, so contact Teapplix Support for details.