Compare livestream contribution when commissions and returns change
Align return windows and compare creator fees, returns and attributable costs across two livestreams.
One livestream has higher sales, while another carries a higher commission rate. Which is worth repeating? Compare both over the same after-sales observation window, reconcile actual returns, commissions and costs under each contract, then compare contribution attributable to the session. Gross sales, platform receipts and final company profit are different measures.
This guide is for operators and finance teams of mainland China ecommerce businesses. It addresses a management comparison, not revenue recognition or filings under a particular accounting or tax regime. All figures below are illustrative; adjust them to the goods, platform, settlement terms and fulfillment arrangements.
Make the sessions comparable first
- Align attribution and the observation window. Define the orders, channel attribution, measurement basis and after-sales cut-off for both sessions. For example, observe each order for 30 days after delivery. That is an assumed comparison window, not a statutory return period. Mark a session as provisional if its window is incomplete or after-sales requests remain unresolved; a refund not yet recorded is not proof that no refund will occur.
- Align transaction amounts. Distinguish paid orders, cancellations, completed refunds and discounts borne by the seller. Show platform- or creator-funded subsidies separately; do not automatically treat every subsidy as the seller's revenue. Link cross-period refunds to the original order and do not deduct a refund again from a settlement that is already net of it.
- Check the commission terms. Use the contract, platform rate and settlement statement to establish the commission base, timing and whether commission is returned after a refund. Distinguish a fixed placement fee, sales commission, advertising and other service fees. Some agreements charge on pre-refund amounts and others settle on post-refund amounts; the same percentage cannot be applied without checking.
- Count each cost once. Match goods retained by customers to product costs. Check whether returned goods can be resold and who pays return shipping, repackaging and damage. Determine whether platform deductions already include advertising, service fees or refunds. If allocating shared costs to sessions, explain the basis; an allocation is not necessarily a new cash payment caused by a decision.
A like-for-like illustration
Assume each session has 100 paid and shipped orders, priced at RMB 100 per item excluding VAT, with a product cost of RMB 40 per item excluding VAT. Both are reviewed 30 days after delivery of each order, and all after-sales requests in this example have been completed; later returns may still occur. Assume returned goods are intact and resalable, so product cost is counted only for goods retained by customers and return shipping is shown separately. Fees are simplified amounts excluding VAT; other fees, subsidies and taxes are omitted.
| Item | Session A | Session B |
|---|---|---|
| Sales before refunds | RMB 10,000 | RMB 10,000 |
| Completed refunds | RMB 2,000 (20 orders) | RMB 1,000 (10 orders) |
| Sales after refunds | RMB 8,000 | RMB 9,000 |
| Cost of goods retained | RMB 3,200 (80 × 40) | RMB 3,600 (90 × 40) |
| Creator commission | RMB 1,600 (net sales × 20%) | RMB 2,700 (net sales × 30%) |
| Placement fee | RMB 1,000 | RMB 500 |
| Advertising | RMB 500 | RMB 500 |
| Outbound shipping for all orders | RMB 500 | RMB 500 |
| Return shipping | RMB 200 (20 × 10) | RMB 100 (10 × 10) |
| Illustrative session contribution | RMB 1,000 | RMB 1,100 |
The example assumes commission is based on sales after refunds and the commission attributable to refunds has been returned; real contracts may differ. Contribution is 8,000 − 3,200 − 1,600 − 1,000 − 500 − 500 − 200 = RMB 1,000 for A, and 9,000 − 3,600 − 2,700 − 500 − 500 − 500 − 100 = RMB 1,100 for B. On these assumptions and listed costs, B has a higher commission rate but RMB 100 more contribution; this does not establish that every future session will perform the same way.
These are not accounting profit, after-tax profit or a final cash balance. They exclude the company's full shared costs, refunds after the window, possible damage and other taxes or fees. If returned goods cannot be resold, assess actual recoverable value under the applicable accounting regime. If commission is not returned after refunds, recalculate it; the comparison may change.
Use the comparison for the next decision
Separate amounts already incurred from unresolved refunds and fees. Where helpful, calculate scenarios using explainable assumptions, keeping forecasts distinct from actuals. For the next session also consider expected order volume, creator availability, inventory, available cash and alternatives. A fixed placement fee is not automatically irrelevant: it is relevant when it will actually be added or avoided by a choice. ACCA's explanation of relevant costs explains the principle. Separate sunk, unrecoverable costs from future avoidable costs, and do not omit fees that would be paid again.
Continue with product contribution after returns and advertising, or see the operating-profit example. The example illustrates an approach and does not mean your platform data is connected. To discuss products and services, use the contact page and share records through an authorized channel.
Written with AI assistance. Examples illustrate analysis methods; apply them using business records and relevant conditions.
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