Hi all,
the following problem is a real world problem I'm having which I could use some help with. It's about an e-commerce company which publishes revenue for a specific country. But this revenue stems only in part from their own sales. Another part is a fee for offering the sales platform to third parties (usually 10%). I would like to know the complete turnover they made (own sales plus third parties, i.e. the gross merchandise value), a figure they usually don't publish.
I found an analysis online that uses a factorized multiplication to calculate the actual turnover. But I don't understand how the authors arrive at their factors. I have asked but am still awaiting response and my hopes are not very high. They use:
1.5625 for a 40% third party share
1.8181 for a 50% third party share
2.1739 for a 60% third party share
2.3095 for a 63% third party share
e.g. for 2 bn USD in reported revenue and a 60% third party share, the analysis authors would calculate:
2 bn USD x 2.1739 = 4.3478 bn USD total site turnover.
I can't seem to find a formula for calculating these factors nor do I understand the reasoning behind them. If 60% of the reported revenue is fees from third party sellers and this fee is 10% of the sales value, shouldn't a better approximation be something like:
T = R x 0.6 x 10 + R x 0.4
where R is reported revenue, T is total turnover.
I agree that my formula probably blows the turnover way out of proportion, but I would like to understand where the error is in my thought process. Maybe some of you can help and also help me with a formula for the factors used by the study authors. For a different country I'd like to calculate the values with a 84% third party share in revenues.
Thanks for reading!
the following problem is a real world problem I'm having which I could use some help with. It's about an e-commerce company which publishes revenue for a specific country. But this revenue stems only in part from their own sales. Another part is a fee for offering the sales platform to third parties (usually 10%). I would like to know the complete turnover they made (own sales plus third parties, i.e. the gross merchandise value), a figure they usually don't publish.
I found an analysis online that uses a factorized multiplication to calculate the actual turnover. But I don't understand how the authors arrive at their factors. I have asked but am still awaiting response and my hopes are not very high. They use:
1.5625 for a 40% third party share
1.8181 for a 50% third party share
2.1739 for a 60% third party share
2.3095 for a 63% third party share
e.g. for 2 bn USD in reported revenue and a 60% third party share, the analysis authors would calculate:
2 bn USD x 2.1739 = 4.3478 bn USD total site turnover.
I can't seem to find a formula for calculating these factors nor do I understand the reasoning behind them. If 60% of the reported revenue is fees from third party sellers and this fee is 10% of the sales value, shouldn't a better approximation be something like:
T = R x 0.6 x 10 + R x 0.4
where R is reported revenue, T is total turnover.
I agree that my formula probably blows the turnover way out of proportion, but I would like to understand where the error is in my thought process. Maybe some of you can help and also help me with a formula for the factors used by the study authors. For a different country I'd like to calculate the values with a 84% third party share in revenues.
Thanks for reading!