I'm not sure I fully understand the above --- in this example, is "Merchant" the marketplace Owner/Operator and "Vendor" the party owning and shipping the item?
Vendor gets everything EXCEPT what MERCHANT is eligible to retain.
No, actually the reverse. The MERCHANT retains everything except what is provisioned to the VENDOR.
Assume payment payment processor takes 3% of the $119.55, so leaves $115.96
The whole point of payment surcharge is to account for the payment processor transaction fees. There is no way to know what those fees are from the cart and can vary depending on monthly volume, etc.
Okay, here's an example:
CUSTOMER purchases 1 item from VENDOR A for list price of $100.00
Shipping is $10.00
MERCHANT offered a 'catalog discount' of 25% on the $100.00 item
There is a Shipping Freight setup for $5.00
And there is a payment transaction fee of $5.00
And tax is $5.00
The CUSTOMER total is 100 - (.25 * 100) = $75.00
Plus shipping: $10.00
Customer sees $25.00 discount shown on the item line of the product purchased in their order summary
Plus shipping freight: $5
Plus payment surcharge: $5
Plus Tax: $5
CUSTOMER TOTAL is $100. This is the payment amount received by the merchant (store owner) from the order (not that payment processor fees are not included).
Assume a commission setup as follows:
Vendor Commission 30%
Catalog Discounts -> Vendor (to compensate for merchant marketing choices)
Cart Discounts -> Vendor (to compensate for merchant marketing choices)
-- Note that the above items for Vendor are at the commission rate and below are full amounts
Shipping -> Vendor
Shipping Freight -> Merchant
Payment surcharge -> Merchant
Tax -> Merchant
So in calculating the commission for the vendor it becomes:
$75.00 (products minus catalog promotion) * 30% = $25.00
Catalog discount $25.00 * 30% = $7.50
Shipping = $10
Total to pay vendor: 25 + 7.5 + 10= $42.50
Merchant (store owner) retains everything else ($57.50)
Note that if the "Merchant" were designated to receive the catalog discount above, then the whole $25.00 of the discount would be deducted from the Vendor's commission (payout) leaving the result as Vendor: ($25 + $10 - $25) $10, Merchant gets $90.00.
As you can see, assignment of promotions can radically change commissions/retention.
Most of this is pretty straight forward except for the handling of discounts (I.e. money goes in one bucket or another). The concept is that if the merchant creates a discount, the vendor shouldn't be penalized for it. And if the vendor requests the merchant to apply a discount, the merchant shouldn't get penalized for it.
Note that there are basic issues in MVE that should be addressed within the core:
1) Taxes - The merchant shouldn't be responsible for taxes and they shouldn't be the one to setup/maintain taxes (since local could drive you nuts). Taxation should be by Vendor (products and shipping) and the Vendor should control what taxes are applied and should then receive the tax amounts from orders.
2) Catalog discounts should be available to vendors so they can advertise promotions on the Merchant's site without the Merchant having to manage them.
3) The companies.balance page is a mess and makes no sense to anyone who runs a business. The "period" is actually a "date" and not a period. The Amount should be the amount due as commission on that order, not the order total, etc.