All of our transactions (when you purchase from the draft report) disclose a royalty rate which is a percentage of some financial bottom line such as sales, profit, revenue, etc. The “Royalty Base” is displayed at the upper left corner of each abstract.

The royalty base (net sales, sales, gross sales) that we use in our database comes from the individual source documents that we obtain. We do not capture the details of the royalty payment other than the gross measure such as sales, profit, etc. because each license defines the royalty base differently. This means you would need to track down the source of information in order to understand their interpretation of the royalty base.

We view sales and revenue interchangeably. In other words, sales of product generates revenue for a company. However, the source of the sales or revenue depends upon the business activity of the licensee.

Each license defines how "Net Sales" or "Net Revenue" are measured, but both imply that some amount is subtracted from the gross amount of "Sales" or "Revenue." Below are some examples of the items/costs subtracted from the sales measures.

1. import, export, excise and sales taxes, and custom duties;
2. costs of insurance, packing, and transportation from the place of manufacture to the customer's premises or point of installation;
3. costs of installation at the place of use; and
4. credit for returns, allowances, or trades