How to pay commissions internationally?
I am looking for a way to handle payouts to authors living both in and outside of the USA. I heard about Paypal Mass payments but are there any other better alternatives to pay commissions internationally?
Thankful for all input!
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You could also take Skrill into consideration. BTW. If you're going to pay people from abroad, make sure that you meet all legal requirements, which means that you know whether they can be employed in the US or whether your company can employ them under their local regulations. I myself run a company in the UK, and am going to employ people from Poland. They will promote my services and get commission on what they sell. They'll be working under the Polish law, and therefore I'm obliged to sign all agreements IN POLISH. If I signed the agreements in English, I'd break the law. – Lukeshek 12 years ago
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But how does it work if people upload files on my website and I sell it on their behalf and pay a 50% commission? Do I really need agreements and such then? What is Skrill? – Jonathan Clark 12 years ago
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Skrill is Moneybookers. They're currently changing the name. You can use Skrill to pay people their commissions. I'm not 100% sure about the law in the USA, but generally speaking you always need some sort of agreement, if you're company is going to pay people any money. If you didn't need an agreement, then why not just pay yourself this way and forget about all insurance and taxes? There are websites that pay commissions to people from all around the world, and I'm sure there is a sort of legal agreement your US company could implement. – Lukeshek 12 years ago
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I'm not able to advise you on this issue, but I can only tell you how this would look like in my case. I'll sign an agreement with a Pole, and the agreement will be in Polish, and he will have to pay 18% tax, and will get 20% of the tax back. If I signed a licence agreement, then he could claim 50% tax back, and I wouldn't have to sign the licence agreement in Polish. – Lukeshek 12 years ago
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I think if you're going to sell their files, then you would sign a licence agreement. You would sell their stuff and pay them commission. In my case I'll be paying people for promoting my website, and therefore the licence agreement doesn't apply. I'm sure someone else here will be able to help you and explain how licence agreements work in the US. – Lukeshek 12 years ago
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@lukeshek this should be an answer – Karlson 12 years ago
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How about SWIFT transfer.. – Sachin Shekhar 12 years ago
2 Answers
You could try Bitcoin Essentially, your authors provide you with a Bitcoin address (trivial for them to acquire using any free and open source Bitcoin client ) and you keep track of whatever they have earned in your local currency as part of your business.
When the time comes to make payment you buy some bitcoins on an exchange at the current spot rate and send them to their address. This process is easily automated. They get their money within 10 minutes anywhere in world. It works for any size transaction from fractions of a cent up to millions of dollars (depending on the exchange rate and overall market capitalisation) and has extremely low transaction fees (typically less than a cent for several hundred dollars).
There are more details in answer to another question about it here: http://answers.onstartups.com/a/37087/5259. Or you can visit the Bitcoin main site.
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Anyone care to explain the -1 for this? It's a proven way of making international payments to individuals. – Gary Rowe 12 years ago
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FYI, they can setup automated purchase of local currency, in order not to be exposed to fluctuations in the Bitcoin rate. See also https://bit-pay.com/ – Ripper234 12 years ago
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Well, finite millions really. Barring significant changes to the exchange rate, maximum theoretical current payment is around 40 million, and making such a payment isn't really possible since you'd have to be in possession of the entire market cap to do it. But for the type of payments the original asker wants, it's totally viable. – Bob Aman 12 years ago
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@BobAman Fair point, not many authors are going to get $40 million in commission. Have edited accordingly. – Gary Rowe 12 years ago
Run your affiliate program through one of the major affiliate networks, like Commission Junction or ShareASale. They've been handling paying international affiliates for longer than your business has existed, so let them deal with it and absolve yourself of all the many tax complications involved in making payments yourself.
