Understanding Vendors, Beneficiaries, and Resellers

One of the most powerful features of Cargo is the ability to create marketplaces by adding additional vendors to crates and also splitting proceeds into specified amounts and distributing those proceeds to specified beneficiaries. Let me give you a couple examples. Say I have used Cargo to create a website where I can sell digital art that I have created. My website has gotten very popular and I want to open it up to other artists to sell their art through my site. This is where vendors come in. These new artists can be added as vendors of my crate. They can create their own contracts and create their own tokens within my crate. For each token they sell I will get a small percentage, known as an application fee.

What is a beneficiary? A beneficiary is a specified address that will receive a specified percentage of a vendor's sale. When a crate is created the creator of the crate is added as the default vendor. The default vendor has two beneficiaries - the crate owner and Cargo. That means that when the crate owner creates a token and sells it using Cargo they will receive 98% of the sale and Cargo will receive the standard 2% platform fee. When you add a new vendor to your crate that vendor would have 3 beneficiaries, you (the crate owner) taking an application fee (default 2%), Cargo (taking the 2% platform fee), and the new vendor (taking the remaining 96%). New beneficiaries can be added and percentages of added beneficiaries can be updated. The total percentage of all the beneficiaries obviously cannot equal more than 100%, so you will likely have to decrease a beneficiary percentage before adding an additional beneficiary.

Let me give you another example of a beneficiary use case. Let's say Lady Gaga wants to sell an unreleased song through Cargo. She tokenizes the song through Cargo. While the song wouldn't exist without her, there would probably be a lot of other people who made the song come to fruition. Those people deserve a piece of the proceeds when the song sells. This can be accomplished with beneficiaries. Each of those people who deserve a cut can be added as a beneficiary and the percentage of what they are owed can be assigned. After they are added as beneficiaries they will automatically receive their specified percentage for each sale of each token created by the vendor they are linked to, in this case the vendor is Lady Gaga.