diff --git a/abase-commands.lua b/abase-commands.lua
index 0d30b87..c580d77 100644
--- a/abase-commands.lua
+++ b/abase-commands.lua
@@ -1,6 +1,52 @@
 -- New commands to be executed via Aseprite menus / keyboard shortcuts
 local sprt = require "abase-sprite"
 
+local BASE_COLOR = Color {
+    r = 0,
+    g = 0,
+    b = 0,
+    a = 0
+}
+local IGNORE_COLOR = Color {
+    gray = 100
+}
+local IGNORE_SUBCOLOR = Color {
+    gray = 150
+}
+local MERGE_COLOR = Color {
+    r = 200,
+    g = 200,
+    b = 0
+}
+local MERGE_SUBCOLOR = Color {
+    r = 200,
+    g = 200,
+    b = 128
+}
+
+-- set the color of a layer and its sublayers
+local function setColor(layer, subColor)
+    if (layer.properties(extKey).ignored) then
+        layer.color = IGNORE_COLOR
+        subColor = IGNORE_SUBCOLOR
+    elseif subColor == IGNORE_SUBCOLOR then
+        layer.color = subColor
+    elseif (layer.properties(extKey).exportedAsSprite) then
+        layer.color = MERGE_COLOR
+        subColor = MERGE_SUBCOLOR
+    elseif subColor == MERGE_SUBCOLOR then
+        layer.color = subColor
+    else
+        layer.color = BASE_COLOR
+    end
+
+    if (layer.isGroup) then
+        for i, sublayer in ipairs(layer.layers) do
+            setColor(sublayer, subColor)
+        end
+    end
+end
+
 local function ExportSpritesheetAdvanced()
     if not app.sprite then
         return app.alert "Must have a sprite open to export."
@@ -26,6 +72,7 @@ local function ToggleIgnore()
     else
         layer.properties(extKey).ignored = true
     end
+    setColor(layer)
 end
 
 local function ToggleExportAsSprite()
@@ -35,6 +82,7 @@ local function ToggleExportAsSprite()
     else
         layer.properties(extKey).exportedAsSprite = true
     end
+    setColor(layer)
 end
 
 local export = {
@@ -42,4 +90,4 @@ local export = {
     ToggleIgnore = ToggleIgnore,
     ToggleExportAsSprite = ToggleExportAsSprite
 }
-return export
\ No newline at end of file
+return export
diff --git a/readme.md b/readme.md
index cbd2e60..fd792e4 100644
--- a/readme.md
+++ b/readme.md
@@ -19,7 +19,8 @@ To install, go to Aseprite's Settings -> Extensions -> Add Extension, and select
 
 ## Additional Notes
 
-* Toggling the advanced export settings on a layer will modify the layer colors. (This may be configurable in a future update)
+* Toggling the advanced export settings on a layer will modify the layer colors. If you are using layer colors for other purposes, this extension will not work well for you. (This may be configurable in a future update)
+* Ignored layers always take precedence over merging; if a sublayer in a group is ignored, it will not be merged into the final sprite.
 
 
 ## Copyright Notice