Hello, Annual income in this example is based on 50% commission. My commission rate is 30%-45%. . How will I explain this to my stylists? Thank you, Laurie
Annual income in this example is based on 50% commission. My commission rate is 30%-45%. . How will I explain this to my stylists?
Great Question! The percentage commission you are paying at 30%-45% is spot on and reflects a good range that allows stylists to earn more based on productivity, seniority and experience etc as well as for the salon to meet all it’s overhead and make a profit. The numbers and percentages used throughout the course are purely used to illustrate a point. Some salons pay commission rate at a flat percentage, others pay a staggered percentage. Some commission rates are at 20% and occasionally you will see numbers as high as 60% [in which case the salon isn’t making anything and is probably running at a loss] In some of the videos I mention that I am using numbers purely as a example and say that I will often use 50% simply for ease of maths.There are many factors to consider when setting commission levels including; Is the commission on top of a base wage? If so at what point does commission start? What other benefits are you paying e.g. Sickness, Holiday Pay, Paid Vacation, Pension fund, Paid education, Is there a product or salon surcharge? … All of these and more will impact on what is an effective commission system that allows the salon to recruit and attract good people level, meet all the business overhead and still allow the business to run at a profit.