SITUATION: What is the best way to negotiate my commission rate?

SITUATION REVIEW:  Whether you have been offered a new job or you are a seasoned professional that’s looking for a commission increase, the commission compensation model can become confusing. There are some key things to consider when you begin the negotiating process.

SOLUTION: Commission compensation is quite common within the industry, but the type, the amount and structure can vary from salon to salon. Before we begin the negotiation conversation, it’s important that we have a clear understanding of the commission model. There are many variables that come into play when an owner formulates the percentage of commissions that he or she will pay their staff. Typically, the formula is calculated based off of the businesses operating expenses. According to Forbes.com, the salon commission rates range from 35 to 60 percent.  

Commission Structure:

Flat Rate Commission Structure- This is the simplest type of commission structure, the commission rate is established and the amount is calculated off your total service or retail sales. 

Sliding Scale Commission Structure- The commission percent is paid in varying percentages: greater productivity equates a higher percent rate.   

Hybrid Structure- The actual structure may vary, the concept is employees are compensated by hourly/salary and commission pay. 

Now that you have a clear picture of the various commission structures, let’s begin the negotiation conversation. First and foremost, the overall objective should be to design a compensation structure that is not only fair to both the service provider and the salon or spa.  It’s important to keep in mind that the salon or spa is a “for-profit business,” meaning the owner(s) deserve and want to see a profit from their investment. Depending on the business model for the salon or spa meaning it’s privately owned, corporate, or franchise will typically set the tone for the negotiation conversation. When approaching the owner to begin the negotiations, it’s important to show your personal worth and what you bring to the table. Examples include number of guests, service and retail average tickets, referral rates, rebooking rates, advanced technical education, community involvement, and teamwork just to list a few. 

GROWTH OPPORTUNITY: There is no universal pay structure within the beauty and wellness industry and one can easily get caught up on the compensation model or rate. The overall objective should be that a fair compensation plan is created where the service provider and the salon or spa owners both feel valued and they see a return on their investment.   

Photo: Shutterstock | Dean Drobot

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