Are You Earning Fair Commission?

The salon industry has a wide range of options for making money. An acceptable range is anywhere from 35-60%

Why I would not accept more than 60%

  • If the salon/spa owner is not making money – I will not succeed. The owner needs to be able to pay bills, advertise, pay for staff, maintain decor and the list goes on and on. If you are raking in the dough and the owner goes out of business, you’re out of business too.
  • If you’re making more than 50% you should be expected to take on some of the financial responsibilities. Especially marketing yourself and brining in clientele.

It seems like the going rate used to be 50% but since the economic fall out of 2007, salons have tightened budgets as clients do the same. Inflation had caused business owners their blood in expenses. The average salon costs a business owner $10,000 per month to run. These are your average size mom and pop type salons. A business owner needs to bring in that amount just to break even!

Things to consider when agreeing upon commission:coins-currency-investment-insurance-128867

  • What’s included? Rent, utilities, receptionist, janitorial staff, supplies, etc.
  • The location
  • Clientele
  • Prices

Obviously, you want to get the best deal. Try to hit as many marks as you can: Great location, beautiful atmosphere, clientele and walk ins, excellent visibility, opportunities to network and medium to high prices.

Be careful of places that want you to perform more work than you are legally required. If you make purely commission:

  • You do not need to answer phones, do the laundry, clean the bathroom, etc.
  • When you get paid commission, you only get paid for the services you perform and cleaning up after yourself, including sanitizing your room and station. You do not get compensation for anything other than this so you are not obligated to perform anything other than this.
  • For example, let’s say you make 50% commission and only had one pedicure at $50 all day. The owner required you to stay there for 6 hours and had you answering phones and doing laundry. You would then only have made $4.16 per hour which is under minimum wage and is illegal.
  • Again, the owner cannot force you to stay at the salon all day if you have no clients or pay. It may be a good idea for you to stay just incase a walk in, but you are not required to do so. Especially if you are a 1099 or Independent Contractor.
  • If however, the salon agrees to include a base pay of minimum wage plus commission, you are considered an employee and have less freedom.
  • The owners are never allowed to deduct money from your pay check. For example, if a client complains and is unhappy, you still are obligated to earn your standard commission. Even if the owner issues a refund, that is his or her choice and should not affect your paycheck. The best thing to do in this situation, is to offer the client a complimentary fix. For example, if their polish chips the next day, offer to fix it free of charge.

Check out differences for an Independent Contractor (1099)

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