I got asked the other day about the way we pay our beauty therapists commission. So, I thought I’d share what we do (and why) and also other ideas I’ve heard of that incentivise young women who are beauty therapists.
Fair Commission Structure
The first beauty salon commission structure I came across was in 2010 when we bought an existing salon. The idea was that as soon as a therapist had covered their cost, a commission of 10% on sales kicked in. This was gross, ie. on all treatments performed and products sold.
But, after a couple of years I realised something. The people rocking their sales didn’t really get the benefit, and, all the therapists who wanted to coast, could AND still earn commission.
Rewarding The High Earners
So we changed it. We brought in a two-tier structure.
Now there are two important parts of this. The first, is to keep the system as simple as possible because (a) the therapists will need to understand it and (b) you will have to manage it.
Secondly, you need to calculate your numbers.
From our sums, I worked out that a therapist could earn around £40 per hour for the salon. Multiply that by a working week (38 hours) and you end up with the number £1520.00 worth of potential sales.
Also, I know that a therapist + room costs me in the region of £15 per hour. Again, multiply by 38 hours and you get £570.00.
So, to keep things simple, we devised a commission structure to encourage beauty therapists to reach that little bit higher. It’s based on treatments AND retail sales.
We tell our therapists that £1,000 per week is their sales target. As you can see from the earning numbers above (£40 per hour), if a therapist is two thirds utilised, this is more than do-able for them.
The following commission structure is based on the treatments the therapists deliver and the retail sales made and is calculated weekly:
- From £0 – £500 = No commission
- From £501 – £1000 = 5% commission
- £1000+ = 20% commission
- Sales of £500 or less = £0.00
- Sales of £750 (5% of £250) = £12.50
- Sales of £1000 (5% of £500) = £25
- Sales of £1200 (5% of £500 + 20% of £200) = £65
- Sales of £1500 (5% of £500 + 20% of £500) = £125
Our high performers regularly do sales of £1200 – £1400 per week each and are reaping the rewards and someone once did £1800 with a commission of £185.
I have also heard of some salons that give attendance bonuses to ward off the “24 hour sickness bug” that seems to happen a lot. IE. If you work six months with no sick days, you get a bonus.
Whatever bonus or commission structure you implement in your salon, it needs to work for you financial AND (very importantly) it needs to be worthwhile for your therapists to earn more money based on the money they are making you.