Have you ever looked at the commission you earned on a booking and wondered if it was worth it? I know I have. There are two reasons for low commissions. Either the product price is too low to be worth the work, or the commission rate paid by the supplier isn’t as high as it could be. You do have some control over price of the trip, but not a tremendous amount because your client’s budget is what it is. But you have control over the commission rate paid by the supplier. Really, you do!

So, how do you improve your commission rate? There are a few ways.

Do you have a host agency? If so, then you benefit from the combined sales of the host agency’s ICs. While you might only book $50,000 with a particular vendor, you get commission based on the $1 million in sales the agency makes as a whole. But this means there needs to be a good fit between your host and what you sell. If your specialty isn’t supported by vendors on their preferred partner list, you won’t be getting the full benefit.

Do you have an appropriate commission split? If you are earning the maximum commission from a supplier, you might still lose out by leaving too much commission on the table. It’s amazing how many different commission splits there are out there from 50/50 to 100%. But if you are selling more than $500,000 per year you need to be on a 100% commission plan. Look around and see what options are out there. Most agencies have their commission plans listed on their website. And if your current commission plan is out of line with the norm, talk to your host and see if you can negotiate a new plan. And if that doesn’t work you might need to switch. Remember, this is a business decision – make it from your head not your heart.

Are you working under your own credentials? Then your commission rate is all on you. That rate is based on your sales. That means you either need to be hyper-specialized on a small handful of vendors to maximize your effort, or you could bring on other ICs who have that same specialization to get your numbers up. But the bottom line is that your commission level is completely dependent on you. There is another option: partner with a host agency where you can continue to run your business as you want (you are an IC after all), with your own brand, and earn a much higher level of commission. You could go from 10% to 18% just by joining a host. Even if you aren’t on a 100% commission plan you still make more money because you benefit from the combined sales of their agents.

What about joining a consortium? There are numerous consortia out there that offer a lot of benefits to agencies. But the reality is that your commission is still based on YOUR sales. They don’t just up everyone’s commission level in the consortium based on the total sales of the entire network. You will get some additional perks that sometimes include bonus commission or promotions, but you won’t get an across the board commission bump.

You work really hard for your clients and should maximize that effort to put more money in your pocket. This is one of those times you have to take off your agent hat and put on your business owner hat and look at the numbers. Look at the sales for your top vendor. What if that commission rate was increased by 2%, 3% or even 6%? We see that all the time with agent working under their own CLIA number. They are making 10% or 12% with a vendor and then join our host agency and immediately move up to 15%, 16%, or more!

If you want help looking at these numbers and identifying the cost-benefit analysis, let me know. I’ll be happy to help! Just email me joinus@giftedtravelnetwork.com