Small Salon - Realistic Commission Goals

SunnyO · 06-22-2005, 11:10 PM

I have a 6 bed salon with all 3 employees each working about 23 hrs./week. I wanted to do a 10% commission on lotion sales totaling a minimum of $300.00/month. Does this even sound possible? Is the monthly goal too high?

BigLeo · 06-23-2005, 12:19 AM

SunnyO,

I would never pay 10% commission on lotion sales. Instead, establish a performance-based commission structure. Reward employees based on a set monthly quota and make sure they adhere to it. Sell, sell, sell every opportunity you have to existing and prospective customers. If they meet their quotas, I would pay between 2.0% to 3.0% commision on total sales. Example: If the quota is $15,000 per month and the associate does $20,000, you could pay 2.0% if they exceed the quota by $5,000 and 3.0% if over $5,000. The idea is to establish monthly and annual sales goals for the salon. Commissions are particularly important during the low season in order to generate revenue. Remember, indoor tanning is a seasonal business so keep this in mind when establishing your sales goals and quotas. Good luck to you.

Leo

mr belvedere · 06-23-2005, 01:16 AM

I would suggest a "spiff" type bonus schedule to incent your employees to sell more retail product. Maybe a buck or two per unit sold on your $40 and under stuff, and $5/unit on the high end product. Maybe a $10 spiff for every package sold over a hundred dollars. Packages under that price point are really self-promoting, so I wouldn't pay an associate a bonus for those purchases. Goals are good, just make sure they're reasonable, attainable, and the employees have the "tools" that they need to have a chance at reaching them. Good luck.

angelcat04 · 06-23-2005, 10:24 AM

We set a monthly goal for the store. Usually 10% higher than what we did last year. If we don't hit it then no one gets commision. If we do hit it (and we always do(
Then I pay commision as follows: minimum $200 in sales to receive commision

$200-$500 = 4%
$501-$1000 = 6%
$1000 and up = 10%

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Questions for Max Recone of California Tan	CHUNN	Open Forum	26	09-20-2006 02:29 PM
Big salon owners vs Small salon owners	Soakinuptherays	Salon Management	40	06-04-2005 01:04 AM
\"Contract for Salon Owners\"	Ezliving_Jim	Open Forum	4	06-17-2002 01:15 PM
Lastest scam from the cheap clients...	MJ	Salon Management	26	04-23-2002 03:59 PM
Being a \"tanning salon professional\" isn\'t gender specific!\"]	Don Smith	Salon Management	44	04-18-2002 09:41 AM

06-22-2005, 11:10 PM	#1 (permalink)
SunnyO Join Date: Nov 23 2004 Posts: 112 Rep Power: 5	I have a 6 bed salon with all 3 employees each working about 23 hrs./week. I wanted to do a 10% commission on lotion sales totaling a minimum of $300.00/month. Does this even sound possible? Is the monthly goal too high?

06-23-2005, 12:19 AM	#2 (permalink)
BigLeo Join Date: Jan 27 2005 Posts: 243 Rep Power: 4	SunnyO, I would never pay 10% commission on lotion sales. Instead, establish a performance-based commission structure. Reward employees based on a set monthly quota and make sure they adhere to it. Sell, sell, sell every opportunity you have to existing and prospective customers. If they meet their quotas, I would pay between 2.0% to 3.0% commision on total sales. Example: If the quota is $15,000 per month and the associate does $20,000, you could pay 2.0% if they exceed the quota by $5,000 and 3.0% if over $5,000. The idea is to establish monthly and annual sales goals for the salon. Commissions are particularly important during the low season in order to generate revenue. Remember, indoor tanning is a seasonal business so keep this in mind when establishing your sales goals and quotas. Good luck to you. Leo

06-23-2005, 01:16 AM	#3 (permalink)
mr belvedere DERFERATOR Join Date: May 10 2005 Age: 39 Posts: 8,592 Rep Power: 52	I would suggest a "spiff" type bonus schedule to incent your employees to sell more retail product. Maybe a buck or two per unit sold on your $40 and under stuff, and $5/unit on the high end product. Maybe a $10 spiff for every package sold over a hundred dollars. Packages under that price point are really self-promoting, so I wouldn't pay an associate a bonus for those purchases. Goals are good, just make sure they're reasonable, attainable, and the employees have the "tools" that they need to have a chance at reaching them. Good luck.

06-23-2005, 10:24 AM	#4 (permalink)
angelcat04 I love Derf!! Join Date: Jul 26 2004 Location: Texas Posts: 1,923 Rep Power: 6	We set a monthly goal for the store. Usually 10% higher than what we did last year. If we don't hit it then no one gets commision. If we do hit it (and we always do( Then I pay commision as follows: minimum $200 in sales to receive commision $200-$500 = 4% $501-$1000 = 6% $1000 and up = 10%

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)