Which commission structure works best for you?
When entering the advanced cosmetic field, it is important for both business owners and permanent makeup artists to know the ends and outs of employee rates. At the Academy of Advanced Cosmetics, our expert professionals have compiled a variety of scenarios to assist business owners and cosmetic professionals with employee salary and payout rates. This article is designed to assist with frequently asked questions and our formula on commission vs. salons suites vs. business partnerships.
Let’s just say a busy spa offers a cosmetic position (Miroblading, Permanent Makeup, Paramedical Tattooing, Lash Extensions) and they have guaranteed clientele and provide marketing. It is recommended that a rate of 60% of the overall earning goes towards the busy spa and 40% of the artist. In this case, the artists would not be responsible for supplies, insurance, and full marketing; the hiring business would cover this. Should the busy spa require the artist to maintain insurance costs, it is suggested to negotiate 45%(spa), 55% (me). In some cases, 50/50 payout works. As an artist or business owner, it is important to determine a rate for the service which should factor average procedure time, supply costs, insurance, touch ups etc.
If an artist is working for a business and is SOLEY aims to build their own clientele through conducting his or her own marketing, this is considered a partnership and the artists are classified as an independent consultant who will receive a 1099 tax statement. AAC recommends a compensation agreement based on commission on the artist revenue from the procedure they perform only. This commission rate would favor the artists more as he or she will put more work into gleaning clients and for providing notoriety to the business/brand. The artists can negotiate his or her hours and days of service based on their bookings.
Negotiating employment terms and job duties is always important for both the artist and the business owner and should be an agreement that benefits each party. It is important to note that If the business CANNOT provide admin support, some marketing, and clientele, then the artist can command a higher commission rate and would be responsible for generating new clientele. Business owners can set sales goals for the artists. It is ok to negotiate insurance fee costs and in many cases, business owners may opt to provide a monthly/annual insurance stipend. The artist who develops a partnership with businesses can also ask for key access and a stipend for any additional (tattoo) licenses annual fees or education assistance. With any partnership, the artist is solely representing the hiring company brand, location, mission, website, booking system etc.
Many advanced cosmetic professionals have opted to work in salon suites as a sole proprietor. This option has several benefits such as freedom to maintain and operate your own business as you see fit. With freedom, there is a COST. As an entrepreneur, it is the responsibility of the artist to maintain and manage all operations, marketing, payments, insurance and more. The best part about being an entrepreneur is setting your own business rules and taking your brand in a direction you see fit.
Academy of Advanced Cosmetics recommends a new artist to continue to develop their skill set so that the can command a high commission rate. Rates should ultimately reflect an artist skill set, expertise, and experience. For someone who is just starting out, he or she may consider working with an established business to let them do the hard work of getting clients and marketing.
Always keep in mind that ARTISTS IS VALUABLE. Artist has spent a lot of money, time and research on education, supplies, branding and much more. Business owners have worked hard to build their brand and reputation and ultimately is financially responsible for their practice. This should also be considered in the negotiation process. Both business owners and artist should keep in mind that SKILL will speak louder than words. Spas and other businesses look for the best and will pay for the best. LET WHAT YOU CAN DO BE YOUR BEST NEGOTIATOR.
Have you heard of the Academy of Advanced Cosmetics training courses? Visit aactraining.com to learn more about their courses and how an education at AAC can benefit your career and business endeavors.