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Posted By:BTCAdmin on: 9/3/2004 4:24:39 PM


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Author: Thread: Product Cost Deduction Before Commission?
AntiAnon
Posts: 4

Posted: Monday, August 23, 2004 12:22:00 AM
Would I be wrong in assuming that if an esthetician is working on commission (say 50%) that the half that the salon takes is used to cover all overhead, including product costs?

My manager wants to implement a product cost deduction, before the commission goes into effect. So, say I do a service for $100 dollars. The salon could take $10 off the top for product cost and then split the remaining $90, leaving me with a 50% commission of $45 dollars.

I feel as though product cost is something that's already being covered when the salon takes their cut up front. Does anyone else's salon do anything like this?

Anonymous

Posted: Monday, August 23, 2004 7:58:00 AM
No mine does not but if this is happening make sure you tell your employer that you need reciepts so that you can claim your products on your taxes! This usually changes their tune. Basically they are making double the money on that product if you think about it!

Anonymous

Posted: Monday, August 23, 2004 8:33:00 AM
Salon owners are making nothing when they are paying commission. If a stylists gets 50% so does the salon
50% minus
7.25% social security
unemployment insurance
shampoo staff/ receptionists
worker comp ins
electric
water
beverages
so on and so
The product charge is a way to get more money without having to reduce commission.

statikman
Posts: 617
Silver Member

Posted: Monday, August 23, 2004 9:36:00 AM
Anon 7:58
The employer does not need to issue a receipt in this case because they are not deducting a fee from your pay. They are deducting the cost before even calculating your end of it, so there is nothing to complain about. If they were taking ten dollars off of your commission at the end of the deal rather than the beginning, then your advice is valid. My old employer got into trouble that way.
I am thinking about implementing this pay structure with all my new hires, as it makes alot of sense to me. Why would the emplyee get more than half the take right off the bat? To soften the blow, the salon should raise the price of the colour service.

Anonymous

Posted: Monday, August 23, 2004 7:23:00 PM
I agree statikman. A raise in price sounds reasonable. Modern Salon said that inflation went up 4% this year!

cricket
Posts: 74

Posted: Tuesday, August 24, 2004 12:08:00 AM
I own a salon that is booth rent only. In fact where I live commission salons are almost unheard of. Are you living in a large city?
Commission sounds like a real headache.

statikman
Posts: 617
Silver Member

Posted: Tuesday, August 24, 2004 4:23:00 AM
Where do newbies work? Who apprentices them and trains them for booth rental salons to snatch them up once they're built?
It's not a real pain if you want to own a company. I suppose it's a little tougher than being a landlord, but the upside can be great. Seeing new talent develop and prosper is incredibly rewarding.

W&T
Posts: 127
Bronze Member

Posted: Tuesday, August 24, 2004 6:09:00 PM
For me this just puts stylists another inch closer to self employment. Not saying it is right or wrong. But I think salon owners make rental too easy an alternative after they chip away at the paycheck. it gets to the point where there are no good reasons not to be self employed. I know that all salons are different as to what they offer a stylist so maybe for some it is perfectly justified. But others have an establishment where stylists can just feel if they had a bowl and a mirror and a chair they can charge the same money in rental and be better off. The principle makes sense but to me being more creative with the budget and payroll and avoiding direct product charges is better. Salon owners spend way too much precious energy feeling that the cost of running a business is unfair. All businesses with employees have the same expenses and supply costs. Business costs are the owners responsibility just like the employees personal expenses are their problem. Once you start blurring that line, employees will eventually cut out the middle man, once and for all.

Anonymous

Posted: Tuesday, August 24, 2004 6:48:00 PM
When I first opened my salon I didn't have product charges. When I started seeing color bowls in the sink with unused color in them, it mad me think twice. I tried bringing up the waste issue at meetings, nothing changed. So I put a fee for all chemical services($3.00), which is only a $1.50 after commission. I still saw color waste but when I told them their product charge would go up if it continued, the waste stopped. I don't make anything off of it, it isn't even enough to pay for a half of tube. It is simply there as a reminder to stylists that they are paying, so don't waste.

AntiAnon
Posts: 4

Posted: Tuesday, August 24, 2004 11:38:00 PM
Thanks for the interesting points of view...

However, I am not a stylist/colorist, I'm an esthetician. So, what I'm being charged for is the cleanser, exfoliant, and mask that I'm using during the course of a facial. We're talking a quarter size amount of 4 products, tops! Her back bar cost for one bottle of cleanser is a little less than ten dollars. I can probably use that one bottle for 100 facials. She's charging me $4 right off the top of every facial... it seems to me that in the end I'm buying all of my own back bar - and that isn't the way commission is supposed to work.

Cricket - I work in the suburbs of Boston. I'm not sure how popular booth renting is with estheticians around here, all of the girls I know from other spas get paid commission or hourly.

AntiAnon
Posts: 4

Posted: Tuesday, August 24, 2004 11:42:00 PM
BTW, Anon August, 23 8:33 am -

I feel as though charging us a product cost is a way to reduce our paychecks without actually having to say she's lowered our commissions. I'm definitely losing money when it comes right down to it.

cricket
Posts: 74

Posted: Wednesday, August 25, 2004 12:31:00 AM
Thanks for all your points of view. As for the newbies they usually just start out booth rent and everyone helps them out with any questions etc... I live in northern Nevada and I'm not sure about the Vegas area salons. They probably are a mix of both rent and commission is my guess.
AntiAnon (I like your name by the way) the estheticians I know are all booth rent. It runs 400 to 500 a month for a sylist and 250 for a manicurist in this area. Not sure about estheticians.

Also I need to apologize and make a name change. I didn't realize there was already a user named cricket. How about Hairy cricket?...lol That kinda makes me sound male though. Any suggestions?

statikman
Posts: 617
Silver Member

Posted: Wednesday, August 25, 2004 9:06:00 AM
AntiAnon, you use more than just cleanser for a facial, right? She is not trying to do anything other than do a straight 50-50 split. If the commissions are below 50%, then I'd question it, but there are alot more costs associated to a service than you think. If you're facial prices are too low and this is taking more than 10% off the top though, you may need to approach her about a price increase.

Anonymous

Posted: Wednesday, August 25, 2004 2:38:00 PM
What kind of cleansers are you using that only cost $10.00? That sounds very cheap.
Most of our back bar cleansers are at least thiry dollars. And when it comes to other products they are usually around sixty for professional sizes.

Most of the skin care companies have a recommended charge for their facials, and they also have a product cost associated with it. It is usually from $4-$8.
Like static said, there are alot of other fees involved.
How much are you charging for a basic facial?

Anonymous

Posted: Wednesday, August 25, 2004 6:54:00 PM
Anti Anon

It's actually a matter of mathmatics. At the rate you're going, you are a commissioned worker. You need to break down how much money you are losing and compare it to what you would be spending in another arrangement. IC or booth rent or even another salon. You might find you are actually paying more to be an employee than you would to be self-employed. Say you were doing 60 facials a week, that's almost $1000 in product charges a month and minus 50% of the remainder. If you find that being an employee is equal or more expensive than self-employment, it's time to look at all your options.

I would advise you to get out there and get some figures so you can evaluate the situation. Better to do that now than wait til later.

AntiAnon
Posts: 4

Posted: Thursday, August 26, 2004 10:28:00 PM
Cricket -

I wouldn't go with Hairy Cricket! How about Pretty Cricket or Happy Cricket? When I was little my grandmother had a poodle named Cricket! How about Curly Cricket? :)

JD
Posts: 1350
Platinum Member

Posted: Friday, August 27, 2004 10:26:00 PM
I like curly cricket.. cute. :)

alesia
Posts: 1920
Platinum Member

Posted: Saturday, August 28, 2004 1:20:00 PM
How about chirpy cricket?
sounds like a cute cartoon character.:)

robertomadera
Posts: 7

paying for client ticket
Posted: Thursday, January 26, 2006 10:54:10 PM
I am at 47% commision cut, products are provided to me. The salon that i work for has a client ticket charge of 2 dollars per total client ticket.. now because I double book i pay 4 dollars per client ticket to utilise an assiatant to apply my base color and then i am required to tip the assistant at the end of the day, is that fair
? what do you think

mina2
Posts: 432
Silver Member

Posted: Friday, January 27, 2006 8:26:47 AM
$2 for an assistant THAT IS CHEAP!  Yes, I think it is very fair.  You should tip the assistant at the end of the day- especially if they work their butt off for 2 bucks while you get the service $$ and you didn't even do the application...

scissorsnip
Posts: 22

Posted: Saturday, January 28, 2006 10:27:18 PM
OK, I have to ask... If the assistant applies  your color, which is (in my opinion) the most important part of the color process, then the only thing left for you to do is rinse it, correct? Im not sure what you charge for a color, but I get 60. and the cut is extra on top of that.  It generally takes me 20mins to apply, 25-45 to process, and 10 to rinse it... so it seems to me that your assistant has spent more time with your client than you have.  $2.00 is a steal !  Im gonna have to hire me an assistant!!

ditzlitz
Posts: 26

Posted: Thursday, February 16, 2006 8:33:45 PM

AntiAnon-I'm an aesthetician in Nashville,Tn. I work for a salon that pays 50% comm. I'm not charged any kind of product usage charge or anything as far as I know of....I would'nt at all like have 10$ taken off but then again I am new at this so I don't know how right or wrong that is...however I can say that so far I havent heard anything like that before. BTW how much is a facial?? mine is 75$

Robertomadera--That is exactly the way my salon does their whole assistant tipping thing...however I yet again have not heard anything about this whole "client charge" of 2 and what not dollars per ticket.....

scissorsnip--In the salon I work at...the highest stylists...or as we call them "artistic directors"(we are a teared(sp?) pricing level thing so some ppl are more expensive that others) the highest ones will use an assistant to shampoo....do base color....rinse the base color....and brush them out.....and if they dont want a blow dry or style...thats it!! Alot of them times the client never even sees the stylist they are there for...maybe for like 5 mins to discuss what color....i really think its unfair that they get paid for what the assitant does....even tho the stylist takes the tips out there paycheck....it still isnt near equal to the 50 split they stylist made.....but its worth checking into for your sake...


-Nicole-
Debbie Lee
Posts: 1

Product charges before commission
Posted: Thursday, October 23, 2008 7:44:04 AM
I have just been hit ith this after 3 years.  We have no benefits and no vacation pay its like a slap in the face
russnyc
Posts: 1051
Platinum Member

Deductions
Posted: Friday, October 24, 2008 3:49:40 PM
Deductions are part of doing business, especially where rents or utilities can run high.

One wonderful thing about this arrangement is usually when you're paying a high deduct AND it is a large staff, you have a lot of help and are able to take two or three times the workload of clients.

As a colorist, if I had to color & shampoo 10 clients, I'd be burned out by the end of the day.

I have one dedicated and one salon assistant to rely on shampooing. I also have two or three other assistants I can call upon for a blowdry. So therefore I could feasibly take 30+ clients a day.

Let's all not forget all these people tip as well!

geminigigi
Posts: 11

yes to product fees..
Posted: Wednesday, January 12, 2011 8:48:56 PM
It is the industry standard to have product fees. And as long as it's not coming off BEFORE commission is figured. We aren't "charging" the Stylist, we are giving them a percentage for doing the color (the labor), not for the total the labor and the product fee. And we sit down with the Stylist and ask them what they want to charge for their services. We don't do a product fee for Haircuts or a Blowdry because there is not product being used (we don't charge for shampoo, cond etc. we pay for that)
FOR INSTANCE..
A commissioned Stylist gets 50% of the LABOR to do the service not 50% of the labor and cost. So here's what we do...we figure out what each person is going to charge for say, a root touch up..then we add $5. to that. then we take it off the top and then figure the commission.
So if "Jane" wants to charge $7o for a root touch up.. we charge the client $75 for the service.....then when we do payroll we do the commission on the $70 "Jane" said she want to charge... the color fee comes off the top and goes into the $900 a month color order bill...we would pay the salon $35 and the Stylist $35
If we didn't do it that way, we'd just have to pay the stylists a lower commission. If you explain it to the Stylist, that they are not being "charged" for anything and they are being paid a percentage of the labor. AND if the client has a ton of hair, they are subject to an add'l $15. color fee and of that $10 is labor and $5 is for the extra color. This way the owner isn't fuming mad if there's extra color being mixed and thrown away and the Stylist isn't fuming because they aren't making less. It's a fair way to do it because the Stylist is still getting paid for what they want to charge.
If you go to get your car worked on and they fix your caborator..they don't say oh it's $350 for every carborator job...no, they say, it was 3 hours in labor and $375 for the part and so you pay $725...The way I look at it it's the same thing.
So sit down with your employees or owner and tell them, this is the amount I want to be paid commission ..... and then the salon just bumps up the price the cost of product.
For a facial..same thing. If you want to charge $80 for a facial and you use $5. in product to do a facial Charge the Client $85 take the $5 off to pay for products and figure commission out of the $80.
This works really, really well. The owners take 50% and pay about 10% in employment taxes (do you know they have to match what you pay for social security and sdi?) another 3-5% for workers comp and then there's advertising, receptionist, bottled water, electricity, magazines, toilet paper, cotton, gloves, At the end of the day, if the stylist's share is $35, they will take home about $26 after taxes..and of the salon's $35, they will get about $15 after their taxes and misc detailed above.
And besides, what other job can you do where you will make $35 for an hour and a half??? I know a lot of people that are fighting to score a $10 an hour job!!! we should all be really grateful! Life is GOOD!
This is really a fair way to do it...Trust me the owner is NOT making a profit on the color fees!!! Seriously, we spend $900-$1200 a month in color alone and we're NOT that busy yet. But we do recover the cost of the color and are able to make a tiny profit on the labor and keep the doors open and make sure 8 people are employed and take home a paycheck.. As a working Owner, I still only make 50% just like my team and I've yet to have a profit check. People, I promise you, no one is getting rich by charging a color fee..the most standard profit for owning a salon is 10-14% that's a hella lotta work for in my case maybe $18k in PROFIT..I make 50% of my services and it works out to about $18k a year in profit to the salon. Not the business to get rich in!

doinhair
Posts: 24

product charges
Posted: Friday, September 09, 2011 12:43:48 PM
I would like to reply to this discussion. I am a commissioned stylist in the state of Maryland. My cut is 55 percent and it is $10.00 for every color service and $20-25 for straighteners etc. Wake up stylists! In the state of Maryland the labor board clearly outlines as a commissioned stylist you are an employee and ALL products that you need to perform your job are to be supplied by the employer. PERIOD POINT BLANK END OF DISCUSSION!! As far as the owners go I really get upset when i hear them complain of the lack of money they make on having commission stylists. It was not my idea to open a salon i shouldnt have to pay for it. If you can't afford to open a salon don't open one. I plan on following up with the labor board!

Brevan
Posts: 2

deductions before commissions
Posted: Tuesday, November 20, 2012 6:15:18 PM


Brevan
Posts: 2

Posted: Tuesday, November 20, 2012 6:30:42 PM
HELP ..HELP .... HELP...
I have read and read and read what do I do. I have commissioned employees. I started a salon that I was kinda thrown into very quickly (thats the short story) the pricing I did not change. now I am into this 6 mths and realize color is a huge huge downfall in price with employees. For instance on one color service we charge
$75--- they get 50% =37.50 and salon gets37.50 then 16.50 is the product cost to perform this service. then leaves salon with $21.00 then I have to re-buy the product again for 16.50 or more. which leaves the salon with 4.50. what is wrong with this pic what do I do? so that it is not the right thing to pass this along to the guest. Especially if you are in a small town. what next is there a formula to this madness. I have tried and tried to search for a solution and I don't see anything concrete. Help!
Anyone have an answer.
Brevan
pixanne
Posts: 1058
Platinum Member

Posted: Tuesday, November 20, 2012 8:02:37 PM
That is why owners charge a product fee off the top for each chemical service. My employer takes $5 off the top then i get my 50% , it isn't the best scenario but i am happy that we have high quality color and stocked shelves. Another thing i noticed is that 16.50 is a huge amount of money for a single process, how much color are people using? How much is the color per tube?

melstan1
Posts: 340
Silver Member

Posted: Tuesday, November 20, 2012 10:32:49 PM
I think it's shady to be "charged" a product fee. If you're an employee, you're an employee, and it's the salon's job to stock the shelves. 50% commission is a huge ammount in any salon. I'm a renter and I only pay myself 40% of my sales. The rest is for expenses, supplies, taxes, etc, and once in awhile I don't owe Uncle Sam as much as I've saved, so I might end up with a bonus at tax time.

You're only six months in to your new salon, might be time for a price and pay restructure. Lower your commission pay rate to 40% to cover the costs of your supplies, and stress selling add-ons to make your stylists more productive. Major change is good when a new owner comes on board anyway, as it signifies "out with the old, in with the new."

Yes, you will lose stylists, but that is just how it goes and in the end you will have more money in your pocket to grow your own business, so you can eventually offer more pay and incentives again. In the meantime you can recruit new stylists who are not familiar with the old pay system, which will limit the complaints.

pixanne
Posts: 1058
Platinum Member

Posted: Wednesday, November 21, 2012 6:18:35 AM
I would walk out the front door if my boss cut my commission by 10%! It is the norm in my demographic to place an up front product charge on chemical services. So there aren't any salons that don't do it, and the price varies greatly, some charging 10 or more per service, which is absolutely insane. The only way to institute new commission is to start with new stylists and grandfather the established money makers so you don't lose them. Btw chair rental is illegal where i live& work, so commission is the only method of payment unless someone goes for an hourly chop shop job. It means employers get creative to find ways to pay less commission without actually coming out and cutting the percentage.the price of products has definitely skyrocketed, and in order to have good lines available, we need to give a bit. I don't like making less but i understand why it must be done. It works out because if i don't do color i still make 50%, and if i do color it's only 5 dollars off the top which is not equivalent to 10%.

melstan1
Posts: 340
Silver Member

Posted: Thursday, November 22, 2012 11:57:05 PM
pixanne I understand what you are saying about wanting to walk if your pay got cut. No one likes to have their pay cut, but it's normal in most industries to occasionally fluctuate pay and/or bonuses as the market dictates. By your own admission product has gone up. A lot. The color I use has gone up 79 cents and the developer a dollar this year. It's up by two dollars over what I paid for it five years ago. It just is what it is.

Perhaps a better solution is to increase service prices a little bit to cover some of the cost of the product say by 5 dollars. That would preserve income, but still, if you're going to do that, then a 5% deduction in pay. I know it sucks but it is a fast way to cut a huge expense. It's just a suggestion, some will walk some will stay.

Where I live you have three choices - rent, pay 40% to a salon where you are an independant contractor who still has to buy his/her own stuff, (which is still rent but with no cap), or work in a chop shop for an hourly. I just rent. It's slower some times then others, but I feel its the best bet for me.



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