One of the main considerations for anyone weighing up the homeworking options will be commission. What can I earn with homeworking company A compared with homeworking company B?
So, investing a minute or few delving into how travel homeworking commission works is important…..
….especially as first impressions don’t always provide the full picture!
Most Travel homeworking companies offer a commission split based on the net profit on a booking. For example, book a £1,000 holiday at a 12% margin with a £20 discount applied and the net profit on that booking will be £100.
The homeworking company will retain a % of that £100, and the homeworker will be paid the remainder. The % amounts retained and paid will vary across the homeworking companies with commission levels on sales made by a homeworkers to one of their own customers generally higher than if the sale is made to a customer generated by the marketing efforts of the homeworking company itself.
“In that case I will earn more as a homeworker booking my own customers, right?” Well no, not necessarily!
To get the true picture you need to look deeper and throw your time, the cost of marketing, the value of each sale, and net profit margins into the mix.
Time is money! It takes time to find customers and it costs money. To generate the number of enquiries needed for you to do enough in sales to make your work rewarding you are going to have to spend upfront. Whether that is on social media marketing, joining networking groups, taking ad’s out in your local press, sponsoring or running your own local events.
And even if you are super smart and resourceful and manage to generate decent numbers of customers without spending much money, that will take time. Time that if invested working on enquiries generated for you free of charge by your homeworking company partner would be time spent selling and earning instead!
Now let’s look at how the type of holidays you are selling can affect your earning potential. The average sale in most travel agents is around £2,500 at a net margin after discount of 10%. So, a net profit of £250.
Whereas, when you partner up with a homeworking company that provides leads from customers looking for upmarket long-haul holidays, you can expect an average sale value more like £5,500 with net margins likely to be around 11%. That produces a net profit of £605.
Or £355 more in profit per booking!
It doesn’t take a genius to work out that even if as a travel homeworker with a higher commission split on sales you make to your own customers, once you take time, cost and the kind of holidays you will be selling into account, you will actually earn more money selling holidays to parent company leads……so long as those leads are orientated towards upmarket holidays with a higher than average sale value, like those at Holidaysplease.
The fact of the matter is that you will need to do roughly twice as many own customer sales with a homeworking company that does not provide leads even though they offer a higher commission split, than if you were selling to the upmarket long-haul leads we generate free of charge at Holidaysplease for our homeworking team.