The great commission debate – do higher percentages really mean more bang for your buck?

If you’re thinking about setting up your own travel business, chances are you’ll have already spent some time researching what seems like a never-ending list of travel businesses to potentially join. And in doing so, you’ll have probably picked up on the varying commission splits that different companies offer – with some businesses offering 100% of the commission they make on their sales.

But is this a deal that’s too good to be true? While it might be tempting to focus on the pound signs, it’s worth digging a little deeper to see whether a more favourable commission split for the business owner equates to a compromise in the quality or volume of wraparound support you receive. After all, setting up and running a business is no mean feat, and even the most seasoned travel professionals need a helping hand from time to time.

Here are some of the key things you should research and compare when deciding if a higher commission split is truly worth it in the grand scheme of things.

Can you control your margins?

While the promise of 100% commission is sure to turn heads, you need to look into whether you have any control over your margins – and if you don’t, what levels are the margins set at?

The smaller the margin, the more bookings you’ll have to make to see significant earnings, even if you’re retaining the full amount of commission.

Are there targets?

Some businesses require you to hit certain sales thresholds before you see any of the commission you make – which again loops back to the question of ‘how many bookings will you have to make to see notable earning potential?’

The next question you need to be asking is ‘how easy does this business make it to achieve these sales targets?’, and ‘are the targets achievable?’. If there’s a lack of product inventory or wraparound support, hitting targets can seem all the more unrealistic.

Where will your customers come from?

When you’re starting a business, it takes time to build up a loyal customer base – and even if you’re already selling travel, there’s no guarantee that your existing customers will come to you on your new venture.

It’s worth checking whether the business you’re considering joining helps you to find customers while you establish yourself - whether it’s providing leads, supporting you with your marketing, or allowing you to collaborate with other business owners.

Are you and your customers protected?

One thing to be certain to check is whether the business offers financial protection. If something goes wrong, is your customers’ money, and your commission, safe? If there are no measures in place, your finances (and your reputation) could be at serious risk. In the world of travel, things don’t always go to plan – from suppliers going bust, to natural disasters, and pandemics. A lack of financial protection can be a costly price to pay.

Have you looked at the hidden charges?

Many businesses pass on merchant card charges, transaction fees, insurance charges, and equipment rental to name a few. All these eat into your commissions and can soon mount up.

Is your ongoing development prioritised?

Travel is an ever-changing industry, and to stay ahead of the competition, you need to have a growth mindset and be committed to learning and development. But how much do different businesses play a part in that?

Are the fam trips that you can join so you can experience products and destinations first-hand? Are you invited to supplier-led training sessions? Are there on-demand training courses available? If the company isn’t investing into your learning and development simply because they don’t take a cut of your commission, you need to question whether the extra money in your pocket is worth the absence of opportunities, and how you will grow your business without this.

Will you receive coaching and mentoring?

Personal, one-to-one support is key when setting up and growing a business, particularly when you’re operating on your own. Sometimes, learning from someone who’s ‘been there and done it’, or having someone at the end of the phone to act as a sounding board and to help you overcome and barriers you’re facing, can make such a huge difference to both your performance and your mindset.

If you’re struggling to get to grips with things, or you’re not feeling great about yourself or your business, the chances are your sales will grind to a halt.

Unless you’re a seasoned business owner who’s used to the ups and downs of entrepreneurship (and the travel industry), we’d highly recommend sacrificing that extra commission in order to receive dedicated support whenever you need it.

Making the right choice

In today’s economic climate, it can be easy to chase higher pay cheques and opt for a travel franchise that lets you keep every penny of the commission you make. And for some people, that option works really well.

However, for others, particularly those who are new to travel or have never owned a business before, the benefits of having wider support and protection in exchange for a cut of the commission far outweigh those extra pounds in the bank at the end of the month.

We always encourage people who are thinking of setting up their own travel business to do their research and get a feel for the different companies out there. A great way to do that is to look at events that each business hosts to help you get a feel for their ways of doing things – such as the Travel Counsellors Discovery Events.

Our Discovery Events, will give you taste of life as a Travel Counsellor, in a no-pressure, no hard-sell environment. We’ve already got several events in the diary for early 2025, so secure your spot today to see how we compare.