Booth rental or commission structure? Major Decisions for stylists
Hair Stylists are constantly evaluating their pay structure and their working environments. Part of this calculus is determining if a commission-based salon or a booth rental salon is the best environment and the most profitable. There are many aspects of each that are desirable and some that are less desirable.
Typically, salons are either commission-based (with some sort of base salary in many cases) or are based on booth rental.
Lots of salons are commission-based, sometimes with a baseline salary. For those that offer a salary, there is some stability of pay, which is great.
Other advantages and disadvantages of commission-based salons for stylists include:
- You will be joining a team, an established salon.
- The brand of the salon and its marketing is the responsibility of the owner.
- Stylists can focus on being a good team member, learning from others, and developing a clientele.
- You will retain a portion of the styling fees charged, and these vary by market.
- You retain 100% of the tips.
- The salon’s supplies are the owner’s responsibilities and their decision reigns supreme as to which supplies are purchased.
- Certain products, however, are the responsibility of the stylist.
- The salon owner chooses the hours for the employees.
- Walk-ins are assigned to a stylist by the owner or the receptionist.
- The salon owner is responsible for maintaining the books, not you.
- You have to be certain you fit in with the team, that the brand represents you and you represent the brand.
- Salary and commission-based salons may offer health insurance and other benefits.
Booth rental is a totally different system. Stylists pay a weekly booth rental and are a renter and not an employee. Other aspects of this system:
- You keep all of the fees you set for your services as well as tips.
- You are not an employee, so you set your own hours.
- You don’t get paid for days you don’t work, but you typically are responsible for booth rental fees, even during vacation and holiday time.
- You have to market yourself and build your own brand. You can accessorize, decorate, create collateral and use social media as you see fit to develop yourself and attract clients.
- You may develop collegial relationships with the other renters, or you may not.
- You have to pay for your own product.
- Booth rental fees vary by the amenities, including front desk staff, coffee service, location, etc.
- You may have to make your own appointments and you will have to keep track of expenses and revenue yourself.
- Walk-ins and referrals may be plentiful or negligible, depending on location and reputation of the salon.
There is no right answer.
Stylists have to consider where they are in their career. Often, beginning stylists who have not yet developed a clientele need the support of a commission, team-based system with a recognizable salon and brand. Stylists with established, loyal clientele may select a booth rental system and retain a higher percentage of their fees.
It’s imperative that the ultimate business arrangement is in writing and all expenses are clearly defined from product to commission to base salary to booth rental.
Most importantly, stylists need to select not just the payment structure but the salon that meets their needs. The location, the vibe of the place, the interaction among the team players, even the expectations for selling product: all of these need to be clear to a stylist prior to signing the dotted line.