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Research > Main Menus of Info > Commission, Hourly, Salary Menu

Note: During 2010, our Groomer Pedia® web site will be continually filled with more info on our research topics. Also, the GroomerTALK Message Board contains similar research info. You can even join the board and ask others! Happy research!
 

 

 


Pros and Cons of Commission Based Wages
 
Commission Versus Salary Wages
  • Employer is only required to pay commissioned groomers for the actual pets they groom.
  • Commission paid groomers usually have no guarantee of how many groomings will be available from day to day, week to week.
  • After paying 60% commission to a groomer, the 40% balance must cover the overhead of the business and can leave very little for the owner. Most employed groomers who think owners are making large profits from the 40% rarely consider all of the overhead expenses, especially employment related taxes which can quickly reduce the 40% to 30% before other overhead costs are deducted.
Analysis: For decades grooming business owners have relied on commission wages to manage their payroll costs. They know that if a groomer can groom 7 pets in a work day, but they can only market 4 groomings a day for the employee, they don't have to pay the employee for 7 groomings. Instead, they pay about 50% to 60% of the actual grooming fees performed. Of course, this is pure logic. Yet it is the numbers that are logical here, but what about the "human factor?"

Please step into the shoes of the employer AND the employee with us. Both other a unique insight into the humanistic problems of commission wages.

If you were the employee, how could you manage your household budget not knowing how much you are going to earn day-to-day with an employer that offers you a commission and an uncertain amount of groomings every work day? That's what it is like for tens of thousands of groomers in the U.S.

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Employees paid by salary have a certain or near certain idea of how much they will make each month, and after payroll tax deductions how much they will "take home." From that they can plan how much net pay they have to cover monthly rent, food, insurance, car expenses etc. Employers instead offering them commission and no salary guarantees can play havoc with a household budget. Slow weeks happen for many thousands of grooming business owners unprepared with advanced marketing training, and what that means is that their commission paid groomers also experience a slow or "low paying" week.

Now what are speaking about here? Stress. Grooming is physically hard work, and then on top of that employed groomers are supposed to worry day-to-day or week-to-week if there will be enough appointments to earn enough commission wages to meet their household bills. Indeed, these employees often have no sick pay or paid vacation either. Stress in grooming? You bet when you work on commission in a business that has roller coaster tides of busy and slow seasons. Worse yet, if you are the new or least senior groomer in a busy expanding business you may get only the groomings the other senior staff don't have time to groom. Where there are 2 or more hired groomers on commission, don't be surprised if the new hire gets the leftovers, or worse, no groomings during a slowdown. Generally, you can kick out the idea of teamwork in grooming in these operations and say "Hello stress!" Most groomers think that this is just the way it is, but it is only in areas where change has not taken hold that benefits both the employer and employees.

Obviously the benefit to the owner paying commissions is that they don't have to guarantee a year round salary. Well, that's understandable. However, it's not a credit to successful management expertise of these worried business owners. There are many ways to market more business, even cost-free ways. Since 1987 we have never consulted with even one, just one, grooming business owner who did not have at least 30% more business in their client base by implementing The Madson Management System in the book, From Problems to Profits. Using the Madson People and Pet Marketing Program in Chapter 12 works wonders, along with support procedures now published in The Madson Pet Reporter. It's magic to many, but just practical management expertise to us. Thousands of readers following the system have proven there is a lot more year round business if they become a "marketing manager." Indeed, pet grooming is gifted with being one of the least affected trades by major recessions. Most pet owners affected by recessions still want clean pets in their houses. A clean pet is not a luxury, it is a practicality and that can be marketed to pet owners as the value of regular grooming. History has proven that true again and again. We endured an eight year serious recession in California and yet our business grew every year, but we marketed aggressively, not expensively. We kept up all salaries too. Many have followed in our footsteps.

Now at least you know some of the major reasons for commissions based on the point of view of employers or employees. Ah, if it were only that easy. Here is a big twist. Many groomers, new to salaries, turn them down! Yes, even if it means they will make the same, and sometimes more, they turn down a guaranteed salary. We have an actual case on record in a client business that is a prime example of this twist. An experienced full-time groomer was averaging about $500 a week gross wages on commission. The owner offered $750 a week on a guaranteed salary. The groomer said she would quit if she couldn't work on commission, and did. This was an experienced groomer who could have never groomed enough in this business to make the $750 by commission even with improvements in productivity. We asked the employee, "Why?" It took some time to get a truthful answer, and it was, "I feel like I am losing control when I work on salary." A few months later she asked for her job back after the reality of her decision became clear.

Yes, there is a lot of psychology involved. Remember, about 70% of all hired groomers one day plan on owning a grooming business. Maybe working on commission makes them feel a bit more independent. Don't underestimate that simple statement, we continue to find more evidence to prove that statement true. Certainly few owners explain that switching to salary doesn't mean you make less if you are following our method in The Madson Management System, Not a penny less ever! Yet, most groomer employees think they will make less on a salary.

Finally, there is an economic reality of which we the world's experts since only Find A Groomer, Inc. has ever perused hundreds and hundreds of financial statements for grooming businesses. In fact, we can only prove what we say here with a few hours of presentation at one of our Workshops and with material available in The Madson Pet Reporter. But here is a fact. In the majority of grooming businesses paying a hired groomer 60% commission, the owner retains about $2 to $4 of their share of each grooming fee after deducting the 60% commission.

For example, the grooming fee is $30. The groomer paid 60% earns a gross wage of $18 leaving the owner $12. From the $12 the owner must pay employer payroll tax contributions for the right to have employees, business insurance, rent, supplies, maintenance, utilities, advertising and many other overhead expenses. Studies have shown that the U.S. national average is for owners to retain about $3 per pet grooming fee where they pay by commission. Remember, the owner still has to pay their personal income taxes on the the $3 before it is their "take home"  pay, and that reduces the $3 to about $1.50 to $2 for the owner.

Paying by commissions makes it very hard for owners and employees to have a good financial sense of how the industry of grooming is best managed. Commission wages are typically based on having an experienced groomer do the chores of bathing, drying etc which can be done by assistants and bathers for much less, and let the master groomer do what they do best, style. So going from commissions to salaries means that both the owner and employee know what to expect to maintain business and household budgets, respectively. We've never converted a business where the commissioned groomer made less, but that's what they all fear. What a state of confusion, and stress, stress, and more stress. In the beginning we said that a lack of business education was one of the biggest problems of the grooming industry, and perhaps now you can see this more with what we have presented here. Actually, these pages are just a brief introduction, and certainly doesn't represent all sides. The next concept to truly understanding the economics of profitable, humane and aesthetic grooming is Madson Team Trimming matched with great salaries, and most full-charge groomers that finally experience it under a great owner-manager see and the feel the difference in their pocketbook, and in their physical well-being. Indeed, commission groomers grooming pets start-to-finish strangely accept the greatest wear and tear on their bodies, start-to-finish grooming. Expert groomers don't need to anything but finish styling, the pure art of grooming, all day. But that's another story.

If you have a continuing interest, please read this important article on commission wages, and consider purchasing our books at www.groomingbusinessinabox.com. That's what many readers have done and they have gone "from problems to profits." They are entering the new school of grooming management step-by-step, and most say they would never go back, and they regret all the years they didn't make changes. They are getting the education that compliments their art of grooming, and no wonder these owners rarely complain of "burnout" and stress, and even tell us "I fell back in love with my business." Education matched with experience is everything! A few hours or days of learning can make a huge change in a 10, 20 or 30 year career, and yet 90% of today's grooming businesses won't attend a "business only" seminar for one day! What more can we say?

Are you going to be "old school?" Are you going to turn your back to at least learning about what others are doing, even if you choose not to follow it? It's not a matter of right or wrong, the choice is yours. As we say, "There's more to grooming pets than grooming pets.™" It's you loving you enough for the wonderful work you do caring for pets. Groom and manage wisely in order to provide a modern managed business for you and your employees that supports mental and physical well-being (something the old school forgot a long time ago).

    

 

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