Things That Make You Go "Hummmmm"
Personally, I will freely admit that I would be upset as well. I've actually been on the "short end of the stick" in another industry as a Regional Manager, and simply could not compete with one or two of the giants in that particular industry. In order to get the business, I either had to provide some sort of price match, reducing my margin of profit, or create a level of service to my clients that they felt warranted the extra cost to them.
In both cases, profit margins are created based on volume. While I was able to move our buying levels up several levels with my former company, I was never able to reach the highest levels these giants reached based on the product I and my sales team were able to move. With YTB, I've noticed that most all of the supplier commissions have actually increased over the years, based on quotas and the volume of product YTB has been able to achieve as our level of RTA's increase.
Bottom line is this: YTB has EARNED those commissions. As a company, YTB books a ton of travel with these suppliers.
In addition, YTB does not receive any type of co-op dollars for advertising with any of the suppliers we work with. Many suppliers such as Sandals will help defer advertising costs to an Agency to help them promote their particular product. This type of investment works well with many Agencies and builds Agent loyalty to actually sell supplier product and services. If you were to ask what type of return on this investment a supplier would expect, I wouldn't have the first clue, honestly. Any risk of loosing money on such an investment with YTB is none existent with our model however.
We're all familiar with the Roaming Gnome right? How do you think everyone knows about this goofy munchkin? Because Travelocity pays millions in print, TV, and radio advertising each year to put that character in front of you. I've heard all kinds of numbers as to just how much Travelocity spends per day or per year, and while it's in the multiple millions, it's unimportant exactly how much. It has been stated that companies like Travelocity, (Orbitz, Expedia, Priceline.com) spend at least 60% of the revenue they generate in commissions, back into advertising to acquire more travel customers.
Back in 2005, Priceline.com came to YTB and offered to pay us a commission on everything we booked with them. Now why would they offer to pay a bunch of untrained, unqualified, unregulated bunch of Yahoo's in YTB commission instead of relying on someone like William Shatner?
The answer is simple, they don't pay YTB until after the travel has been sold and therefore control their cost. Priceline pays nothing for our "word of mouth" advertising, and 100% of the money paid to YTB is for actual product sold. You can't guarantee that type of return with any other form of advertising. Not even to Captain Kirk.
In the background during this time, WorldChoice also partnered with YTB for Hotels. (A division of Travelocity) When the contract was up with Priceline.com a year later and it was time to renew, a bidding war irrupted between the two company's as to who would be the "default vendor" of choice. Worldchoice ultimately won out the bid and YTB's relationship with them has been stronger than ever since winning the bid.
Suppliers and vendors pay no advertising, co-op dollars or marketing for YTB to sell their product, paying only for what is actually booked and consumed. But they're being told they aren't getting their money's worth?
I've been given examples from the other side, either through comments or personal e-mails why YTB paying these top commissions to us doesn't work. John gave an example of the nonexistent gas jockeys who use to pump gas. The majority of the lions share was paid from actual gas they use to pump. Or Geico paying local agents a small percentage of the commission for insurance for policies made on line.
John also gave a very good example about Sandals who offers an affiliate program. The local Bait N Tackle shop can put a Sandals Banner on their site. If a Bait N Tackle client clicks on the banner, it tags the source and the booking is handled by Unique. Just like YTB. The difference is that the Bait N Tackle Shop gets (and he's going on memory here so it may not be exact) 1% of the commissionable rate. THAT is the difference.
Now to be fair, I think I first stated that this next quote came from John when we first met here on my Blog. He has since told me that this was not his comment. This statement does however happen to be thrown up in our face by many a "Travel Agent".
"Why would I want to be YTB to earn 60% commission of 13%, when I now earn 80% of 16% and higher? Stupid. Ya'll keep drinking your Kool-Aid."
See how that works? They tease that we only make 60% of the commission, while they make 80% when it services them. But complain that it's not fair we make that commission and we don't deserve it because we don't service our customers the way they do. It's one of those "Catch 22" comments I find all too often from those that oppose YTB or MLM in general.
Maybe the Bait N Tackle shop should leverage itself and become an RTA with YTB? It's not the 80% these Professional get, but it's a far cry better than 1%.
Just part of the things that make you go "Hmmmmm".
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Doug & Ronda Bauknight
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Labels: Agent Discount, John Frenaye, Sandals, Travel MLM
But you still didn't answer the base question. Why stay with a company that only pays you 60% when you can go with someone else that will pay you anywhere from 80%-100%, unless the draw is the money made from recruitment?
Posted by
Ainsworth |
Thursday, December 20, 2007
Ainsworth;
If you’re happy with making 80% or 100% all by yourself, more power to you. But what happens if you don’t work?
You don’t get paid.
The biggest draw for me is the leverage created in this model. I receive a 10% override on all bookings made in my Power Team. If I train them right (which I’m doing) they create bookings that I don’t even touch but still get paid on. If I train just 6 people to do what I do, I replace my travel commissions without doing any of the work. If I train 10 people to do what I do, I in essence make 100% commission…without doing any of the bookings myself. It’s called “passive income” and anyone who wants to create true financial freedom not only understands how this works, but strives to create this create this type of income.
You call it “recruiting”, I call it building a “sales team”. I offer a turn key system to others who want to work spare time, part time, or full time. I have hundreds of staff at the home office for support of this team, including commission tracking, payment, and documentation. All for under $50 a month which is reimbursed to me each month because I have a large enough team in place.
It’s a MUCH smarter, far more efficient, and considerably less expensive than any traditional methods I’ve been introduced to making 80% to 100% commission all by myself.
Posted by
TravelPro |
Friday, December 21, 2007
I'd like to comment on this statement: This statement does however happen to be thrown up in our face by many a "Travel Agent".
"Why would I want to be YTB to earn 60% commission of 13%, when I now earn 80% of 16% and higher? Stupid. Ya'll keep drinking your Kool-Aid."See how that works? They tease that we only make 60% of the commission, while they make 80% when it services them. But complain that it's not fair we make that commission and we don't deserve it because we don't service our customers the way they do. It's one of those "Catch 22" comments I find all too often from those that oppose YTB or MLM in general.
After studying YTB and answering skeptics of YTB for almost 2 years, here's why a traditional travel agent would want to be YTB to earn 60% commission of 13%, when I now earn 80% of 16% and higher: YTB has multiple streams of income. I've counted 11 of them. Here's how to leverage your travel commissions potential with YTB:
1) 60% is just the base starting commission point for all RTAs.
2) Recruit a minimum of 4 RTAs and when you have a total of 7 no matter who recuits them, then you will start earning 10% of the travel commissions of everyone you sponsor from now on.
Simply stated that means you earn 60% from all travel you book plus 10% of all the travel from people you sponsor starting from the 7th person. If you have recruited 10 people after your 7th, you will earn 10% of 10 people's travel commissions.
If any or all of those 10 people earn $1,000 in travel commissions their first year, you earn $500 each time. Then, If any or all of those 10 people earn $5,000 in travel commissions their first year, you also get paid $5,000 each time.
Then you also earn 50% of the commissions they earn as they recruit new people.
Those are just a few of the reasons why "travel agents would want to be YTB to earn 60% commission of 13%, when they now earn 80% of 16% and higher? Stupid. Ya'll keep drinking your Kool-Aid."See how that works?
Posted by
Anonymous |
Friday, December 21, 2007
Same thing can be done by either owning your own agency, or by working with a host agency that allows you to have sub agents. The difference is that you don't make bonuses by suckering others into buying a website.
Posted by
Ainsworth |
Friday, December 21, 2007
It’s called a “Business Investment” Ainsworth, and I don’t sucker anyone into YTB. I give them enough information to make an informed, educated, business decision, and collect an answer “yes” or “no”.
You make it sound as if anyone could start up a Travel Agency Business for little or no money. As with any business there is an investment. Some are lower like Magellan360 with just $300, while Cruise Planners requires $10,000 for their setup and “web site”. (Okay…ONLY $9,995)
If I wanted Sub Agents in Nexion, like I do in YTB it would cost me $499 (6-9 Agents under me) plus $39 per month per agent.
These plans may work for others, and I’m sure they do. I’m not looking for employees however. I’m looking for other like minded “Business Owners” who are willing to invest in themselves like I am.
Posted by
TravelPro |
Friday, December 21, 2007
Thanks for clearing that up for me... :(
1) 60% is just the base starting commission point for all RTAs.
2) Recruit a minimum of 4 RTAs and when you have a total of 7 no matter who recuits them, then you will start earning 10% of the travel commissions of everyone you sponsor from now on.
Simply stated that means you earn 60% from all travel you book plus 10% of all the travel from people you sponsor starting from the 7th person. If you have recruited 10 people after your 7th, you will earn 10% of 10 people's travel commissions.
If any or all of those 10 people earn $1,000 in travel commissions their first year, you earn $500 each time. Then, If any or all of those 10 people earn $5,000 in travel commissions their first year, you also get paid $5,000 each time.
Then you also earn 50% of the commissions they earn as they recruit new people.
Posted by
John |
Friday, December 21, 2007
John:
That's accurate, however the 10% override is not limited to people you personally sponsor. (Bonuses are however.) The 10% override consists of everyone in your Power Team, regardless if you've personally sponsored them or not.
I have a number of Power Team members who are very deep in my Power Team, but are very productive in earning Travel Commissions.
Posted by
TravelPro |
Friday, December 21, 2007