What’s It Going to Cost Me? Many newbies want to know what you will be charged them to “begin” as a home-based travel agent. It’s a relatively complicated question to answer, because everyone is different, with different goals and various needs. I like to say that the initial investment to starting out can range between pocket change to several thousand dollars. But no matter what business you’re in, keeping business start up costs to the very least is quite crucial. Let’s take a closer look. The traditional way to achieve that is to find an agency, a local agency usually to take you on as an outside sales representative.
No money changes hands. You consent to find reserve and clients their travel. The agency agrees to help you to use their IATA number with suppliers and also to gather and disburse commissions for you according for an agreed-upon formula, which is negotiated when you and the agency to draft your contract.
The problem with this scenario is that it can be difficult to find an agency willing to take you on. It’s a little different, of course, if you are an experienced agent with an inside background and (ideally) a following. But even experienced providers will get it hard to find an amenable local company. Another concern (it’s not quite a “problem”) is that the percentage splits offered in this example are typically less than the splits you will get elsewhere. My very first association with a bunch company was under an arrangement such as this and it didn’t cost me a cent.
If you’re interested in pursing this strategy, my home-research course surveys the pros and cons and offers advice on how to “sell” yourself to an agency. I suppose one reason newbies pay a good bit of money to become listed on a host agency is that many new agents don’t know there’s any alternative. They don’t know there are web host agencies that require no charge. They don’t know that they don’t need to ally themselves with a host agency in any way! But there are a variety of very good reasons to consider this path.
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In fact, many experienced real estate agents and even previous agency owners have chosen to start their home-based ventures in this manner. It’s fast. You can be up and running in a matter of times in many cases. You get a much better commission split. I’ve found that percentage splits of 60/40 and 70/30, with no hidden costs, are common with a moderate upfront fee pretty. Commission splits as high as 80/20 are possible (although these deals usually include some strings attached).
Beginners should be leery of 100% payment offers. Usually those deals will only make financial sense to experienced providers who can produce the volume quickly. Convenient It’s. All host agencies – the cheap ones and the expensive ones – perform one very important function for the independent contractor, home-based agent. They manage all the “back-office” functions of running a travel agent, freeing the outside agent to focus on what (theoretically) they actually best – finding and booking customers.