When Will I See A Profit As A Home-Based Travel Agent?

Where's the profit?

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Here’s a question I got recently:

About how long will it take to see a profit from this business? I am asking for a ball park time frame if you can gauge such.

Hoo boy!

I suppose I could really annoy this person by saying “There’s really no way to answer that question,” which is true enough, by the way.

Or I could say, “Well, it depends . . .” which is also true.

Or I could go all academic and say, “Define your terms.”

But I will try to give as accurate and honest an answer as I can. That may take some time and require liberal use of phrases like “on the other hand,” so please bear with me.

You may not like what I have to say and you may decide, after hearing me out, not to purchase the Home-Based Travel Agent Success Course. That’s fine. I will have done my good deed for the day and I will have saved myself the annoyance of refunding your money when you come to me and say “I didn’t realize it was such hard work.”

(By the way, no host agency you give you your money back because you found out you didn’t like to work so hard. I will.)

What is profit?

First, business profit is defined (very loosely) as sales minus expenses. In most businesses, there is a lot of outgo before the first trickle of sales income shows up and being a travel agent is no different.

The more expenses you pile up at the outset (host agency sign up fees, business cards, a separate phone/fax line, business registration fees, a fancy new laptop for all those bookings you’ll be making, a designer for that killer website you just know will bring in clients) the longer it will take to generate enough sales (and the commissions those sales bring you) to offset all that outgo and create that profit my questioner is seeking.

The novice travel agent who spends a lot at the beginning will take longer to see a “profit” than the one who is more frugal. How do I know which model my questioner will follow?

That is why I counsel caution and prudence at the outset. It is actually possible to find host agencies that will charge no sign up fee, while others charge many thousands of dollars. You can get along for quite a while with the simplest of business cards. Your existing computer will do quite nicely until you can justify the expense of a new one.

In short, I advise that you never spend a nickel until and unless you absolutely have to. As I say plainly on the website, being a travel agent is not for everyone, so it makes a lot of sense to keep your expenses down until you know you’re on the right career path.

The Host Agency Directory, which is part of the course, will guide you to no- and low-cost host agencies.

What are you selling and how are you selling it?

It’s such an obvious point that many people overlook it.

The more expensive the product, the bigger (in dollar terms) the commission.

The smarter you sell, the bigger (in percentage terms) the commission rate.

Put these together and you approach breakeven a lot faster.

This is not to say that should only sell high-ticket items. The important thing is to always serve the needs of your clients.

On the other hand, if you want to only sell budget travel to backpackers, lotsa luck.

The pipeline

In selling travel, a sale (or as most travel agents like to call it, a booking) can happen quickly. For example, a client calls and needs a hotel booked for later this week. Bingo! Sale made.

On the other hand, a client may be planning ahead for a 25th anniversary trip a year or more away. That sale and the consultations that build up to it can take weeks.

But whether the booking takes places quickly or slowly, the commission it generates will only appear somewhere down the road.

That’s because commissions are paid only after travel is completed.

Typically, commissions are due within a month of travel. Then the host agency (if you are using one) has to process that payment before paying you; that can take anywhere from a week to a month. Then there are commissions that “mysteriously” get delayed and you can’t always depend on a host agency to track them down for you.

(Yes, there are situations in which a travel agent can put money in her pocket almost immediately, but that’s an advanced concept.)

So that hotel booking for later this week might result in a check to you in a month or two. The blow out anniversary trip may be booked today but you may have to wait a year and a half to see the commission.

This is what professional salespeople call “the pipeline.” Completed sales go in one end and weeks, months, years later money is deposited in your bank account.

Perhaps you’re beginning to see why I said at the beginning that there’s no real way to answer the question.

But what we can say with certainty is that, if you’re starting your career today, a steady reliable stream of commission income lies somewhere down the road. Some will reach that point sooner than others and some will fall by the wayside.

And some agents will do very well indeed. There are home-based agents pocketing over $200,000 a year!

But wait! There’s good news

So there you have it. No promises of quick riches. As I say on the website . . .

So, if you’re looking for one of those deals that promises “make $2,000 a week in your sleep without selling anything” (Hah! What a laugh that is!), then please do not order this course. If you want to give your money away, at least give it to a reputable charity where it will do some good.

On the other hand, consider this: Every booking you make creates not just a commission, but a customer.

People who travel this year will probably travel next year and the year after that. Some people travel several times a year. They also have friends who travel and they can introduce you to them.

Not only that, but there is a very simple way to turn single bookings into group bookings.

And if you use the travel agent’s equivalent of “you want fries with that?” you can earn anywhere from $50 to $100 extra on every booking!

In short, every sale you make represents not just a single drop of money into your bank account but an ongoing revenue stream that will flow for years. It’s that pipeline thing again.

Remember, those six-figure agents were once where you are today. If you have what it takes to learn the business and make steady progress then you have a bright future.

If that’s not you, then you can thank me for the favor of helping you discover that.

Got a question?

Let me take this opportunity to explain my policy on questions.

I do not have the time to answer questions individually. I have been helping people become home-based travel agents for some twenty years now and I’m pretty sure most questions are answered on the Frequently Asked Questions page or in a blog post.

In fact, the question that prompted this post has been answered before. I simply thought it deserved revisiting.

Which is to say by all means send me questions that you didn’t find answered in the FAQ. I may give only a “see this” reply with a link. I may even get around to setting up one of those automated responses saying pretty much what I’m saying now.

And it may take me a while to respond. After spending all these years helping others see the world, I’m taking the time to see more of it myself.

But I do read all my email and occasionally a question will prompt a blog post like this so that all can benefit from the answer.

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When Will I See A Profit As A Home-Based Travel Agent? was last modified: March 19th, 2016 by Kelly Monaghan