This article explains the agency pricing calculations for each agency commission type dropdown option. To learn how to select a default option for an agency, see Creating an agency. To add the agency to an itinerary, see Adding an agency to an itinerary.
Within the agency record, the Default commission setup section has 4 agency commission types to choose from:
- Calculate commission from gross.
- Calculate commission on top of gross.
- Agency adds markup themselves.
- Overwrite supplier markup.
The first and second options require you to define an agency commission percent based off your Gross prices, whereas the third and fourth options require you to define an agency commission percent based on the Net price.
Agency commission settings at a glance:
| Setting | When to use this setting |
| Calculate commission from gross | When you have an agreement with an agent to pay them a set amount of commission and want to pay this as a split of your usual margin. |
Calculate commission on top of gross | When you have an agreement with an agent to pay them a set amount of commission and wish to keep the usual margin from an itinerary for yourself. |
Agency adds markup themselves | Perfect if you are offering your agent the same net rate that you usually offer to direct travellers, and allow the agencies to add their own markup before onselling to the traveller. |
| Overwrite supplier markup | Overwrite the standard Supplier markup with an Agent markup. Offer your agent an agent net that is based on Net + Agent markup. |
What’s the difference between agency commission, margin and markup?
The primary difference between agency commission and markup is that markup is added to the purchase price whereas commission is deducted from the sale price. Margin is the value of the profit relative to cost and revenue. Let’s look at some key pointers:
- Markup % is the ratio of the profit made to the cost paid. It is always added to the purchase price
- Agency commission % is the percentage based renumeration paid to the sales agent. It is always calculated from the sale price, and not on the purchase price
- Margin $ is the dollar value difference between the purchase price and the sale price
Calculate sale price using markup %
The markup is added to the purchase price to calculate the sale price. So, if you wish to markup the purchase price by 20%, you will add 20% to the purchase price directly. Let’s say your purchase price is $1000. The sale price after adding the 20% markup would be:
- $1200 + $1000 x 25% = $1500. (Markup is 25%)
Calculating margin using commission %
To calculate the margin (agent commission) using commission % we use a very basic calculation revolving around percentages. Just take the sale price, multiply it by the commission percentage, and divide it by 100.
- $1500 x 20% / 100 = $300 (Commission is 20%)
More information
- Commission type options Agency adds markup themselves and Overwrite supplier markup activate the agent markup field in the itemised pricing table. Whereas the options Calculate commission from gross and Calculate commission on top of gross activates the agency commission field.
- The total agent price displays at the bottom of the itemised pricing table, however, unlike the net, markup and gross fields, the total agent price, total agent markup % or agent commission % cannot be edited.
- The agent price, agent markup or agent commission % cannot be locked individually for each row, as they are actively calculated based on other figures in the row. However, selecting the Lock all option from the Options menu (three dots at the end of the row) locks all agency pricing fields along with the other pricing fields.
- On adding an agency to an itinerary, the agent pricing columns are based on the fields the selected agency commission type of that agency at that time and the values in the existing pricing table.
- Fields that are edited or locked prior to adding an agency, will remain locked or edited.
- On removing an agency from an itinerary, the agent pricing columns are cleared, the edits and locks of net, markup and gross, will remain.
- Items will not be automatically recalculated when an agency is added. If you want to recalculate prices, ensure that items are unlocked and press refresh.