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What are the profit margins of training companies operating in the private sector?


The company I work with,, will be launching a training category in the near future in which buyers (most likely SMEs) will place a request for a training company based on their requirements. The training companies registered in our database will then quote against one another to offer the buyer the best deal. Essentially, we offer a reverse auctioning service. Check out the site if you have the time! The service is free for buyers and suppliers to use, but if the supplier closes a deal then they pay a commission. This is why I am trying to work out the commission rates training companies charge, because we want to make sure our rate is competitive.....repeat business is our aim, and we don't want to eat into a suppliers profit margin.
Simon W. Roser

3 Responses

  1. Commision rates
    Dear Simon

    In our experience, a commission of 5% is usual for introductions.

    Maggie Mosley

  2. Commission Payments
    I’ve had to pay between 2.5% and 7.5%. I’ve been asked for a commission of up to 12.5%, but declined.

  3. Margins & commissions in training vary widely
    We have done some limited work on average net margins in the private training business. It seems that 5-7% is not unusual. How these margins are achieved is not so clear. Gross margins appear to vary widely depending on the status of the trainer – partnerships etc. enjoying 90% or more and corporates rather less.

    Regarding commissions, Business Link Kent has contracts for private consultants to provide their services and these are based on 10% commission payable to Business Link. If a trainer resells our (Scitech-DIOL) products, they can get a much better commission. There are many examples. Our experience is that “marking up” a training providers costs has a very short life cycle – the market is over supplied and the costs soon become transparent.

    Good luck!

    Don McLeod

    PS If you are interested in learning materials and qualifications for SMEs, we publish an excellent range for the NEBS Management Owner-Manager qualifications.


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