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An agency commission is the part of the fee that the model has to pay to the modeling agency that arranged the job for her after the end of the assignment or after payment. This type of commission is therefore an agency fee. Agencies and other recruiters are compensated for their efforts during the planning and placement process.
Everyday agency life is stressful. There is a lot to organize and do. Model agencies usually provide the following services:
Scouting: The active search for new models. Depending on the agency, a different number of model scouts are deployed for this purpose.
Advertising: The agency regularly advertises its models to potential clients, thereby increasing their chances of getting a job.
Organization: Once a client has decided on a model, the agency takes over the organizational part of the collaboration. This includes any necessary booking of accommodation and flights.
Legal: The collaboration between model and client should always be on a legally secure footing. The agency takes care of drawing up the corresponding framework contracts and thus also provides the model with financial security.
Thanks to the agency's work in the background, a model can concentrate fully on looking good in front of the camera. The rest is taken care of by an army of commercial specialists and lawyers in cooperation with the agency's artistic director. Of course, all of this costs money; the agency finances its operations through commission.
The biggest advantage of the agency commission for a model is the fact that no financial advance payment is initially required. Payment is only due once a collaboration with a client has actually been established. A success fee, so to speak. In addition, the model does not have to worry about processing the payment, but also has her personal collection agency at hand with her agency.
The agency commission therefore provides you with a certain degree of reassuring security. If you want to read more about this topic, you can find further information on Jobwork.
The amount of the agency commission basically depends on the amount of the model fee, as it is calculated as a percentage. From this point of view, it is in the interest of both the agency and the model to land ever larger contracts. The more the model earns, the more commission the agency receives.
In Germany, an agency commission of 15 % is common.
Section 2 (2) of the Remuneration Ordinance sets the maximum limit at 18%. Anything above this would not be legally permissible.
Despite the statutory maximum of 18%, in practice most agencies charge a commission of between 20% and 30% of the total order volume. They justify these high costs with equally high administrative costs.
The agency commission is usually calculated as a percentage of the total value of the brokered transaction or contract. The exact percentage may vary depending on the industry and agreement.