Mr. Lavery,

I am writing to you as I have been reading your advice for over a year now and feel you have a grasp on the horse industry. I know, by your reputation, you are a well respected professional trainer and have always found your advice to be right on target. Although this question is not about training problems, I feel you are the one to explain it to me with no B.S. I am looking into to moving my horse to a different trainer and she sent me a letter describing her charges. Right there, as if she is not charging enough already, she says she charges and I quote, "A minimum 10% commission on all horses bought or sold." What is meant by minimum? Can she get away with charging more than 10%? Why is she entitled to a commission, it's my horse and my daughter riding. What are your feelings in general concerning commissions. If you don't want to publish this, I understand it is not a very popular topic but I would really appreciate an answer. Thanks

Thank you so very much for your question and your kind words. Commissions have been a sore subject for years and frankly, they are a pet peeve of mine, as well. Most people are afraid to discuss them but not yours truly. I think it is way past time to get them out in the open! The great thing is I know how to do away with commissions! Yes, I have figured it all out and come up with a plan to get rid of them completely!! Let's talk about why's and where's of commissions and what is fair. Let's look at some of the aspects of running a training barn in today's economic environment. I will quote from an older post dealing with why horses cost so much and how high expenses are today. Why Do Horses Seem To Be Getting More Expen$ive?

Nothing costs like it used to cost and it seems to be getting more expensive to do business on a daily basis. Some of the things are; "Where are those $2500-$3500 first horses of the 70's? What the hell happened to oats at $2.00 a hundred, hay at 75 cents a bale, straw at $20.00 a ton, a pickup truck to haul it at $3200. Perhaps the $2000.00 stud fee is a factor or maybe the $75.00 veterinary farm call or the $125.00 reset or the lack of grooms willing to work for $85.00 a week, electric bills that are no longer $30-$40 a month, how about that "Blue Chip," Blue Cross? For that matter where is the McDonalds 35 cent burger, the $3.00 haircut, the $7.00 Filet and 25 cent a gallon gasoline? Did you ever wonder how much insurance is today on a 250'x50' arena? I really miss the days of the $1800.00 tractor and $700.00 manure spreader and the $350 an acre land they were used on.

Well, things have changed since the 70's! Oats are no longer $2.00 a hundred but nearing $10.00. Hay, when you can get it, around $4.00 a bale. Try $90.00 a ton for straw to haul in my $26,000.00 pickup! In 1965, my young and willing and plentiful American help were thrilled to be earning $75.00 per week. By 2006 when I closed my doors I was paying my Hispanic (yea, where did the Americans go)? workers nearly $500.00 per week, taxes and a place to live. Do I have to tell you about health insurance? My insurance on my home and stables was nearing $12,000.00 per year and the $300-$400 a month electric bills had me using flashlights and acting as the "kilowatt police"! I could have sold my 20 year old tractor for $7500 and the 16 year old spreader for $3500. Not long ago, allotment land , around here, was selling for $40,000.00 plus, per acre. As you can see, nearly everything I have mentioned has increased many 100s of percent over the years. All these things factor in to a horse's cost (and the cost of training). Maybe of interest, something that has not rocket so high skyward in price, when my Father closed his barn in 1955, he was charging $175 per month board and training. When I closed my barn, 50 years later, my B&T was $750 per month. Do that math and find the bargain!"

In a nutshell, there you have it. Like no other business I know of, people running a public training stable today, go to work, every single day, knowing they are going to break even, at best. Yes, break even. They are in business to, hopefully, break even! The actual process of training and caring for a show horse (the trainer's business) is that unprofitable if one does it correctly. The overhead is oppressive. To attempt to make any sort of profit, a trainer must rely on other things such as sales, lessons, stud fees, boarding, Prize Money (Ha,ha) and, of course, commissions to help with the cash flow. Could you imagine Lee Iacocca, having to run a driving school after work at Chrysler to make ends meet. (come to think of it, maybe they would be in better shape today) So here you have a trainer that spends 8 to 12 hours each day, applying his trade, hearing an accountant (if he can afford one) point out he is earning about 65 cents an hour.

To answer your question specifically, as to why a trainer is entitled to a commission, I will quote again, "Trainers want clients to do well in the show ring, that is their "score card" so to speak. Trainers want clients to be happy, it is a word of mouth business. To do well they must find the right horse for the level of rider and the level of competition and the level of finance. (Many an amateur has found a "bargain"horse on their own and also found the truth in that old adage, "You get what you pay for!") Ultimately, the trainer will have to use his or her expertise to make this horse work for you and to hopefully maintain or increase its value. To be sure, his reputation is on the line should it not work out. Additionally, they must be certain they can teach you or your daughter to ride the horse well enough to be competitive and still maintain it's value. Should the time arise when you wish to sell, your trainer will use all tools at his disposal to ready the horse and find buyers and get the best price the market has to offer. This means a great deal of networking, telephone calls and possibly making a lot of changes with your horse to make it more suitable for the general market. Not everyone rides as well or as poorly as your daughter. If you want your horse experience to be rewarding, talk it over with your trainer. Remember, it is their business to make your hobby a pleasure! If money is a big problem they can show you ways to still "play" but with much lower expectations." That is what they do to earn a commission.

What is meant by minimum? I take that to mean it might be more than 10%! Seriously, circumstances might dictate a higher rate, but let me assure you, I doubt you would ever be charged a rate you did not agree to. Of course, she may charge anything she likes as long as you are aware of it. Take this circumstance, for instance. Your horse is for sale, a client in your trainer's stable is in need of a new horse. Rather than select a horse from the outside, your trainer sells your horse to the client. He has done the job for you....annnnnd...the buyer! Is that worth more than 10%? In this scenario, I feel both buyer and seller would be charged 10%.

Moving along to how I plan to do away with commissions all together! It is so simple I cannot believe no one has thought of it before. As I eluded to above, things such as feed, insurance, electric, help, cars, tractors, land, food etc. have escalated in price many 100's of percent while the charges for Training have not at all kept up over the same period of time. It is time to allow these trainers to go to work at their job, much like you, and make a profit doing that job, much like you. Then we could do completely away with commissions! I see in the paper that the charge to board (feed, house and pick up his shit) a large dog is around $35.00 a day, ($1050.00 per month) Now mind you, this is not a 1000 lb horse in a 12x12 stall and this does not include any training, grooming, lessons, etc. They make no entries or hotel reservations for you., never take a client to lunch and I doubt they are interested in discussing anything with you after closing time. Taking all of this into consideration, I think a "Minimum" monthly charge for Board and Training should start around $2500.00. Then...we can stop this terrible commission practice! In fact, I want you to be the first to sign a petition to put this into effect.( Anyone else wishing to sign just contact me in the Guest Book)

Thank you for you great question, I hope I have put it into perspective for you and you now understand my feelings on Commissions. I hope to hear about your move in the Guest Book. Good Luck and Good Riding!

LF Lavery