How to Increase Tanning Salon Profits Immediately

How to Increase Tanning Salon Profits Immediately

Every dollar matters, especially when you run a business like a tanning salon. The tanning salon industry has enjoyed an average growth rate of 7.5% from 2014-2019, according to IBISWorld, a market research firm. And more than 35% of American adults say they have used a tanning bed. So, you’ve made a smart choice by starting a tanning salon. Not only can you earn solid money, but you can help people improve their appearance and self-confidence. But to keep those tanning booths in operation, you must manage the business well. And you must find ways to increase your tanning salon’s profits. You may think that’s easier said than done. Guess what? It’s not.With just one simple change in how you do things, you can increase your tanning salon’s profits by 10%. All you have to do is eliminate credit card processing fees.In this article, we’ll discuss why and how you can do that:

How much do tanning salons make?

First, let’s look over your finances. So, how much does the average tanning salon make?Market data shows the tanning salons earn profits of around $65,000 per year. Depending on your location and size of your operation, you may earn more or less than that. The average tanning booth or bed generates roughly $15,000-$20,000 in revenue per year. Now, how much does it cost to start a tanning salon?According to Palm Beach Tan, tanning salon startup costs often exceed $400,000. That amount includes expenses for tanning booths, salon construction, insurance, labor, POS systems, marketing and advertising, and more. The point is this: You’ve made a big investment to start a tanning salon. As the owner, you can’t afford to lose tanning booth revenue to expenditures like credit card processing fees. Sure, you could do employ other strategies to increase your tanning salon’s profits, such as:

  • Marketing campaigns to bring in more customers
  • Negotiating discounts with suppliers and vendors
  • Increasing your prices or not offering discounts
  • Reducing operational costs

However, none of these are a sure bet. Eliminating credit card processing fees is a sure bet to increase your tanning salon’s profits.

How much more can your tanning salon make if you get rid of credit card processing fees

Every small business, from tanning salons to botox clinics to e-commerce shops, should make the effort to reduce credit card transaction fees. Because the fact is this: These fees kill your bottom line!Just look at the average credit card processing fees below. On every credit card transaction, you pay between 2.40% and 3.15% in fees, depending on the payment network. And that doesn’t even include the merchant service provider fees.

average payment network fees

You may think that it’s just 3% or so. No big deal, right? But it is a big deal, especially when you consider your operating costs, margins, and how much tanning booth revenue comes from credit card transactions. If your tanning booth customers pay like the average consumer, 40% of your customers will swipe the credit card.

tanning salon profits and credit card usage


Considering that credit card usage rates increase as transaction values increase, it’s possible 60% of your tanning booth revenue comes via credit card transactions. Many of your higher paying customers will swipe the plastic. To give you a clear idea of how much you could increase tanning salon profits, let’s do an example. Let’s say:

  • Your tanning salon generates revenue of $350,000 and $65,000 in profits.

And let’s say:

  • 60%, or $210,000, of your revenue comes from credit card transactions.

If you pay an average of 3.5% in processing fees, that means:

  • You pay $7,350 in credit card processing fees each year. That’s a lot!

Now, imagine if you could wipe away that $7,350 in fees overnight. This is what would happen:

  • Your tanning salon profits would jump from $65,000 to $72,350! That’s a salary increase of 11.13%!

Think of all that you could when you don’t have to pay credit card fees on tanning booth revenue. You could expand your business, save more for retirement, take a nice vacation, and more. The important thing is you’ll have more money back in your pocket. And that should make you jump for joy!Need any more motivation to start looking for the best credit card processing? Because you can take home 100% of your tanning booth revenue.

How to find the best credit card processing company for tanning salons

Your tanning salon business depends on you finding the best merchant service provider (MSP). To do that, follow our guide on finding the best credit card processing. Do these three steps:

  1. Look for quality MSPs that offer pass-through pricing. Do not go with a processor that has tiered pricing. Here’s why:
  2. Pass-through pricing is transparent. You know how much you pay in fees per transaction, and it’s usually cheaper than tiered pricing.
  3. Tiered pricing bases fees on how the transaction is categorized (qualified, mid-qualified, or non-qualified). Too often, you’ll pay non-qualified tier fees, which are higher.
  4. Select 3-5 MSPs that have high-quality software and hardware, low fees, and reliable customer service. Be sure to read the fine print with credit card processing fees. Look at the following:
  5. Interchange fees: paid to the card-issuing bank
  6. Network fees: paid to the card network
  7. Assessment fees: paid to the card brand
  8. MSP markup: The MSP makes money by assessing various fees, such as monthly or annual fees, 24/7 support fees, hardware fees, etc.
  9. Negotiate with the MSPs. While American Express’ fees are set in stone, you can negotiate the fees the processing company charges. We’ve seen plenty of small businesses get 5-10% off the MSP markup. That’s money back in your wallet.

After doing these three steps, it should be clear which MSP is the best for your tanning salon business. Of course, you’ll still have to pay some credit card processing fees. But you got them as low as possible. Even better, you still have another strategy to employ. And this is what will get you free credit card processing...

Enter the cash discount program—the key to taking home 100% of your tanning booth revenue

Did you know you can offer tanning booth clients discounts for paying in cash?Thanks to the Dodd-Frank Act, cash discount programs are legal. And they can help you get free credit card processing. So, how does it work?At NadaPayments, our cash discount program would give your tanning booth clients up to 3.95% off for paying in cash. They can still use a credit card, as our program works with most MSPs. However, they’ll have to pay the non-discounted price, which accounts for credit card processing fees. This ensures your revenue doesn’t take a hit from credit card processing fees.As you can see, a cash discount program still offers your tanning booth clients the convenience of using their preferred payment. But they can also save money by paying with cash. Even better, you can guarantee you take home 100% of your tanning booth revenue. Interested in a cash discount program? At NadaPayments, we can help tanning salon owners get the best credit card processing. Contact us at +1 (929) 293-1800 or click the link below.

I Want FREE Credit Card Processing

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Aleksey Nugid
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