# Calculation and usage of agent mark-ups

## VERY IMPORTANT PART about the rates and agents!!!

Inside the Effective Tours, there is two models of prices: Net Rates & Rack Rates
Depending of which rate is used, the Markups works in different way
Let's start with the scenario, that you have a hotel with the Nett rate

It is a very important part. This is needed to avoid confusion with rates, when the agents are connected to your account, you will manage markups for each agent individually. All of the desired mark ups (either in % or \$ value) will be added later on top of the rates entered by you in to the system.

So let’s say your lowest rate/base rate/travel agent rate/NETT rate (however you want to name it) for the room is 100\$/night.
As an example there are 3 agent’s connected to the property: Agent A (big tour operator); Agent B (travel agency); Agent C (your friend’s agency)
This price of 100\$, is the minimal price you can afford to sell the rooms. Later, when you start connecting your agents (we will discuss it after) you will provide them the markups rates accordingly.
For Agent A (Tour Operator) you want to provide with a best markup of 2.5%.
For Agent B (Travel Agent) you want to provide with a competitive markup of 5%.
For Agent C (Friend Agent) you want to give the best rate possible and put a markup of 0%.

Each time, when you will update any of the rates for the rooms or supplements, your agents will automatically receive the prices according to markups assigned by you.
So it means for the example above:
For Agent A (Tour Operator) 100\$+2.5% = 102.50\$. Means you are selling to this agent for the price of 102.50\$
For Agent B (Travel Agent) 100\$+5% = 105\$. Means you are selling to this agent for the price of 105\$
For Agent C (Friend Agent) 100\$+0% = 100\$. Means you are selling to this agent for the price of 100\$

There is also a special option of Advance Price management, which allows you to enter different rates, for the different markets. You can provide one rate for Asia market, another for Arabic, another for CIF countries. You can activate it in your hotel settings by clicking to and selecting the checkbox Use Extended Prices.

IMPORTANT: In case if your hotel operating with Rack Rates then all of the Markups will be removed, from the price. So it you have a 100\$ rack rate, an a markup of 5%, then the final price will be 100\$-5% = 95\$