Retail or Die?
“I’m not a salesman – I am an artist!”
These might have been the final words of renowned artist Vincent Van Gogh, as gifted a “failure” the world has likely ever known. Thankfully, although he struggled to find buyers of his paintings while living, his art lives on and for this the world is a better place.
Much of the “art” salon professionals create is lost on the world as soon as it leaves the salon and so the artist as “self promoter/salesman” should not be seen as a bad thing but rather a means to end (i.e. paying the rent, raising babies, buying a bit of bling, and more).
When it comes to selling assorted potions, lotions and sprays, most clients don’t purchase retail from the salon (go ahead, say it now, you’ll feel better - “those darned diverters!”) Okay, now let’s put our emotional reactions away and consider the truth:
- Before there was “diversion,” salons were not selling much retail.
The fact is that most have struggled to take what is a natural extension of the service model (the core of the salon business) and build “incremental retail sales” into the same kind of powerhouse business model that keeps the likes of Regis and other corporate salons afloat in the face of rising labor costs. Translation – retail is first and foremost about helping to sustain your business, build your balance sheet, and ultimately build a better life.
Let’s try another analogy: building retail is kind of like building a healthier body. It takes work – and the reality is that (just like retail sales in salons) most of us lack the commitment to pull it off. There are many ways to achieve the goal of better health – join a gym, go on diet, or maybe just take regular walks. But it starts with motivation – typically the health scare that gets us off the couch and onto the treadmill. But when it comes to business, the warning signs are more subtle and solutions seemingly more distant.
So let’s focus on the benefits. Just what do great salon retailers get from their efforts that others may be missing? Consider the following list of real life examples from real life salon pros who have figured out that that a professional recommendation of retail products to go with services is not only a nice things to do for clients but even nicer to do for you:
- Savings for a rainy day
- Quality health insurance
- A real retirement fund
- Nice vacations
- Great education
- Home ownership (or a bigger, better one)
- Nicer stuff (you pick!)
- Better lives for those you care about most (family, friends – and employees!)
- The ability to do more for others (think charity)
- So much more…
Some like to say that they work in our industry to make people look good and feel great. Some like to say that the reason to sell product is to better serve the client, extend the service, and provide home maintenance options and more. But few ever say that they do what they do to make a better living for themselves and those they care about. Few say that they say retail because it’s REALLY profitable over time – and yes, it’s great that it fits into our business perfectly as a win-win for client and professional alike.
The bottom line is that money matters. The more you have, the more you can do for yourself, your family, your community and the world around you. More money is a good thing. Less money may not be “bad” but its usually not nearly as good as “more” – and more retail sales can make you more money – ergo more retail sales is a good thing.
Next year, tens of thousands of salons will close their doors and hundreds of thousands of salon professionals will hang up their shears, cuticle clippers and/or steamers to go make a better living doing something else. Believe it or not, had many of them hopped onto the retail treadmill earlier in their careers, they might still be with us. The good news for the rest of us is that it’s never too late to get “healthy.” Maybe our 2008 mantra needs to be “retail or die?”
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November 29th, 2007 at 1:05 am
I think that the Van Gough example of not a salesman is quite appropriate especially when you consider that he did in fact sell his work for mere “daily bread”.His work was repulsive to the mainstream art collectors of the day.It would be the passing of an entire century before the art world would recognize the brilliance of his work.With over 600 shampoos on the market which one is the best? The industry no longer is what it was and likely will never be.Professionals who endorse product will likely be selling a product line that will hit the mass retail market as soon as the professional launch is off the ground and viability can be accessed for major distribution.You can veiw this historical pattern played out with mechanical precision over the last few decades.I am not condemning retail or salesmanship, however, it is an illusive proposition in times like these.We are artists that need to sell our own products which we own and control. When the market is flooded with shampoo it reduces the opportunity to make profits as salesmen.The industry needs a new business model in order to sustain itself.Obsolecence is the result of not evolving with the times.Professional business alliances for the purpose of sustaining and ushering in a new way of selling is what we need.Diversion would end if those who manufactured were the same as those who sold the product.It’s time for us to stop working for a little daily bread and start to build the foundations for revolution.The industry is full of potential as long as we let go of mainstream control and unite together as business people and artists that understand whats going on around us.You’ve got to be asleep to live the American dream turned nightmare.Wakeup!
November 29th, 2007 at 10:57 pm
The author is correct. Without retail sales, the average salon cannot make a profit. The social welfare costs have taken away any possibility of salons making real profits. the commission structure of this industry were created before the social security, medicare, unemployment insurance, workmens comp costs of today were in existence.
The salon industry can only prosper in two ways. One is to improve the skills of the hairdresser workforce to enable them to charge higher prices. How many are frozen in time?
The other is to realise that retail sales are the responsibility of the salon, not the manufacturer. If the salons want national advertising to sell the products for them, diversion and retailers will wipe out the salons. The advertising creates consumer demand for the retailers such as Target.
The industry is currently at a crossroads. If the salons eliminate from their shelves the heavily diverted brands and transfer this capital into clean new small retail brands, there is a chance that salon retailing can prosper. If the salons want to continue to present the heavily diverted brands, their retail sales will continue to diminish.
November 29th, 2007 at 11:35 pm
This is a great article. But we dont give a hoot about diversion. In our salons, we sell ONLY the leading diverted product - and we sell LOTS! The secret to our success is that we sell what people want (diverted brands). We figured out long ago that if we ask our clients to buy product, they do - and diversion doesn’t change that. We also know that when it gets into Target, the experts have decided its worth selling and we follow their lead and sell the heck out of it all day long. It’s been working like a charm for years. It really does work!
November 30th, 2007 at 6:36 am
As salon owners we have to stand up for what is right for our industry.Diverted products is only degrading the integrity of our profession.Don’t be scared to stand up for what you believe in. I don’t carry one item in my salon that is in the department stores. It hurts my retail numbers sometimes but I have a great product in my salon that I believe will be number one someday. Mantra is a wonderful product and they are wonderful to work with. I have been in business for 12 years and this has been the best by far. Please all of you salon owners take a stand and do what is right so that we can make a difference for our profession.
November 30th, 2007 at 1:05 pm
Thank you for your great article. I’m not certain why most hairdressers don’t get it, but selling professional products that support the services we offer should be second-nature to us. If you go to the eye doctor, and he says you need glasses, the next thing they do is take you out front and sell you some glasses. That’s what we should do. I agree with the comment from Sandra; We should sell the products we believe in, and not pay any attention to whether they are “diverted”. I believe diversion happens because we, the hairdressers, are not doing our job. The manufacturers make great products, the best ever. The consumers want these great products, and if their stylist doesn’t sell it to them, they’ll find other ways to get it. I hate it when I hear hairdressers complain about diversion, because it is the hairdresser that is the bottleneck. You’ll never be successful by complaining about what other people are doing.
December 1st, 2007 at 1:28 am
How many professionals would like a slice of the manufacturers pie? It is you guys that caused the success of so many wet lines and all of you deserve more than just 10% commision for pros and retail mark up for salon owmers.Salon owners need to unite together then decide how to direct their influence so that they might reap the rewards of the selling in a more bountiful way.Through regional conglomerations of salon owners and professionals it is possible to manifest the greatest selling wet lines the industry has ever seen.What this industry needs is for workers to become owners.We are fortunate that in America we have the type of business infrastructures that make this possible.All we need is desire.
December 2nd, 2007 at 9:24 pm
A wonderful article. Even better blog comments. The challenge for salons is they (and their teams) continue to believe they are in the business of cutting hair, doing nails, giving facials. They think they are in the business of doing STUFF instead of creating an experience for their guest which should always include an add-on retail purchase based on a specific recommendation from the team. Guests are always most likely to trust the salon suggestion. The problem is if we’re doing STUFF then we don’t have the mindset to do more.
December 3rd, 2007 at 8:57 pm
The hard part about selling retail today is that we dont have the trust in things we once did. Diversion makes us distrust manufacturers, distributors and other salons. Changing brands makes our employees trust the products and us less (”but you told us this was the best and i told my clients that”). Clients are as loyal as they used to be and that makes many nervous to sell (espically since we think a recession is coming - anybody else feeling that?).
We do well with retail because we agree that its a must for our bottom line. ButWere selling more and more boutique items though as they are more profitable and we dont have the problems we have with products.
December 5th, 2007 at 11:13 pm
We wouldnt be in business without our retail sales. Our commissions run between 55 and 65 percent and the rest of overhead is a killer. We’ve watched a lot of salons come and go. Its amazing that most never figured this out. What’s worst for our business if the amount of kitchen hair being done. In the old days, they didnt have a place to buy product and the problem was less. Now they can shop at the same stores that we do and offer just about any service from home. This is the industry’s biggest problem in our opinion.
December 7th, 2007 at 2:58 pm
Professional salon products are made for the salon, not regular stores. This is what sets them apart from cheaper lower quality products. To all of you that don’t mind diversion & sell those diverted products anyway because they are popular, you might as well sell any hair product that is sold in any store like Suave & Tresemme.
There are a lot of people that are “Ulta nuts” also which to me is just a retail store with a few chairs in the back, this 90% retail & 10% salon service thing has got to go.
I make good money doing hair without selling lots of retail. I also work for myself & I don’t have a boss to take 50% away from me either so retail does not make or break me. On that note, I sell a product that is not in any store or Ulta & they have to come to me for for that product line. Examples of products are Aquage, Pureology, Pravana. Do your research, try a product & stand behind it if you like it. This is the way I combat diversion. If a product appears in the stores later, I switch to another exclusive salon product. People like change anyway.
December 8th, 2007 at 5:11 pm
I would certainly agree money matters, its a tool like a blow dryer or nail clippers.
I would also agree that retail is and has been, for 3 decades the secret weapon of successful salon operations every where.
For 25 years retail profits paid 100% of medical benefits for all of our full time employees, as well as contributing to a salon funded profit sharing program in my Lockworks Salons and Schools based in Baton Rouge, LA.
All 150 plus employees went to work each day with a conviction that products sales were integral to the service experience of our customer.
Inspite of what the market had going on we did our work.
We all talked about the part retail sales played and we all agreed it was a critical part of our service offerings.
If we did not make a sale, we chose to ask ourselves how could we make the sale upon the cust next visit, we would then change our aproach ever so slightly and try once again.
We did this and found that it worked, over and over again.
It wasn’t passion (which we had lots of) not power selling (which we tried) and not the lone pursuit of income (which we learned would be ours anyway) just principles, and the shared beliefs that it was our job, our promise, our shared convictions.
Selling is fun whenever problems are being solved, like creating a profitable entity that can provide dependable jobs for as many people as one cares to employee, I see that as good, paying benefits is good,and beautiful hair and a happy customer that keeps coming year after year is very good.
This industry is good to us, as good as we are to it…
We never found a short cut to selling, but we kept the conversation alive about what it really meant to sell.
Van Gogh mastered the art of painting, I bet it was lonely work, figuring out how to create such awe inspired paintings. But it was his choosen path his lifes work, he trusted himself and figured it out, way before fame and fortune found him. He kept the conversations (probably with himself) and actions alive, and look what he created!
Trust is a powerful bond, the art WE create is first trust then beautiful hair…
Self trust sometimes called confidnce, is what we found worked best for all of us at Lockworks Salons…
Success is out there some where.
December 8th, 2007 at 5:40 pm
I have to agree with Craig! Kitchen hair burners get whatever they want from the stores or at the beauty shows. Just look at who goes to shows any more, and look at what they buy. Who goes to a beauty show to buy gallons of shampoo? Not us! Those not working in salons should not be able to keep their license forever so they can work at home, buy professional products and cheat on their taxes while taking customers out of legitimte salons.
December 9th, 2007 at 1:19 pm
The answer to the big question. Why is diversion so out of hand? Look in the mirror and you will see who is at fault. If you choose not to do your job some one else will. I don’t worry about what is going on around me and who is doing what. My clients buy from me because they trust me and want to keep me in business. Its all about education and being accountable…stop the blame game people.
December 10th, 2007 at 11:03 pm
Rene’,this could not be more true.
December 11th, 2007 at 2:37 pm
Kimberlee - you hit the nail right on the head. After years of watching things get worse and worse, I almost broke my ankle falling over somebody dragging cases of shampoo (can you imagine?) across the midwest show. Getting up and looking around at who was there and what was being sold, I finally said enough is enough and haven’t been back since. We go to the Redken Symposium and Aveda Congress and love every one of them. Its where we meet other serious profesionals. The kitchen hair burner (I love that!) did me a favor by tripping me!
December 12th, 2007 at 11:18 am
Hello to all,
I just want to tell every salon owner to keep their head up and keep retailing it is wealth unto you.
December 12th, 2007 at 11:24 am
Hello Professionals,
It is up to you to do what is right when you here of stylist doing hair at home in the kitchen. They are breaking the law and should be reported. Just like every other law braker. keep smileing and do whats right.
December 14th, 2007 at 2:40 am
Beverly…you hit the nail on the head…After years things are getting worse and it “WILL” continue to do so until all of you here come to the realization it is the Unification of all Beauty Professionals in this Country that will initiate CHANGE! What the Independent Stylists in this Country don’t realize is all you need to do for change to take place is to “UNITE”.
Every one of you who made comments here are right but venting here is not the only answer. If you really want to beat the Big Retailers at there own game and you really want to put the profits back into your pockets where it belongs you need to play like they do. When Home Depot and Lowe’s negotiates “wholesale pricing” for the products they sell…yes they do negotiate…they tell their “suppliers” what they are going to pay for the products from them.They don’t ask…they tell them. Their suppliers sell direct from the manufactures and give higher margins to Home Depot and Lowe’s because there is no “MIDDLE MAN”. Home Depot has the major manufactures make them products just for them to sell. A special tool, a light fixture, a toilet, whatever..its make “exclusively” for them to sell not available to any other retailer.
“United” special “Retail Products” just for you to sell could be produced by any major soap peddler with a “high margin” and not available to Longs, CVC, Safeway, etc. Made just for private Salons to sell under “contract”. And that’s only the beginning.
“United” you would be buying directly from your Manufacture and the “Diversion” problem would be gone! You would now be making more money like you should…its your Talent…and its your “Clients” right? Its your hard work and your investment money in your business right? Would you walk up to a stranger on the street and hand them “Half your profits”? Thats exactly what you are doing everyday at work right now because you don’t have the negotiating power you deserve because you are not “united” with your fellow Beauty Professionals.
If all Beauty Professionals in this Country “UNITE” as one in terms of business dealings you would see a whole new World never before seen in this Industry. As it is now every Stylist is just “one person” and that is how all your suppliers look at you. They tell you they are going to sell you a bottle of product for 50% markup…guess what? When they sell the same product to Longs, CVS, Target, Krogers, whatever…the buyers of all those companies “NEGOTIATE THE PRICE”. YES YOU ALL…Diversion is a “MYTH” you are falling for from your suppliers. These big companies don’t buy 6 bottles at a time like you do they buy “BOX CAR” Amounts “NEGOTIATED” by their buyers directly from the manufactures warehouse. The same people you get your products from. They know you don’t have access to the receiving Dept. Invoices coming in the back door of your local “Drug Store” that is selling your Salons Products next door. Play their game…sell what they sell in your waiting area or at your stations…OTC Products (over the counter)products..Bayer Asp.,eye drops, Vitamins, Band aids,Candy, tooth paste, whatever…all these products have a 100% markup and you can get these from a wholesaler just like they do. Just do it with the same “Class” you now sell everything else with. Put out your “Bling” and sell the things! These are impulse convenience items the Drugs Stores sell for a reason…”PROFITS”. IT IS YOU…and every other Stylist like you that is making the little guys “BIG” without you as their vehicle they would be lost on the shelves of Retailers. The answer is to change “HISTORY” and turn the table of power over to the Beauty Professionals themselves instead of all of you being the “PUPPETS OF THE INDUSTRY”. Without the “Talents” of each and every one of you and the “Client Base” you build yourself these suppliers wouldn’t have a dime. Collectively its all Beauty Professionals buying that is making them wealth. This is a $BILLION DOLLAR INDUSTRY…and how much of that do you get…pennies compared to those making all the money off of you. Beauty Professionals across the Nation will soon be given the opportunity to “UNITE” as one to change History. The question is…are the Beauty Professionals of this Grand Industry ready and willing to join together? Uniting would mean you as Individuals would not be alone anymore. When one speaks it would be received as Millions Speaking. Your $40 in buying power would become $40million dollars in buying power. But first something in this Industry never before presented has to happen…Unify with your fellow Beauty Professionals and change this Industry yourselves along with those you join with. When the opportunity presents itself “JOIN” and watch your power and your profits rise. Stop putting your profits in everyone else’s pockets. All of you can and will control your futures together…the first step is to JOIN and UNITE.
If you’re saying why should I? The rest who joined will say why would you not?
Don’t worry what the other guy is doing wrong…do what is right and all of that will be taken care of by the power you all will have together. You are paying your License fees to the State for the “Hair Police” to do their job…if they’re not doing their job your power will fix that too!
The question is are you ready and willing to join?
Have a Happy and Prosperous New Year!
2008 WILL BE THE DATE!
December 15th, 2007 at 10:20 am
Derek, we mark our products up 100% and always have so i do think we have a healthy mark up. Most salons in our area are not well run and have no idea how to retail. I dont know if they jsut dont get it or what. We are the most successful salon in our area. The biggest problem we have with competition is not that they are good but that are so bad and this hurts all of us.
December 16th, 2007 at 3:26 am
Kimberly…you have a healthy markup on products that were originally marketed to us as Professionals as an “assumed” exclusive product for Beauty Professionals to retail in Salons but what we didn’t understand in the early years was this is being done without “contractual agreements” between us and the Manufacturers. There has never been a blanket “solid contractual agreement” between the Beauty Professionals and any “products” supplied to us we all know and enjoy using on our clients. Because of this from a “business standpoint” you and I and all the Beauty Professionals in the Nation have no “legal agreements” which will support “exclusivity” in selling “any” product you now sell. Because of this business arrangement you and I and all the Beauty Professionals of the Nation are being in essence taken advantage up by wealthy manufactures knowing full well they owe nothing to us in Loyalty. In years past we had a very personable relationship with our suppliers who at the time had a mutual investment in success. But now in 2007 and going into 2008 every independent Beauty Professional needs to understand is although we go to work everyday doing what we love to do business around us has changed dramatically from what it used to be. You Kimberlee and every other Independent Beauty Professional in this Country is not just “Competing against each other” anymore. All Independents are now “Competing” against small Giants out in full force every day backed by “Investors” to become “Controlling Giants” in the Future. If this is allowed by Independents then you will wake up to the “Giants” getting “price breaks” from Manufactures and you will be stuck with only 100% markup and nothing more. That is reality in business today.
Giving you an example…when a new Fragrance is launched at Macy’s the Fragrance Manufacture signs an “exclusive contract” with Macy’s for a 6 months period that Macy’s will have the right to market and sell that Fragrance Line “exclusively” in Macy’s for that set 6 month’s period. After that anyone can order the Fragrance to sell on the open retail market. What this does is guarantee Macy’s the “sole right” to sell that product for a set time. Macy’s uses this concept to “LURE CUSTOMERS” into their stores using this Fragrance and the “Publicity” surrounding the Launch which most likely includes a “guest appearance” from a “Celebrity”. Everyone runs to Macy’s in droves in all their Stores to get to see the Celebrity and to attain samples of the new products. Right?
This is why Im giving you here an example of how now in the Industry things need to change. We as Beauty Professionals need to learn and learn quickly the mechanics of how those who have been living off of us for years make their money. Right now you and every other Beauty Professional in the Nation do not have “any Blanket Contractual” agreements between yourselves and your suppliers.
This is what needs to change to protect your investment in Retail Inventory and your “Good Will” you are creating in your Business. It doesn’t matter if your Business is just you as a sole Independent or as a Salon owner with Staff. Today in this business world if you are retailing and you don’t have some sort of “agreement” beyond an “assumed” arrangement then you must understand your suppliers have “NO” responsibility what so ever to honor anything you may be promised.
A “Salesmen” can and will say anything today to make a commission because they understand the challenges they have to conquer everyday against “their competition” and that is other Salesmen trying to get you to represent their line of products.
You Kimberlee and all Beauty Professionals are the Queens and Kings of commerce when it comes to what you use and sell everyday in your Salon. The big problem today is you don’t know that. You Kimberlee and every Beauty Professional just like you are the single most important ingredient in the formula that makes every Salon Product Successful. No one else is more important. It is you who went through the ordeal of going through Beauty School and now out there putting “Your Good Name” on your product and that is your service and work…don’t let anyone short change you on that! You are the center of importance to your Clients who trust you and you are the only one who can move the products that needs to be sold via Salons. The time has now come in this Great Industry that all Beauty Professionals need to Unite to make this happen. Like I said before “Don’t worry” that your fellow Stylist “at this time” don’t understand. Trust me “word” travels fast in this business when something good is going on they will come around quick to your feelings. While you are understandably hurt by your neighbors actions what you need to focus on now along with belonging to the NCA is continue to care and do great things for you and your Clients. You need to rise up and go beyond your Location and realize Big events are happening in this Industry so you and every Beauty Professional needs to become a part of it for this Industry to Survive as we know it.
Never before in the History of this Industry has this ever been more important to each and every Independent Beauty Professional and is the sole basis why we need to UNITE! When I say “Unite” I mean only the Beauty Professionals “themselves” uniting. All the way from every single sole operator in every little hole and holler in this Country up to every Beauty Professional in Big Cities. And that includes you Kimberlee and everyone you know who is a Beauty Professional as well.
It’s not about who can do the best work…its about joining together for “ONE Voice”. A Nation wide Alliance of all Beauty Professionals that has Never before been seen or done in this Industry on this Grand a scale.
United if “one” of us alone has a problem then the entire “Voice” can come to your aid. You will have the backing of 1000’s behind you if necessary. Pretty cool huh? Can’t be done you say? Some might say that…But…I say it can…an will!
What Im trying to get across to you Kimberlee and all Beauty Professionals to understand is… it is “US” who have made everyone else successful with our Talents and hard daily work but now its time for the rewards to be shifted in the right direction so the profits will be flowing into our pockets and not a strangers or outside Investors. I fully understand you are proud of your Salon..Ive been there too. You should be proud for the hard work you are doing…heck, I’m proud of you and I don’t even know you…but this Industry is needing radical changes now more than ever to push it to the next level.
You are absolutely right your fellow Beauty Professionals don’t understand and why is that? All Training right now comes from primarily who? Your Suppliers who are wanting you to use and sell their products. The problem is the “middlemen” are the ones who you share your profits with. You give them what should be your profit. Do they “finance” your Retail selling? No…you do! Do they Loan you the money to buy their products? No you do! If we as Beauty Professionals were “United” and had a “direct link” to the Manufactures we would be in a better “business” position to negotiate the profits structures. If that wasn’t fully possible at least we would have a better edge on what is going on now. Diversion would be reduced because its the middlemen who are manipulating the products to your “Retail Competitors”. You mark up your product now 100%. By “wholesale price” negotiations you could end up with 125- 150% markup potential. “United” we could demand “exclusive contracts” with Manufactures to lets say…1 year with sole right to sell a new product line from any of our current suppliers we use at a “reduced wholesale price”. Why shouldn’t we have this…”We ARE THE ONES LAUNCHING” the new products …right? We now deserve what is right and that is the profits to start flowing to the “TRUE CONTRIBUTORS” OF THIS INDUSTRY…the Independent and individual …Beauty Professionals that make up this Great Industry.
Kimberlee take what I’m saying here and plant it in your mind as a seed of thought. Imagine a future of you and your fellow Beauty Professionals not only enjoying more income for you and your family but a future of knowing you have 1000’s of people tomorrow who can “back you up” in a moment of need or just a whole lot of partners in life to get you through.
I know this can and will be done…
The Future is now.
December 21st, 2007 at 5:08 am
They sure didn’t teach that in beauty school.
March 7th, 2008 at 10:48 pm
How can we have this relationship with manufact. They say thay are professional , like loreal but they sell there products at grocery stores as in boxed hair color, or clairol does the same, yet they are the big companies buying up everything in our industry.How can we make these changes?
March 7th, 2008 at 10:52 pm
I have an add-on for the question above, what about wahl and all other companies, they say they are for the professionals yet they sell their products at walmart,target etc. so people can cut there own hair at home, how can we stop this? They sell to us yet they cut our throats at the same time.