Hair Color Pricing
Here’s a question that recently surfaced in the NCA email box – one that we thought our blog readers might be able to help with:
Q. I work in a nice salon in South Florida. Salons in the area are charging between $40.00 and $50.00 for a 4 week single process. During a recent staff meeting, our team leader informed us that our pricing must change. I totally agree, but our leader wants to change to a sliding scale price system for hair-color that is based on much product is used per client. I feel that this type of approach will discourage client re-bookings. Do you have any feedback or suggestions that would help us?
To offer your advice, click on the “comments” link below. If there is no comments link below, click here and then click on the comments link that will be below this paragraph.
July 30th, 2008 at 3:41 pm
Product for sure is a consideration in haircolor pricing. Think of it this way - if you do two services that each takes an hour and one uses twice the amount of product at twice the cost to the salon, wouldnt you charge more for the service that uses more product? We consider the level of experience of the colorist, our costs to provide the service and the time it takes to do the service. Add in the local market factors and you have an approach that can work. One last thought - be sure to evaluate and adjust prices at least once per year if not twice. I’d like to hear how others do this as it’s never an easy excercise.
July 31st, 2008 at 11:14 am
Regarding costing a color service: The Product cost as a % of the service fee is a minor consideration. In reality the % of commision is the largest cost.
A salons revenue stream can be gauged on revenue producing hour. So more time spent = higher service income. The economics of an salon determines the cost per hour+ profit= selling price which is unique to each busines. Many salons price Services at:(their price and up) Taking extra time and material into cost consideration.
Any business does not win customers by expressing nickel and dime price increase. When we sell a service we win the client by making sure what we offer is worth the value.
As an example: My freind return from a Golf outing. The golf club sells soft drinks. But due to increase energy costs they charge .25 cents extra for ice. He was very disturbed even though he could afford it. The fact that he likes to golf puts him in a economic brackett where he can afford .25 cent ice. But,how did he feel: offended and insulted. If the golf club would raise the price for soft drinks .25 their client would not care, but feel served.
As Salon clients should feel served and pampered.
July 31st, 2008 at 12:18 pm
As a consumer, CPA and educator I see the need to raise prices, but not more than once per year. The price increase should be reasonable, but if you are constantly increasing little bits at a time, every six months, then its annoying to the customers. So raise once, enough to make a difference for you and the shop, if you are commission. The best is to maximize your time per dollar ratio to bring in bigger dollars per hour on average for the same hours. This is done with more service to your customers, more appointments from high end (color, cut , hightlight customers) and consistent communications with your clients to gain referrals with your work as your calling card. There is nothing like being in a room and someone saying “I love your hair - who does your work?” Price is relative to results!
July 31st, 2008 at 5:32 pm
In our spa we have tiered pricing. All prices are based on how long a technician has been with our company. We do charge extra per ounce of color over the average 2oz of normal application amount.
Example: Basic charge for color S/C/S but you used an extra one ounce for a soap cap. (because she gets into her pool and fades your perfect color)We charge extra for that one ounce of color. Maybe she wants more foils to go lighter, average mix in our spa is two scoops, if you use three to give her more hi-lites, we charge for the third scoop. This helps to equalize out the cost when a client has waited until she has two-four inches of new growth, or when they want a color change. Or how about when there hair is down there back, the extra charge helps make-up the time of this time consuming client. Our spa is in a small town in South Carolina, and there has never been a problem, we always explain up front it could cost more, if we use more color than predicted. They ALWAYS say no problem.
July 31st, 2008 at 8:19 pm
Our salon recently switched to Aveda color. We used it for 6 weeks at the price of our former color. The response and results were wonderful! We then told our clients there would be an price increase based on the amount we custom mixed just for them. As a free-lance Educator, I have taught many color classes and I was shocked how many attendees did not know their cost per application. It is imperative for the product cost to be covered for any salon to make ends meet. Along with the product cost, consider the Stylist’s level of experience and the time, effort and money the salon owner has invested in choosing the right product for the demographics and establishing the salon’s point of difference. We justified our decision and the clients have appreciated our decision. The love their color sooo much, they say “it’s worth it” . Clients appreciate consideration..
August 1st, 2008 at 6:14 am
I’d like to ask how many charge stylists a product fee for color or any other services? If so, do you pay commission after deducting service fee or before? and how do you calculate the service fee? We do not charge a service fee but we do deduct a ‘cost plus 20%’ product cost from the service price and pay commission on that amount (so we are not paying commission on that portion of the price). Be great to hear from others on this.
August 1st, 2008 at 9:21 am
As a stylist that has worked in both booth rent and commission based salons, I’ve found that the best way to go seems to be having set prices that increase based on the length of hair, therefore you ARE charging more for more used product. My salon has a base prices for certain lengths of hair, depending on what is done. For example, for a client with short/medium length hair, a single process base color might be $55, a color with a few scattered hi-lites might be $65, and a color and full hi-lite might be $75. But, a client with longer/thicker hair might be charged $65 for a single process base color, $75 for color with a few scattered hi-lites, or $85 for color and full hi-lite.
So, you ARE charging them more, but still have set prices in place without having to stop and determine percentages with each client.
It works really well for us, and has for quite some time. Hope that helps.
August 2nd, 2008 at 7:07 pm
i’m a renter of 9+ yrs. and what helps me is i have a base price for color services and as we all know if you buy your own colors, each brand costs different so there for if i use brand “a” it could start at $50 or brand “b” could be $60—you get the idea
August 2nd, 2008 at 8:54 pm
Reply to Craig..we do have a service fee which is based on the amount of color used plus the cost of foil.Commission is paid after service fee is deducted. Good to hear other salons’ business practices.
August 8th, 2008 at 5:24 am
We charge our service fee for single process color considering the average retouch takes 2 oz of color and 2 oz of developer; however, we do add a fee for additional color used if we need more product for the retouch or when color is needed to balance the ends
September 7th, 2008 at 1:13 pm
I am new to the industry and wonder if the owner is receiving 40 to 50% of the stylists income, is this not enough to pay for overhead including color and developer, shampoo and conditioner. the salon I work at charges $5.00 per color plus $5.00 per extra color or highlight and $1.00 per cut and $1.00 per wax.
September 27th, 2008 at 9:58 am
This is a very good point that I think salons need to address and the sooner the better. Product cost is not the only expense a stylist or salon realizes when providing hair coloring services.
Foils, caps, rubber gloves, laundry, clean-up and you may also be able to name a few other expences for yourself.
There is a great deal of volatility in the current economy. You are possibly realizing less profit than you think for chemical salon services and it may also be changing more frequently than you think. Hopefully, your accounting software is configured in a way that you can examine these costs against your profitability. When you begin to see your bottom line slipping, you must adjust your pricing.
Someone mentioned this also depends upon whether or not the stylist is paying for the materials. I have been a hairstylist for 30 years and I have never understood why any operator should bear the cost of providing materials which directly benefit the end user, the client. Wasteful usage should only be charged to a stylist in my opinion.
The good news about the current economy is that the salon industry is going to start asking themselves these questions and make adjustments. If not someone is either going to eat the loss or die trying.
In many ways we are competing against our own established practices. For example, many slaon owners look at what their competition is doing to establish their pricing simply to remain competitive. This is important only to the extent that you can make enough profit to run your own salon and employ quality staff. If someone is not making a living, they will eventually go somewhere else and try.
Here is another point. If not by design, it is a reality that salons and stylists are a shield protecting beauty distributors and product manfactures from the reality of rising supply costs.
In my state, I pay no sales tax on inventory for resale. Once again, this tax is paid by the end user (the client) at the point of sale. By contrast, when I purchase colors, perms or other materials,(for use) I pay the sales tax up front. Here is where it matters. As these costs increase, my client does not see the increase. If I raise the price on a service, the client has no concept of the variables that cause the increase. The supplier never has to explain increasing supply costs to the client, it is up to the stylist. Must be nice for them.
It is not unusual for a product or a group of related products to increase by double digits semi-annually in this day and time. For example, the Fuji end papers I paid .99 cents for in 1996 are now costing int the 2.00 range.
Everyone realizes that things are costing more. This is probably a good time to rethink your pricing structure, make adjustments and educate your clients.
The first of the year is a great time to make these changes. My plan is to separate service costs from material costs and explain to my clients that these are 2 separate fees. My service fees will remain constant; however, my product cost will be variable depending upon market conditions. I will also give them some options as to the type of materials I use and let them decide how much they want to spend doing it. When you give a person options, they usually feel like they better about the cost.
Never let anyone tell you that you are not worth what you charge. You may politely them that perhaps they can not afford your services and there are other options. Thank them for considering you and tell them you will always be here to serve them in the future.
November 12th, 2008 at 2:29 pm
How do you adjust payroll hours for part time employees? Do you reduce the number of hours scheduled by the time on breaks (15 minutes or half hour total ) if they are part time vs. full time? I know that employees who works seven or more (full-time) have one hour taken off for lunch and breaks but I’m not sure how to handle those who work less then seven hours(part time). How do you adjust hours paid for lunch and break times for full versus part time. I have read your comments and believe you are a smart person and I need your recommendation. If you know about this area, can you give me a little help with it? Thank you, G