Look at the Facts:
2,284 Beauty Firms have closed shop
3,309 Salons have shut down or gone out of business
And because of their failure... 12,998 Employees have lost their jobs.
Did you know that only 7% of all hair salons in the world are actually profitable? 20% break even and the rest are going backwards. The average salon in North America makes 4% profit.
A Study revealed that Hair Salon Owners work 60 hours per week. The industry average of turnover ratio is 33% and growing since the pandemic, making it difficult to create consistency between stylist and client base. The rise of corporate salon suites, franchises and online retailers is being built on the blood, sweat and tears of owners who spend years training and growing service providers into highly knowledgable revenue producers.
More products and sales are coming from online retailers, big box retail stores and other retail outlets than ever before. Which means you have to wear multiple hats like working yourself to the bone behind the chair, marketing your salon, responding to customers, recruiting, training and managing staff, inventory and trying to manage budgets, leaving you with little time for take care of your health and family let alone your mental well being.
If you pay 50% for product, then 5% to ship it to you, 5% on processing charges, 10% or more on commission PLUS its share for rent for the space it takes up plus staff pay to answer questions about it and ring it up... you're left with practically nothing.
Then what do you have to do with your "profit?"
BUY MORE INVENTORY.
The retail sales decline is really a symptom of a much larger problem that finds its roots in a well-known marketing axiom.
An axiom that, over the last 8-10 years, has really been ignored because of the almost instant success of the online and supermarket model of selling retail products to clients.
You know what I am talking about... the "carry 3-5 nationally recognized product lines and the clients will come looking for the products" model that many salons have adopted since the late 90's.
Well, this model is now broken. Are The days of “Professional Only” gone?
Amazon, the internet, and corporate salons and retailers have transformed the nature of professional product retailing to the point where the phrase “Salon Professional” is meaningless. But does that mean that we need to forget about retail sales ever increasing again? The answer is no. If you just get back to the proven principles of the axiom called "product differentiation."
Look, the reason that clients no longer buy salon retail products in great numbers is because most of them have no idea of the differences between a "Professional" shampoo and a retail store shampoo! If the client has no idea about the "value" of the product then they fall back on the only thing that they do know and that is PRICE.
So today, clients are opting to go online or to their local supermarkets to buy the generic brands of the world rather than buy the "professional" products.