The truth about "professional" product pricing.
Have you ever wondered why the products you're sold at the salon or the spa are so damn expensive?
And RARELY are they all that they're cracked up to be?
But, you went along with it - and you keep going along with it - because other than you, who knows more about your hair or skin than the person you've entrusted to maintain it?
It’s no different than a doctor prescribing you some medication. Blindly, you’ll most likely agree. They’re your doctor.
Well, I'm here to shed some light on all of this for you. It’s a cold hard truth so beware. And the truth hurts.
We all love our hairdressers and aestheticians - but they’re ripping you off. The good news? It’s not their fault. But you’re still getting ripped off. Keep reading to see why.
It all boils down to "the distribution network" in the beauty industry.
How it works is like this:
A brand makes a product that it would like to sell. It has two choices when figuring out how it would like to sell it.
1) It can sell it directly to you. Brand > You
2) It can sell it to salons/spas who then sell it to you. Brand > Salon/Spa > You
All products follow this generalized model. In the beauty industry - therein lies a bit of a problem.
There are way, way, way too many salons, barbershops, spas, med-spas, whatever for one brand to reasonably reach, let alone even figure out who and where they are. So they find a "distributorship". A middleman.
This is a company that has all of those salon and spa contacts, and already sells them something (from other brands).
In order to perform the task of selling a brand’s product to salons/spas, the distributorship obviously must get paid. Again, this scenario is commonplace for most if not all industries. Sales reps, agencies, distributors, licensees etc, are all just links in the chain of getting the product a brand makes, to the end user - you.
Brand > Distributor > Retailer > You
And of course, each link needs to be paid for its effort in moving the product along. In most industries, commissions are between 8-20% for selling someone else's product. Not in beauty, though.
Here's how the cosmetics industry differs. It's how much they demand to get paid. AND how many distributors are in that chain.
Things to know:
1) ALL links in the beauty sales chain want to sell your product - to the next link - for DOUBLE what they paid for it.
2) There are between 2-4 EXTRA distributors in the beauty sales chain compared to other industries.
But, in most cases, it looks like this -
Brand > National Distributor > Regional Distributor > Salon > You
So, to keep it simple - say a brand can make a product for a cost of $10.
Brand sells that $10 product to a National Distributor for 20$. The National Distributor sells that $20 product to a Regional Distributor for $40. The Regional Distributor sells that $40 product to a salon for $80. The Salon sells that $80 product to you for $160.
Insane right? A product that cost $10 to make is being sold to you for $160.
That's A LOT of fingers in the pie for one product to get sold.
And here's the other thing - there's not THAT big of a market for $160 beauty products! So one of two things happen to get that price down.
1) The brand - to keep its retail/shelf price lower, sells it to the master distributor for just enough to cover production and other costs, and pocket a little extra to hopefully produce a little extra next time. Maybe that gets this $160 product down to $110. Still insane, but if the product is great and people like it - it works.
2) The brand DRASTICALLY dilutes its formula, filling it with meaningless ingredients that basically just take up space, to cut costs. Sure - some of the "good" ingredients are still in there, but in such tiny amounts that they're basically non-existent, and are used simply to be present on the ingredient list - so that brand can talk about them. Ingredient Marketing x Label Washing. Oldest trick in the book.
Maybe that gets this $160 product down to $110. Even more insane, because now the product is a fraction as effective as it once was, and still $110.
Do you see why you’re being ripped off now? Like i said, it’s not your hairdressers fault. It’s just the way the industry is, and always has been set up! It hasn’t changed in a century. And too many middleman are making too much money to ever go away.
Now, you’re probably asking yourself why I’m sharing this information with you. And to be entirely honest - it’s partly to make myself feel better.
But mostly, it’s to help you make better decisions when looking for any of your personal care products.
You see, we explored the option of selling through salons and spas. The product is a perfect fit. But, in order to do so, we would have had to follow the same pricing model. Each and every one of our products would have been around $200 (!!!!!).
We simply didn’t feel right doing that. Nor did we want to dilute our formulas to bring our costs down.
So if you see any of our products at a salon, or at a barbershop, or in a med-spa, it’s because we picked up the phone and did it ourselves. If you see any of our products in a department store or a lifestyle boutique, it’s because we picked up the phone and did it ourselves.
And here we are, coming to you directly, with little to no digital marketing experience - again, doing it ourselves - with the hopes that you’ll like everything you’ve tried enough to share it with someone you love.
If only to save them the frustration of having bought an insanely expensive product for no other reason than it got bought and sold 5 times before it got to you OR a cheaply made product, for a not so cheap price, because of how outdated one specific industry’s sales chain is.
Fin.
