Removing Retail 😱May 30, 2022
One of the most lucrative moves any salon can make is removing physical retail from the space. By eliminating the retail, we can remove the retail shelves, and by removing these two things, we can minimize or remove the support staff and front desk.
For those with large retail spaces
Minimizing the retail portion of your business allows for more stations. More stations will allow us to can employ more people, and at Destroy the Hairdresser, we have a saying, "employ people, not products."
We have worked with many salons that have large retail spaces. By removing the retail and increasing the number of stations in the salon, we have increased salon profitability up to 58% in just nine months.
“So many salons believe that selling retail makes them money, but when you ask them to show you where that money is they can only show you an inflated cash flow. This type of selling is what keeps salons owners on a hamster wheel destined for burnout or possibly closure.” – Cyd Charisse
The buy-in required by most retail companies is expensive and sets the salon up for financial disparity from the start. A relationship that requires you to be in the red before you have had a chance to start is not a relationship worth entertaining.
To soften the blow of a costly buy-in, product companies will promise education points or back bar points; some will even offer free shipping and more. However, none of these things are free because you are inevitably paying for them in one way or another.
The 100% mark-up suggested or required by product companies is not enough to create a real profit. When we buy a product for $10 and sell it for $20, we are back to $0, and then we have to purchase this product again, which brings us back to -$10. When retailers sell other items such as a couch, the retailer buys the couch at cost and then marks it up over 100%. So a retailer may buy a sofa for $100 and sell it for $800, which leaves them with a profit of $700. So unless we are marking up products over 100%, the hamster wheel of retail sales for salons continues.
Destroy the Hairdresser has a solution for this nonsensical process, affiliate links, and online marketplaces.
“Product companies have been telling salon owners for years that product sales create client loyalty. This may have been true in the past, but not in 2022.” – David Bosscher
As if this wasn't enough to start removing the retail, we can also look at the foolish concept of product commissions and benchmarks for hairdressers. Many salons will offer a commission to stylists for selling retail as an incentive to continue pushing products. This process cuts into even more "profits" and has minimal effect on how hairdressers sell products. Besides, 10% of a $20 product is only $2; this is quite laughable when you think about it and is not incentivizing anyone.
The other mistake salon owners make is benchmarking retail sales. So many salons will not allow stylists to increase their pricing due to a lack of retail sales. This method of building a business is abusive and quite stupid for the salon owner. Limiting a stylist's ability to increase their pricing based on retail sales is hurting the hairdresser and decreasing the actual profit of the business. It's another lie told to salon owners by product companies to keep the focus on sales and not service.
“The fastest way to make a profit in a salon is by doing a haircut. Little to no overhead, pure instant profit. Not to mention, it’s what we love. A hairdresser would have to sell over 100 bottles of shampoo to even get close to a reasonable haircut price, so why not just do what we love and make money?” – Cyd Charisse.
Receive a link from your favorite brands and make a larger commission with no overhead. Our favorite affiliate brand is Hairstory. They have pioneered the affiliate link from the beginning. Not only do they truly payout the hairdresser, but their products are phenomenal.
Online market places such as Salon Interactive allow you to brand your own page, select your favorite products, and sell directly to your clients and followers while making a large commission with no overhead.