This may lead you to wonder whether you should lean toward quality products and services, and charge a bit more, or quantity services and low-cost products to keep prices low. We will discuss that conundrum here and explore which of the two better benefits your bottom line.
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With prices for goods increasing, finances are tight for your clients.
This may lead you to wonder whether you should lean toward quality products and services, and charge a bit more, or quantity services and low-cost products to keep prices low. We will discuss that conundrum here and explore which of the two better benefits your bottom line.
Quality Nail Service
Clients who frequent nail salons expect a clean and sanitary service environment and an inviting atmosphere. Service providers are expected to be professionals, knowledgeable about their craft and the products that they use. The concern for the health and wellbeing of salon clients and staff is the byproduct of a salon’s adherence to government regulations as a minimum benchmark for quality. Nail salon clients view the quality of their nail work days after their visit to the salon, and they expect it to last.
Nail salons that embrace a quality-over-quantity ethos attract loyal clients who don’t mind paying more for abovestandard services as opposed to shopping for the lowest price. As a result, the quality salon can charge fairly and operate profitably. Competition based solely on price is never a win-win.
Quantity Nail Service
Some nail salons set a price for services based on an estimate of the time needed to complete a service with a goal set on the minimum number of services per day each provider should deliver. Oftentimes, these estimates are unrealistic given a new provider’s limited experience. Service providers who pursue perfection in their work won’t last long in a quantity-based environment.
Service providers must work efficiently to turn a profit and remain open. When services are priced too low because of constraints from competitors, services could be rushed and quality compromised. Furthermore, the service providers could feel overworked, stressed and unfulfilled. The salon could end with a high turnover of service providers and inability to retain clients.
Quality Nail Products
A nail product with ingredients mindfully chosen based on effectiveness, sustainability and absence of toxic chemicals speaks quality. A quality product does not sacrifice these attributes for lower price. Packaging aesthetics do not necessarily represent quality.
Higher-performing product lines can elevate your service menu offerings and minimize your per-service-time investment, synergistically boosting your bottom line. Salon clients who experience a quality nail product applied by a knowledgeable, trained service provider will feel safe having the salon service done. They will also become a loyal customer who recommends the salon to friends and relatives. Service providers are confident using a quality nail product because they understand it will positively impact the quality of their service. However, we know that the provider’s skill and attention to details are equally important to the overall results.
Low-Cost Nail Products
The pricing of a product depends on the quality of the raw materials, labor costs and overhead expenses. When a product is unique and made in small batches, the manufacturer is unable to achieve the economy of scale achievable in a large production situation with everything else being equal, such as the number, compensation and quality of staff, location and condition of facilities, adherence to government regulations, investment in research and development of new products, commitment to social responsibilities and other cost considerations. A manufacturer who sells a product that is not unique to a larger population can produce this product in larger batches at a lower cost. The brands selling this product are thus able to charge less for their branded product. Because their cost for the liquid product is less, they can spend more money on packaging and marketing to differentiate themselves from their competition.
Using lower-end products might alter their view of your services. If a client leaves you with great-looking nails, but their polish becomes ruined later that day, it reflects poorly on your nail business’ service. Risks include a potential increase in service failures such as premature peeling, nail damage, harm to the salon customer and poor salon reviews. As described above, manufacturers price products they provide in careful consideration of their total cost plus a healthy profit margin to secure their existence. When manufacturers succumb to market pressures to lower their prices, they risk compromising quality in favor of quantity just to stay in business.
Profit Margin Analysis
To simplify this profit and loss analysis of a salon using a quality-based versus a quantity-based product, we will keep other business costs equal except for the time to complete the same service. We will also link the quality-based product with the quality-based salon and the quantity-based product with the quantity-based nail service.
Quantity salon. The quantity-based salon charges clients $25 for a manicure and uses the following products.
- Acetone for nail prep ($10 per gallon/3.8 liters = $0.005 per service)
- Base coat ($5 per 0.5 oz/15 ml = $0.075 per service)
- Nail lacquer ($5 per oz/15 ml = $0.195 per service)
- Top coat ($5 per oz/15 ml = $0.125 per service)
- Silicone-containing drying drops for a pseudo-dry ($20.50 per 0.91 oz/27 ml = $0.48 per service)
Pseudo-dry means the surface is not tacky because the silicone creates a slick surface, which results in polish appearing to be dry in one minute due to absence of tackiness when touched lightly with fingers. This salon imposes a completion time maximum of 25 minutes for the service provider. Total product cost = $0.88. Product cost per day for the 15 manicures = $13.20.
Quality salon. The quality-based salon charges its clients $50 for a manicure and uses the following products.
- Vendor-supplied special prep ($31 per 32 oz/960 ml = $0.051 per service)
- Base coat ($10 per 0.5 oz/15 ml = $0.15 per service)
- Nail lacquer ($10 per oz/15 ml = $0.39 per service)
- Top coat ($10 per oz/15 ml = $0.25 per service)
Note that no drying drops are used, as they are not needed. The salon allows the service provider up to 45 minutes to do a quality service. Total product cost per service = $0.84. Product cost per day for the nine manicures = $7.56.
Quality Over Quantity
The quantity-based salon accommodates 15 manicures per day, or $375 revenue per provider. The quality-based salon accommodates nine manicures per day, or $450 revenue per provider. You can see that the quantity-based salon spends more on product use, yet achieves less revenue than the quality-based salon.
The quantity-based salon spends more on product use at $13.20 for 15 manicures compared to the $7.56 the quality based salon spends for nine manicures. The quantity-based salon generates less revenue per day and has a higher risk of clients coming back shortly after the service to have their polish job re-done due to inferior results. Clients may smudge their polish leaving the salon. Re-dos are costly as they are provided at no charge and take time from generating new revenue. Quality over quantity is hands down the best choice for salons of every service level.
About the Author:
Vivian Valenty, Ph.D. (@nailpolishdoc), is the founder and president of VB Cosmetics, the creator and manufacturer of Dazzle Dry. Valenty earned her doctorate in chemistry from Penn State University. She’s created innovative professional nail products throughout the past 33 years.