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Is there a market for Natural Hair Beauty Supply Stores?

October 20, 2011

Many of us know that the beauty supply industry is a $15 billion industry where the typical store generates anywhere from $300,000 to $800,000 annually. However, many don’t know there are several different types of stores. There are stores that sell equipment, are OTCs (Over-the-Counter) stores, professional stores and Hair & Wig stores. Most only recognize the most popular type of store, which sells a mixture of products that appeal to do-it-yourselfers and professionals. These stores are broken down into 3 main categories: hair care, skin care and nail care. Products pretty much fall under one of these categories, whether the products are equipment, chemicals, hair, or accessories.

Recently, I’ve been asked my opinion on the potency of Natural Hair Beauty Supply Stores. Because of the difficulties many find in trying to break into this industry and compete, Blacks are now considering capitalizing on the growing natural hair phenomenon in the market. The fact is the difficulty to get into the beauty supply business is sensationalized. There are radius policies that many distributors enforce; where they only allow a certain number of stores within a particular area to carry their brand. However, this is only a policy that “some” of the most popular hair manufacturers enact. There are no radius policies for distributors of equipment, chemicals or accessories. However, these policies have gotten so sensationalized and exaggerated that the policy has emerged into it being a blockage that inhibits an entire store from opening within a certain distance from another one.

Anyways, I digress. The point that I am trying to make is the only major obstacle that stops Blacks from opening stores of their own and being successful at it is ourselves. I believe natural hair stores can be very successful. There is no question about it. The marketing of particular products, especially hair brands, is what has created the demand for Blacks to buying them up like hotcakes. The truth is there are much more natural hair goers than we give ourselves credit for. Women who wear their hair natural purchase wigs and weaves too. Plus, the vast majority of men are also natural. Yes, men shop at beauty supply stores too. When we account for the customers’ purchasing decisions, much of what they buy and much of what stores carry cater to the natural hair. I think we have placed natural hair wearers in too small of a box, only counting those with twists, braids or dreads as our natural hair population while we forget to through babies, men, boys, and senior citizens into the pot.

The Asian manufacturers, distributors and retailers have done a great job at predatory dumping. This is when businesses price their products severely under market value or under the competitors pricing when the business has competitive advantage because they either manufacture the product at a cheaper price or they have ownership of a large portion of the resources needed to manufacture the product. In predatory dumping, the prices are only temporarily depressed so as to drive out the competition, increase market share and establish a loyal customer base. After these three are established and they are dominating the market, which can take a number of years, they drive the prices up and exploit the customer. This is why it is called predatory. They prey on the customer and then dump all over them. Their tactics has made us assume the top branded products are the only thing on the market. We overlook smaller independent manufactures with great products, much of them black-owned.

To be honest, carving out a niche in this industry will only give us a long-term edge if we work harder at being top-notch business owners and become spending-conscious consumers. When we break down the dynamics of business development in our society, the true people in control is us. We often just don’t realize it. Businesses can use Push Marketing to persuade us to consume a particular product or business but we can utilize Pull Marketing to instead tell them what we will support. Over the years, we have allowed the tail to wag the dog and it has left us as the largest consumer group but, yet, with the highest unemployment rate of any group. It makes no sense. So yes, natural hair stores have its place in our community. Once we realize this target market is bigger than we assume it to be and we have the guts to get in and not wait for some other nationality to break ground for us.

Devin Robinson is a business and economics professor and founder of Beauty Supply Institute. An organization that trains, educates and consults with individuals interested in opening beauty supply stores or improving existing ones. For more information visit www.beautysupplyinstitute.com

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4 Comments leave one →
  1. October 20, 2011 10:20 pm

    It is almost staggering to think Madame C.J. Walker was a black female millionaire, long before there was ever an Oprah Winfrey and to think the wealth came from hair products and the proper distribution of those products.
    From then until now we all can conclude blacks have been in a state of sleep. While we were sleep the Asians capitalized on the market this we all can agree.
    However, their strategic position ( from the start) was designed for a specific purpose and that purpose was not to restrict blacks, from getting into the market. we were a sleep, therefore we were not a factor. We have awakened now and realize some things and desire to barge into a field ,we feel we are rightly deserving. Wisdom would dictate we observe and learn and then proceed.

    Geographically distribution was established by Asians to ensure that all Asians partaking in this venture would profit and benefit from the process.
    Stores was established geographically to enable each shop owner to penetrate his/her own region. If there is a Korean owned hair BBS on top of another , rest assured the demographics are there to support such a move.

    Many Asian owned businesses are family owned. The goal was to enable families to build wealth that would be passed down from generation to generation. There was no competition ( blacks) and they did not see the benefit of competing with one another. Therefore the structural design was genius. Their greed( overly inflating prices) and rudeness( to the black consumer) has led to the crumbling of this structure

    Today as blacks emerge on this truth that the market is worth billions, we have often times no structure now every bodies momma’s sister’s brothers child is selling some wigs and weaves. Out the trunk, on the hood and the market value will soon decline if this trend remains the norm and we will be no better for it.

    The possibilities of what could be, may not be if we continue to wallow in ignorance and not understand it is not only in the product but the design ( distribution). Without education and a structured plan we as blacks will not see the wealth opportunities that our Asian counterparts have experienced in this very market.

    Yes, there is a market for natural hair, talk about Walker! Yet today your biggest and well known producers of natural hair products do NOT employee Walkers mode of distribution, opting rather to target venues that would build their wealth alone. Until we have a true passion for the betterment, of others and not just ourselves and employee a mode of distribution that mirrors that we can yelp all day long it is them, however I conclude it is us. Good Post it stirred me to respond

  2. October 24, 2011 12:16 pm

    Thanks for this post professor Devin Robinson! Being in the natural hair and skin products business over the last 5 years, has made a big different in many of our customer’s life. I founded that many of the African American people did not know that natural products were good for them, some do not even know much about them. After testing and still testing natural products, I found that these products should be expanded to as many people as possible. They can make a big different for our hair and skin, and some of these products you can use in your daily meals. Not only will you nourish your skin on the outside, but also from the inside. It only takes you to make a different for yourself and others. But in order to achieve this, we must work together, and expand our mind, body, and soul…

  3. December 2, 2011 4:17 pm

    I am doing research now for this very idea here in Chicago. I have recently gone natural and getting products has become a daunting task. I plan to get this store up and running by summer, I think with natural products we have the ability to take back what belongs to us!

  4. January 25, 2012 1:50 pm

    Again Prof Devin , your right on the money with your point..Being a 2nd generational natural hair care manufacturer here in Cincinnati, my mom, when she started this company in 1982, always believed in the power of black women, and how their natural hair impacted and intensified that power in the form of their self esteem, self-awareness and self-empowerment..

    Today 30yrs later the black natural hair care market has caught up with my moms vision, and were here right in the thick of it.. So I’m saying, this situtation and timing has been long coming, and its time to capitalize big on this niche market before someone (Asians) beat us to the punch… It seems right now,the Asians, don’t really respect the dollars of the natural hair care market, and do’nt really believe that a true market exist,, all they know is chemicals and hair..!, thats why we must act now !! Once they see it and believe it, they’ll be all over it..because u know theyre really just followers and knock off artist..

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