Ask salon owners their goal for 2023, and they’ll tell you, “growth.” But increasing the bottom line is tough when the cost of goods continues to rise.
Savvy owners don’t need to worry about inflation. Just like any other industry, they pass price increases on to the consumer. Using Vish, owners are setting bespoke prices, reducing inventory costs, and eliminating waste. The result? A significant increase in salon profits.
Laura Atkinson-Wagner, co-owner of two Celebrity Spa & Salon locations (with sister Leah Lucas) in College Station, Texas, has been using Vish since October 2022 and says she’s finally able to keep up with manufacturer price increases.
“Our color manufacturer typically does an increase four times per year,” she says. “So if you’re charging $100 for an all-over color, and at the start of the year, $10 of that $100 goes to the cost of the product, by the end of the year, the product cost could rise to $13, but our service still costs $100.”
“We were not raising our prices when our color manufacturer did—but now we are, and we pass it along to the consumer, just like the grocery store does when the price of milk increases,” she adds.
Post-pandemic, Laura says her clients have a newfound awareness of inflation and cost of goods, so it seems natural to pay for the color used in their service.
Optimizing Color Inventory
Laura brought Vish into her salons as they were about to make the transition to parts and labor pricing.
“Before Vish, we were just charging a service cost and eating the cost of the color. When we switched to a new pricing model and started using Vish full-time, we recouped costs and now we offset the cost of our color inventory.”
With Vish, Laura has been able to properly charge for her color services.
“We charge for all our color products,” she says. “Depending on the cost of the product, we charge wholesale or give it a slight markup (for example, lightener is more cost effective than color, so we can mark it up).”
“Inflation has been around 13-15 percent the past couple of years, so we implemented an 8 percent service increase and a 5 percent increase in color cost—making the maximum increase to the customer 13 percent,” Laura adds.
After three months of using Vish, her team sits at a little above a 90 percent reweigh rate. Reweighing the color bowl after a service refines color formulas and eliminates waste at the client's next appointment. With her entire team utilizing the system to its full potential, Laura is now covering the cost of her color. And every time her manufacturer increases prices, her salon does, too.
“Any chemical service is no longer a cost to the salon,” she says. “And my goal for summer 2023 is to mark up all color products the same as our retail.”
Driven by Data
Rewind to 2022, Vish collected never seen before data on color usage and costs from over 2,671,622 services across North America and the UK. The results? A compelling industry eye-opener. Now, you can access this information to use as a benchmark for your own color usage and pricing, and make adjustments to maximize your profits.
In 2022, Vish recorded over $20M in color mixed and was able to distribute how much of this cost was used on the client, wasted after the service and most importantly, how much of the color cost was charged for.
Discover if your salon is efficient with the Vish Rewind Data breakdown below:
Additional Revenue: Revenue captured by product weighed outside of set color allowances, charged to the client.
In 2022, Vish captured $17,500,000 in extra product charges for US customers.
By accurately charging for products dispensed, salons are pricing with precision, and manage any services or stylists that are dispensing more color than allotted within the service in real-time.
Average Appointment Cost: Due to the variety of color appointments salons offer, Vish found quite a range in the cost of color per appointment in the salons surveyed.
United States: $9.19 average cost of color per appointment
($4.20 – $25.20 cost range per appointment)
The range in appointment costs can be attributed to color efficiency. Like Laura, you can determine your pricing for additional products dispensed based on your salon’s clientele, how consistent your team is in reweighing, your competition’s prices, and any other factors that affect your pricing.
Top Service Categories: Every hair color service is dependent upon the color desired, the client's hair texture and length, the time allocated to perform the service, and the stylist’s skill level.
Vish collated data from the top five services among users, to display the average cost of product mixed and wasted. Here we can see how each service varies in cost.
The average cost of wholesale color per service:
1. Highlights (partial): $3.20
2. New Growth: $5.88
3. All Over: $8.09
4. Toner: $5.80
5. Glossing: $6.27/$0.62
The average waste cost per service:
1. Highlights (partial): $0.78
2. New Growth: $0.98
3. All over: $1.01
4. Toner: $0.70
5. Glossing: $0.62
The average salon that isn’t using Vish will typically see ranges that are 30-40% higher than those above. So, where do you stand? Are you pricing your services correctly? How do your numbers measure up to Vish users optimizing their product and waste costs? If you’re seeing high levels of waste, it’s time to start measuring and stop washing color profits down the drain.
Average Number of Bowls of Color Per Service:
According to Vish's Rewind data, the average number of bowls of color used per service for US and UK salons is 1.48. By comparing this data to your own salon's usage, you can identify areas for improvement and control inventory bloat.
Are you noticing a full bowl of color being mixed mid service and only a portion of the product being used? Work on helping your stylists become more efficient at the color bar, mixing more conservative amounts of color more frequently. With Vish’s mix more feature, stylists are able to choose the percentage of the original formula they want to mix mid service, resulting in a decrease in your average number of bowls per service.
Waste Cost & Waste Per Service: It’s no secret that waste occurs in every salon. Vish Rewind data reveals the average waste cost per service in the US is $0.88. By reweighing the bowl, refining the color formula, and incorporating product allowances into your pricing structure with Vish, you can avoid overspending on inventory and pass additional costs onto clients.
Join the Color Revolution
Take advantage of the benefits that come with using Vish. Not only will it help you control costs and optimize your inventory, but it also allows you to increase revenue by charging for products accurately. Start your Vish journey, and experience the positive impact that color management has on your salon's bottom line. Book a demo here!
“Colorists can see how much color they’ve mixed based on what they quoted the client,” says Laura. “So if they quoted $10 in product charges, they can go to the dashboard mid-service and see they’ve already mixed $8 or $12, helping them stay on track. It keeps them honest—they no longer mix seven ounces of color when they only need two,” she says.
Laura is just beginning to scratch the surface of all that Vish can do for her and looks forward to even more growth in 2023.
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Originally posted on Salon Today