Products - where do you buy yours??

[The Geek]

A diverter is someone (or a company) that generally buys bulk amounts from distributors (who generally are well aware that the buyer is a diverter). The bulk amounts can be stock that is either out dated or over-stocked. However in most cases, it is stock that the distributor knows will be sold to areas and/or businesses that violate the distributors contract. It is just your basic, average greed at work.

For instance, Bob's Beauty Supply may sell off a large amount of Professional Product to Company X for a very small % increase over cost. Because it is a large amount, a small % can equate to a decent amount of money. Company X then sells the product to Wallmart, Target, QVC, etc...

This is called diversion and in this case Company X is the diverter.

The problem here is that it bypasses the professional, the manufacturer and it greatly weakens and cheapens the professional industry.

As mentioned earlier; the affect of diversion can be seen quite dramatically in the professional hair salons in the USA. They bring on new, fantastic lines, invest in the product lines growth, increase consumer demand and market share to the point where a diverter sees an opportunity. Suddenly, the brand starts to appear in many common retail outlets, usually at a bit cheaper than the professional salon (because of the bulk buying power). This in turn 'cheapens' the brand, the perception of quality and more importantly; cashes in on the investment of the salon professional (who then drops the line for the aforementioned reasons).

This is a cycle that happens on an almost predictable level. New products become popular, then diverted. Professionals get screwed and the brand gets cheapened. The professionals drop the line in favour of something that isn't cheapened by diversion which in turn lowers demand and credibility for the diverted products. Soon after, there is less demand for the products which in turn means the major retail outlets no longer need the items as they doesn't sell as well anymore!

It is a really ugly cycle where everyone ends up losing. If people would simply support their salon professional, this wouldnt happen.

HTHs!

 

[Snugglepuss]

Cheers for that info Sam :green:

Presumably that means as well that if the product ends up in the likes of Walmart, then there could/will be new and exciting stuff in the pipeline. This will then mean that the Salon owner, will lose out at least two fold and more, if I have understood you correctly!

Firstly, the salon owner will have had to buy the products at a higher cost from the distributor than company x

Secondly, because company x has sold it onto large retail outlets in bulk, those retail outlets can also sell it cheaper than the high street salon!

Thirdly, because the profit margin on those products, doesn't have to be as high as those of small salon owners, then if it doesn't sell as well, they can do a buy one get one free type offers or just cut the price etc, which of course the salons can't do because of their overheads etc!

Fourthly, because they are looking for a quick turn around, they will have to a certain extent more cash flow and reinvest in other products whereas the high-street salon owner is struggling to sell items they bought months previously ....................

OK I think I have answered my own questions...........

The light dawned for the geek with the mushy head and scarpers exit stage left, to go and read Michael E Gerber's "The E Myth Revisited" to see if I can champion the cause of the small salon owner :hug:

BTW, why has diversion impacted more on the USA than here in the UK??

 

[bombini]

Thinking about it I do get all of my hair and beauty products from 'official' distributors and as far as I know have paid full RRP or the trade price if it is something I stock but when I think of other things I buy like clothes etc then I do search on the internet for them cheaper.

So if I see a really nice designer top in a local boutique I KNOW I can find it on internet for at least £20 cheaper and I do, until now ive never really thought about it but I am taking trade away from the local shops so guess im a hypocrite really :cry:

I have mixed thoughts on QVC as I do feel it promotes salon brands and encourages clients to have the treatments but it does feel like less of a professional brand.

I offer a product loyalty scheme in the salon and give samples with every purchase that way clients have more incentive to buy from me than boots, qvc, hof etc or even another salon. The only time this doesn't work is with OPI laquers because clients always seem to know someone that can get it cheap from 'sallys' !!

 

[judyb6]

As a therapist who uses Elemis, OPI and Bare Escentuals in the salon, QVC can be both your best friend and your worst enemy.

There are lots of premium brands on QVC, as we all know it doesn't necessarily mean much as it's usually diverted stock, but it does seem to be a badge of honour for a brand to be featured on QVC. 'In good company' as it were. It does seem to raise the profile of the brand in the consumers eyes and it certainly raises awareness.

However, I'm sick to the back teeth of getting clients in my salon who've spent £100 on 'Today's Special Value'. Yes, the retail vaule was probably over £300, but it's always a mis-match of products just lumped together. One 'hero' product and the rest is the products that they obvioulsy can't shift! Why don't consumers see this!!??

Between them, my clients and the salon that I work for has paid for the training that enables me to use and prescribe Elemis products effectively, yet all we get is people who have bought cheap on QVC, coming in wanting to know how to use the products they've bought and if they're even suitable for their skin!!? I've always believed that buying your skincare from a salon is not the cheapest way to buy products, but you're also buying the knowledge, integrity and professionalism of your therapist to sell you the best products for your skin and ONLY the best products for your skin.

The same goes for suppliers. I also have my own mobile business and I only ever buy my products from the distributors. It's the only way I can ensure I get the support, POS, frequent updates and relevent training for the products. I work with a girl who 'piggy-backs' off someone elses Dermalogica account and it annoys the hell out of me. Shame on them both. :Grope:

 

[Doorie]

Just a thought, but we all complain (well some of us..:lol about the effect the cheep but not so great nail techs have on our business...how the NSS's that pop up all over the place take our custom...i think its much the same.

I can see how the distributors feel with having these other places popping up who are not registered distributors the same as i can see how we feel having these NSS popping up down the road.

As the NSS cheapen what we do so the unregistered distributors do the same.

Thank you.
this is exactly my thoughts on the topic, and what I tried to explain to some girl the other day who was bitching at Ebay (not allowing cosmetic sells/buys for France to make it short) and is ALWAYS bitching at the ones working black.

so well. I did vote distrib ALL THE WAY. but I distribute so it's in the room behind me

 

[Martin Duffy]

I have only ever sourced my products from the official distributors, and am well aware that with Decleor for example I could get it cheaper elsewhere. However, I have received excellent training from the various skin & nail houses I have used, as well as benefiting from the invaluable advice and help from the company reps who come to visit me periodically; I like to think this is all part & parcel of what I'm paying for. The only thing I go to my local salon supplies for is cotton wool, eyelash tints & so forth.

 

[JANEY K]

Local and UK distributors for professional products, i go to art and craft stores for the little bits such as decals,rhinestones..ect..ect...

 

[LipstickLady]

I learned the hard way, trying to save money. I USED to buy from QVC, HSN (Home Shopping Network) and ebay but eventually discovered I was getting either a mis-match of products, expired products, re-distributed from large batches of old packaging and ugh, yes, products that appears to have been "reasealed". YUK.

Since, I've only purchased directly from company reps or distributors that call on me - those that I have a business relationship with who represent the company legally and ethically and provide training if need be for the product(s). I still get some good deals, depending on the volume of purchase and of course, I'm reselling them at a small profit or using the product at a profit from my services. I'm also a distributor for a few companies that I love, an opportunity that when presented, I usually grab, so I can order direct from the manufacturer and with an immediate discount. I haven't see any mention of this here.

I've really thought long and hard about how your end of the world respects the independent shops, the little guy as we call it here commonly, and realize that I too should be supporting my local supply stores/shops. That said, I did some "visiting" this past week and introduced myself and everyone I met said they'd give me a "professional discount" so I'm one happy camper!

Thanks for the opportunity to chime in - you're such a great group.
love, kelly

 

[swanner]

Slight hi-jack please!

How do you find out where your nearest wholesalers and distributors are?

Ive almost qualified, just waiting for my last exam paper to be returned to me with a big fat PASS on it hopefully! but I have no idea where to buy products from?

At the minute I am (hiding head in shame) buying bits n pieces from all over the place but would like to purchase items from one place if possible.

In some ways its helped me because Ive found certain www companies better than others but I would like to have someone at the end of the phone that I could call and raise queries with or question about new products.

Any help would be appreciated. :hug: