353 A Salon Owner's Guide to Negotiating With Product Manufacturers

When I opened my first salon, I was exactly the kind of salon owner that I'm talking about in this episode. I was passionate about the hairdressing industry. I loved the creativity and the craft. I loved the clients. I loved the team. But I didn't understand business. It was a classic case of you don't know what you don't know. And amongst the many things that I knew nothing about is what I refer to as the dark arts of negotiating with product suppliers, and that is what we're going to talk about in today's episode. I'm Anthony Whittaker, and this is the Grow My Salon Business podcast. Now, just to be clear, this is not a let's bash the manufacturers episode. This episode is about giving salon owners a broad overview of what's involved in the negotiating process when dealing with manufacturers and suppliers so that it's a win-win for both of you. So let's get back to my personal experience for a moment. Just before I opened my first salon, I contacted Wella purely because I had worked for Sassoon for 10 years and they used Wella color, and I figured that if it was good enough for Sassoon, then it's going to be good enough for me. Now bear in mind, I weren't and aren't a colorist, but I would employ a colorist and tell them that Wella was our color line. Then for the styling, care, and retail range, I happened to choose Redken. This was when Redken was still a privately owned company. So in both cases, the nice people from Wella and Redken, and they were both very nice people, met with me and I set up an account and an opening order. And I remember that the Wella rep said to me that they were going to put me on a 20% discount, and I was amazed and I thanked him profusely for his generosity. But here's the thing, in my naivety, I didn't understand that nobody paid the full price or list price, as it's called. It was really just a matter of what discount level you were on. And more importantly, I didn't understand supplier relationships, commercial negotiations, or how any of that side of the industry actually worked. So you could say that in my naivety, I was like the proverbial lamb to the slaughter. I thought that if I just worked hard and did good hair and built a great salon, that everything else would just fall into place. And when it came to suppliers, I was very trusting, probably too trusting in my naivety. I assumed that the people I was dealing with were simply offering me the price. I didn't realize I was stepping into a commercial negotiation that I didn't even know that I was part of. And I see the same thing today in salon owners all over the world. Now, different countries and different companies will have different structures. But when it comes to the salon owners everywhere, there's usually the same lack of understanding about how the game actually works. Now, before we go any further, it's important to understand that not all countries operate the same way. In some countries, the majority of salon owners deal directly with the manufacturer. In other countries, particularly in the United States, the salon owners are sometimes dealing direct with manufacturers, and other times they're dealing with distributors who represent