August 2008

Lisa Kind - Editor

From the Editor | Lisa Kind

 

Diversion — Still the Hot Topic

I recently attended Cosmoprof North America in Las Vegas. My goal for attending was to learn about the newest products and companies and to hopefully establish some good advertising and public relations contacts.

During the weekend the hot topic in all of my conversations was—you guessed it—diversion. It is amazing to me how many different opinions there are. Some claim distributors drive diversion. Others insist manufacturers are the culprit. Still others believe diversion is happening at the salon level. Whom do you believe?

One thing is for sure. Stylists are getting frustrated and starting to take a stance to combat diversion. Here are a few excerpts (edited for brevity) of comments I received after the July issue of the Stylist focusing on diversion hit the streets:

Diversion is here to stay, and yes, it is growing. Recently, I noticed products on the grocery and drug stores’ shelves that promised they would never be diverted. However, these companies are now owned by L’Oreal. Coincidence?

I cut the hair of an owner of one of the grocery stores in my area, which also carries diverted products. I asked to meet the person who buys their cosmetic and toiletry line so that I may point out the “Professional Retail Only” label. She told me she buys directly from a distributor who comes into the store. The prices in the stores are not very different from what they are in the salon. If it is slightly higher, people will still pay more because of the convenience. When the manufacturers of the “Professional Only” products become accustomed to the profits, they will eventually go public and forget the people who helped promote their products.

If I sound bitter, it is because I am. I often think, “Why bother?”

What is my way of combating it? I sell a line that limits how many salons in the area can sell their product (similar to what Aveda does). My next step: private label. Yes, it can be a bit costly to start with, but at least I have the control.

— David Yerks, Palm Springs, Calif.

Over the past quarter decade, I have witnessed one of the worst tragedies within our industry that a salon owner and stylist could witness.

What I refer too is the idea that we are the reason for product diversion. Each time I read about this it makes me disgusted, and I am tired of the empty promises made by the holding companies.

No salon or stylist buys in such quantity to be able to support the needs of a national chain retailer. How many cases of product would we need monthly, I ask, to supply say Target, Nordstrom Rack, Longs Drugs, Rite-Aid, etc?

I ask stylists that are addicted to brand named products, “Why carry such allegiances when the holding company does not care about you?”

Take some time, and do your research in your local stores. When you see those famous brands on the shelves, divert yourself from those brands and go shopping for ones that keep the profits in your hands.

Just imagine no commitment contracts, no lies and no diversion. Besides, you will enjoy the markup.

— Darryl Manco, Pacific Beach, Calif.

We are not always aware of the impact diversion has on our bottom line, but it is important we do so. Diversion is ever increasing and looks, at best, only to increase corporate profits.

While beauty product manufacturers boast about their never-ending investment to prosecute the diverting offenders, it’s understood by most salon owners that the manufacturers and distributors divert the product themselves.

I recently chose to remove more than $5,000 of retail product from my shelves as numerous clients were apologetically informing me of their ability to purchase their professional haircare products at a significantly lower price from Bay Area retailers.

— Keith James, San Francisco, Calif.

My opinion, based on information and research I have done over my decades in the industry, is that retail outlets like Target and Wal-Mart, where we find many diverted products, don’t buy from salons or independent distributors. They go right to the manufacturer.

I am sure “Professional Manufacturers” are the suppliers to the retail outlets because only they can supply enough product to meet the demands of the Targets and Wal-Marts of the world. Buyers for large retail chains have confirmed this information for me. But don’t take my word for it; check it out for yourself.

These manufacturers generate a lot more revenue from consumer product sales in large retail outlets than through distribution or salons. However, if a manufacturer wants to stay clean, it can.

— Christopher J. Fatica, Erie, Pa.

 

If you have anything you’d like to add about the diversion topic, or anything else, email me at lisa@stylistnewspapers.com. I’d love to hear from you!

On a lighter note, at the show I also received eyelash extensions from Novalash artist Sophia of Houston, Texas. I have to say, I love them and receive compliments on them all of the time. Thanks to Novalash and Sophia for doing such an outstanding job.