Tuesday, April 28, 2009

Choosing nail products to resell

Deciding to resell nail products is a major decision for any nail salon or school. In time it can allow to earn a regular income and one that's many times more than you can make as a nail technician working in a salon. But there are risks:

  • You will need buy stock. You may have the money to do this or you may have to take a loan - if so, can you afford the payments if sales are slow? Will you have to secure your home to obtain the loan? If the supplier cancels your contract, or you don't make enough money what position will you be in?
  • It will use up your time. If you are already working as a nail technician or running a salon, deciding to start selling products is like starting a new business. You will have to invest your time and money in marketing and selling, and this may reduce the money you make in the salon. It's very difficult to run two businesses at the same time - often one will suffer. If you have a lot of money then you might decide to hire someone to help you - just be careful it's someone you can trust who won't set up their own business later and compete with you!

You will need to estimate the time for your new business to reach break-even, this means to make a profit (and pay you a salary). Whatever time you estimate, multiply it by a factor of three - remember most new business fail because of insufficient money - they thought it would be easier or be successful faster that it was.

Find out if the manufacturer sells directly. There are few manufacturers who are happy to appoint local resellers but equally happy to make special offers via their websites and then poach the customers of their local school/reseller's. Some will also setup other resellers in your area if they think your sales are too low are not building fast enough - or worse they will cancel your contract and you could be left with $1000's of stock you can't sell. With some manufacturers it will always be tough for you to make money from selling products and build a long term business. So check the reputations of the manufacturers and talk to their out of state resellers to find out what the deal really is like when you buy in.

If you decide to resell, make sure you get a contract and understand what the manufacturers expectations are. I've heard a few stories lately about manufacturers that either don't give contracts or failed to give a copy of the signed contract to their reseller and then when they canceled the contract unexpectedly the reseller doesn't have a contract to take to their lawyer.

Don't buy into the manufacturers marketing or hype until you've proved it's honest. Good marketing does not mean it's a good product for you (or that it's even a good product) - it only means they are good at marketing. Look at who's behind the company and what their experience is in the nail industry. There's some fairly dubious claims out there so only believe what you can see, have tested or have been recommended to by people you trust.

Most nail technicians are not trained in business, so ask questions and get professional help. Some countries have government run business centers where start-up company's can get advice from experienced business people free.

I hope that some of these suggestions are helpful.
Bob Giblett

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