How We’re Killing the Professional Beauty Industry

In one of my favorite articles this year, James Hobart chronicles the arc of the beauty industry over the last four decades. Those of us who have been around a while are all too familiar with the negative trends that have significantly contributed to our industry’s current state. For those of you who haven’t been around a while, here’s a brief summary: things are pretty bad.

Hobart’s article focuses on the growth (and the subsequent acquisition of) salon-exclusive brands by major corporate giants, and how those acquisitions and the popularity of the booth rental model contributed to the death of the beauty industry, but the blame for that decline can be shared with industry professionals, and the problems both groups caused have far more impact than the loss of “professional-only” products.

  • Beauty professionals’ wages are abysmal.
  • The large chunk of professionals (33% of hairdressers, 41% of barbers*, and a whopping 70% of nail techs) are classified as “independent contractors,” but are highly unlikely to actually be operating as legitimately self-employed (more than 80% of the time, the DOL finds they’re inappropriately classified and must work to recover lost wages).
  • Many salon owners choose not to act as leaders (non-employer-based salons are up 75%*), instead abdicating their obligations as employers and managers, creating a “survival of the fittest” environment.
  • Intentional exploitation of beauty workers is rampant, with salon owners committing wage theft, failing to meet prevailing wage or overtime obligations, and imposing unreasonable, overly-restrictive (and sometimes illegal) contracts on their staff.
  • “Professional-only” products have become a thing of the past, as most “professional” brands can be found lining the shelves of every major consumer retail outlet.
  • Discount salons and budget franchises specializing in cheap, fast services continue to dominate the market even as we begin to pull through the Recession, further contributing to the devaluation of beauty professionals and the services they offer.
  • The rise of the “Do-It-Yourself” Youtube generation has equated to significant losses, particularly in the professional nail care and skin care side of the industry.
  • Politicians and fringe groups continue to attempt to deregulate our industry, a move that would remove regulatory oversight and educational/training requirements, putting schools across the country out of business and countless consumers at significant risk. (I don’t even want to think about how fast a flood of unqualified professionals in the market would drop our service prices.)

…I could go on, but I think you get the idea.

Jaime and I have written about these issues from our perspective in the nail industry, but in this article I want to share the various ways salon owners and professionals themselves contributed to this decline, clarify the lessons we should learn from these issues, and propose ways to revitalize our industry.

1. Independence isn’t working for any of us.

The exodus of the salon-exclusive manufacturers can be traced along the same line as the decline of employer-based salon businesses. When professionals and salon owners made distribution difficult, manufacturers found faster routes to deliver product. They lost incentive to be salon exclusive, because salons lost the ability to move product fast enough to justify exclusivity. Sure, some of these manufacturers made the move to consumer outlets strategically, selling out to cash-in and capitalize on the reputation for quality that the salons helped establish, but if it were easier and more profitable to move these lines through salons exclusively and maintain brand integrity, perhaps they wouldn’t have.

The increasing popularity of non-employer-based salons has hurt us in more ways than one. Professionalism overall suffers when industry workers lack strong management and oversight. Salon owners can’t require renters or “contractors” to participate in mandatory training or to adhere to quality standards. They can’t control conduct, dress code, or dictate technique.

When salon owners abdicate this control over their employees, they lose control over the business overall and the result is an inappropriately casual work environment with multiple professionals working in direct competition under the same roof.

We can and should do better than that. I’ve written time and time and time again about changing our management practices and our compensation structures to work for us instead of against us. How bad do things have to get before people start listening?

2. Salon owners need to embrace their positions as employers and leaders.

Hobart’s article makes this point overwhelmingly clear. Those of us who have spent any portion of our careers in branded businesses directed by competent managers can attest to this fact: salons thrive under unity. When we all work towards a common goal with a common philosophy, we all do better. Our businesses excel, employee overturn is minimal, retail sales soar, and client retention ceases to be a concern.

When considering a career in this industry, we see tons of ridiculous statistics: “earning potential,” “median salary,” “projected growth rate,” and countless others designed to lure students into the career.

You know what statistics these same sites don’t brag about? Average career length.

You know what they don’t take time to explain? What “potential” means, or how it’s often falsified or calculated based on made-up figures that aren’t actually representative of the industry, or what the word “median” actually means.

Currently, 80-90% of all new licensees will leave the profession entirely before their first license renewal, or shortly after it**. (How much of that much-touted “projected growth rate” accounts for the exodus of fed-up professionals? Most of it.)

Certainly, some of those who leave are simply retiring, often due to common injuries sustained on the job (chronic hip/back/joint issues, etc.),  but the new licensees who drop out before the ink has dried on their license aren’t among them. Sure, it’s very possible that a good deal of these new graduates entered into the industry with false expectations (for that, we can thank the school recruiters for failing to effectively communicate the nature of the business and reality shows for delivering a false impression of the industry), but the top complaint I hear from licensees exiting the field is, “I can’t find a good salon to work at. All of them are booth rental or ‘independent contractor’ based. I’m not guaranteed a wage. The owner expects me to bring their business a clientele. They expect me to pay for product and pay my own taxes but follow their rules and work their schedule. They want me to sign an insane contract, prohibiting me from working within a 50 mile radius for 20 years…”

With an overwhelming majority of salons non-employer-based and/or utilizing circumstantially legal “commission-only” compensation structures, this industry just isn’t very employee-friendly, and that needs to change.

3. We need to stop flooding our local markets to the point of oversaturation.

I’m often asked, “Why didn’t you open a salon sooner in your career? Why did you prefer to manage?”

I didn’t open a salon until it became clear my market needed one, because I understand what market saturation looks like and how additional identical businesses in an oversaturated market dilute that market, making survival harder for everyone within it.

A smart business person evaluates a potential market and asks themselves, “Is there a need for my business here?”

When an area has fifteen salons in a two-mile radius, that area does not have a need of another damn salon.

This is why I’ve worked to establish and encourage friendships between local salon owners. It’s why I encourage potential salon owners to consider pursuing a management position at an existing salon instead. It’s why I have repeatedly chosen to act as a positive force within existing businesses helping to grow them, rather than to compete against them and fifty others in the same town. It’s why I continue to discourage salon owners from the rental model and loudly advocate for employer-based salons with focused management.

Bloomberg estimates that 80% of small businesses fail within the first 18 months.

Among all businesses, traditional beauty salons have the second highest failure rate.

With so many of these salons being placed in saturated markets, most of them non-employer-based, and with a good deal of even employer-based salons lacking management entirely, this should come as no surprise–and as a HUGE wakeup call for both existing and potential salon owners.

4. Salon owners and professionals must find better ways to compete and maintain relevance to combat DIY.

It’s time to start getting creative. We have to find ways to innovate in order to maintain (and hopefully gain) relevance.

When we look to the past, we see that a shift was made from serving the same clients on a weekly basis to serving a higher volume of clients on a less-frequent basis. This shift certainly hasn’t hurt us, but with the DIY crowd becoming their own beauty professionals in an effort to save money, we have to start finding ways to position ourselves as necessary. To accomplish this, our work must be truly irreplicable by amateurs. This means advanced education in marketable cutting-edge techniques, with mindfulness of our current economic climate and local economies.

Simply put: there must be a need for that service, it should be near impossible to replicate at home, and the cost to the consumer must be justifiable.

While no beauty service can be truly “necessary,” manufacturers have never had a problem creating products and services designed to be delivered by professionals. Recently, however, we’re seeing more and more of these products and services designed to go straight to the consumer market (clip-in hair extensions, DIY gel polish kits, at-home microderm kits). These manufacturers are finding ways to make us irrelevant.

It’s up to us to find ways to counter consumer brands and prove to consumers that we’re worth their money.

5. Professionals and salon owners alike need to involve themselves in the industry beyond the borders of their workplace.

This is our industry–everyone should be playing a role in its overall management. That means involvement in your state board, keeping informed on proposed legislative changes, forming connections with other professionals and salon owners, and speaking up when necessary.

What opportunities does this decline present?
How can we use these lessons to move forward and grow in a positive way?

In the nail industry in particular (and at this point, likely in the hair sector too), plenty of demand exists for a truly salon-exclusive professional brand, one entirely committed to supporting the professional community by tightly controlling distribution. A quality brand with a dedicated network of educator-distributors and a strong mission could absolutely dominate in a salon-exclusive market that currently lacks a trustworthy, pro-only line.

Salon professionals are desperately seeking positions in employee-based salons that guarantee compliance with prevailing wage laws and offer modest commission bonuses based on performance. These salons are also far more likely to attract and retain quality employees and maintain stability past the “failure threshold” of 18 months.

Independent educators and innovative professionals have immense opportunity to develop and share new techniques to an industry that is STARVING for education without a sales agenda. Artists and trendsetters, the time to shine is now more than ever. Mobilize. Get out there, inspire others, and get paid.

Salon owners can resume their positions as leaders and role models, building their business under a shared mission/philosophy and using their influence to uplift their teams, creating desirable, profitable, ethical workplaces that thrive, where employees have access to benefits and continuing education, and aren’t expected to assume any portion of the salon owner’s responsibilities.

We don’t need major companies to direct our industry. We can and should be developing innovative services and products ourselves. With the rise of crowdfunding and powerful social media platforms (combined with an increasingly tight-knit international professional community), we have incredible opportunities to gain funding and support for our ideas, to form connections with people in positions to help us facilitate their creation, and to establish distribution for them ourselves.

NOTHING is too difficult or complicated to do if you’re motivated to get it done.

Overall, we need to understand that returning to our Golden Age is relatively simple.

“I come from an era in this business where professionalism was everything and was exhibited by all players with a stake in the game.”

As an industry, we need to band together and work as a unified team with a common mission. It’s time to bring professionalism back. It’s time to vote with our dollars and only support brands that support us. The only way we’ll move forward is if we stop moving against each other. Let’s create long-term, successful businesses instead of solitary, short-term competitive cash grabs.

If you don’t have a stake in the game, quit playing.

*From the PBA’s Economic Snapshot of the Beauty Industry, 2015
**I’ll link to that study as soon as I find it again. Obviously, negative statistics like this are buried in search results that utilize the same keywords to spin the issue positively. (For example, Google “average career length cosmetology.”) If you have the study, please send it to me. I grow weary of slogging through page after page of school marketing bullshit.

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Tina Alberino
Tina Alberino
Beauty industry survivalist, salon crisis interventionist, tactical verb-weapon specialist, and the leader of at least a hundred workplace revolutions, Tina Alberino is known as much for her extensive knowledge as for her sarcastic wit and mercilessly straightforward style. She’s the author of The Beauty Industry Survival Guide and Salon Ownership and Management: A Definitive Guide to the Professional Beauty Business. When she’s not writing, educating, or consulting, she can be found overthinking everything, identifying problems people didn’t know existed, and stubbornly working to change the things she cannot accept.

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  1. I find it hard to believe there are no comments to this article, you ought to repost it! I was very moved by it!
    In the 1980s and 90s (17 years) I was very fortunate to work in a commission salon that was very professional. We were all on the same page with our goals and with our philosophies and I loved working there! I loved the salon owner, I loved my coworkers and I love my clients (and I still see the majority of those same clients today!) The woman who owned the salon was fantastic and I truly wish there were more of her type of business person around for our industry today! She really understood the biz and our salon success proved it. For the owners health her salon had to sell. The new owner had many personal problems that took her away often so she left the salon to run its self, which just doesn’t happen for long. I chose another commission salon and after 3 years realized it was a big mistake. Drama beyond belief as well as most everything negative you wrote here about. But, I toughed it out another 6 yrs. because I had my own strong clientele and was left to do my own thing. This salon finally became unbearable for me so I chose a salon suite. I’ve been in my studio 6 years and I love it! I think the suites have their place as a business model but not to take the place of a great salon. Whether a commission based salon, booth rent or salon suite it all takes lots of work, honesty and love for people and our profession to be successful. I really do wish every stylist could have the experience and enjoyment of working in a wonderful salon like I did back in the day! Could it ever happen again and be the norm for our industry?

    • I definitely will repost it! It’s been coming up in a lot of discussions lately, so it’s probably time for it to be reposted. My career was just like yours when I first started. I had a great boss who managed the salon well, great coworkers, and it was a wonderful atmosphere. The business thrived because of it. Not only do I think it can happen again, I believe it’s inevitable. Salon failure rates are so high that eventually, people are going to have to wise up if they want to survive past their first year or two. 🙂

      • I too had a great run in the mid 80’s/90’s working for a great salon with a strong leader and a talented, supportive staff! We sored with success and we all loved being at work! I miss those days!
        I too started renting space at a Day Spa which worked well for the most part for the greater part of 9yrs. but was difficult to maintain the balance between “talkative” services and “quiet” services…I then built a studio in my home with my solid clientele and for 8 yrs. did well until the economy changed and clients started stretching appointments longer or doing their own color at home to save money!
        It’s changed a lot in the 33 yrs that I’ve been in this industry…I recently moved to N.C. and it has been a major struggle to build a clientele here…it’s been 2 yrs and I’m still not booked solid…People aren’t loyal anymore in general and look for the best bargain over skills! I’m so frustrated and tired I’m ready to hang my shears up!
        I’ve put a lot of time, effort and money into my career with advanced training and becoming Board Certified in Haircolor and clients read articles or watch YouTube videos and think they know better!

        • The DIY thing has hurt us really bad, but so have services like Groupon and uninformed (desperate) professionals running constant “deals” just to break even. They don’t understand their numbers and most will cycle out in two years or less, but they keep graduating and the cycle literally never ends for those of us who make a career of it. It’s all extremely frustrating. I’ve been fortunate because I’m in a good market that’s devoid of competition and I cater to a niche, but that’s how a lot of salon owners and professionals are having to go. Specialization is becoming more popular and profitable. I wrote a post about that here.

  2. I am currently in cosmetology school and I enjoyed this post. I am an older student (42) and I work in an education/business environment. I definitely see the lack of professionalism in some salons I visit and in school as well. I decided to attend cosmetology school to get a trade under my belt. I have no desire to be a full time stylist but to be an educator of the business side of it. I am interested in the theory behind maintaining healthy hair and creating a professional experience for clients.

    The industry is being devalued on a daily basis by D.I.Y. However, the D.Y.I.crowd at some point will come to the salon to see us professionals to fix the mistakes of their D.Y.I. I think we can regain this industry by providing the education and customer experience to catapult us to the top.

  3. OMG! I have no words, this article is amazing. You said it perfectly how I feel about my salon and what I want for my clients. My motto is “bringing back the industry standard”. I live in an area where drive-thru nail salons, people are tired of, it is helping me build up Clientele faster then I thought. I’ve been researching brands to use instead of ones like OPI, gelish, orly, Essie because you can buy it everywhere now. CND has been so far the only one who has sold out to my knowledge! Even young nails is in Ulta.

    Our industry needs to take a step back and realize that, we are licensed professionals, we should be using professional only — but what is professional only like you said. It will take a huge voice, a huge movement, to wake up these companies. I think boycotting them could be the way but more damaging then not. I will continue to research my clients trust me, trust my advice, and will trust any product line I bring in. I just want the same for all places, we can all do better, be better, the idea used to be we all make it. It’s sad that isn’t the case anymore.

    • OPI sold out to Coty a few years ago, lol. Essie sold out to Revlon (I think it was Revlon–they definitely went retail in an official way two years ago). Young Nails has been showing up as “Lomasi” in TJ Maxx and other discount retailers for years.

      The reason these brands sold out is because professionals weren’t supporting them. The rise of the independent salon professional made it impossible to distribute and since they had to do what they had to do to stay afloat, they did the only thing they could do–go retail. My friend Ashley wrote a great post about this (regarding CND’s purchase by Revlon and subsequent move to retail markets in particular) on her blog, The Nailscape. You can read it by clicking here.


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