Price undercutting - your views?

[Miss Sylk]

I am to open my home salon very soon and i was just told not to undercut the other salons at risk of pulling in the cheap'os shall we say, the ones who wont be loyal and wil go elsewhere when there is an offer on there, it made sense! But, the reason i decided to be slightly cheaper (obviously ive worked hard on my pricelist working out costs/timing etc) is because i dont have the overheads of all of them, little bit worried its making me look cheap now, as for cost i can afford to undercut. hmmmmm.......

Im in a good, fairly affluent suburban housing estate.

How are you all doing it? id like to hear from salon owners in other types of premises.

xxx

 

[number1kitty]

But then your also offering a more private service than what a client could get at a salon.

If your good people will pay your prices no matter what you charge.

Take spray tanning for example, it costs roughly XX to do a treatment taking into account solutions, advertising, fuel costs etc. If I charged £15 like some round here I would only make £XX profit. If I charge more ~ which I do say £25 or £32 and the costs are the same I make more money for less work.

One person at £25 means I make twice the profit without twice the work, twice the time and trying to find twice as many clients!

Its not just about overheads, you have to take much more into account also!

 

[champagne]

Just a note to say be careful when putting prices on here, this is WWW and your clients could possibly find this.

Please dont take offence, it isnt meant xx

 

[Susie H]

Thank you Kitty, I have tried to make this point on a few threads and not really got through to peeps what I meant.
I replied on the other thread, but will say it again here:lol: if a little differently.
I live in nail bar heaven, the price for a set of pink and white L&P tips with clear is £20 They look rubbish, they lift, they're thick, no smile line, no blending, rings of fire abound and I point blank won't do them, my natural overlay is £25 and that's my starting price. My work is better then the nail bars, my products are better quality and if a client wants them well they can pay a fair price for them.
My waxing prices are a little less then the town price, this is because the council have just hiked the shop rents to silly levels so a brow wax has gone from £7 to £12 for example. My prices are pre increase, this is because, I don't pay shop rent, I don't pay business rates and I want people who will have gulped at these increases to not see me as cheep but to see me as fair, this is the price they are used to paying so they should be happy to continue paying it, provided I can give as good a service.
Next year when I have an increase this years town prices should still be in their minds so my modest increase of a pound or so across the board should be seen as reasonable.
What is not right as Kitty has said, is to work twice as hard for the same money, no one wins with this all that happens is you go out of business, the client has to find someone else and the suppliers have less money for R&D resulting in poor quality products.
Be the best you can be, use top quality products and stay organised:hug:
I would hate anyone to say about me, but she's cheep as chips, I want them to say, but she's really good.

 

[hannajadem]

I think the problem with a low of clients (especially round here where there are loads of NSS) is that they expect you to charge less than the NSS because you have less overheads, it hasn't entered their minds that there's a difference between a high end product and MMA, that there's a difference between taking 45 mins to do a horrible set which trashes the nail plate, and taking two hours to do a good, safe job which you have to charge more for.
I find it really difficult to educate clients on this. The best way is to get an ex NSS client who (usually) is amazed at the different process involved in doing a full set of pink and white, and then tells all their friends!!! I recently soaked off a set of a regular client who wanted to go from P+w to natural, and she honestly thought that after soak off, her nails would be horrid underneath, but she infact said that they were the nicest they'd ever been in her life!
I charge exactly the same as the most expensive NSS around here (28 for French), although my rebalance prices are slightly higher, but most people don't really ask about rebalance prices when they ring up for quotes. I just say to tham, 'It's only £28, the same as in town, and you get a cuticle oil included in the price'.
Most jump at the price, and I find that if you get a really discerning client after a good job, I quote my website, which states all the high end products I use, and has photos of my best work, so they know I'm not a cowboy lol.
I'd love to charge a bit more, but I think it's important to build up your rep first.

 

[cabinkel]

PLEASE! Learn from my mistakes:hug:
When I first left the last salon I worked in to set up in my log cabin at home, I was really worried as I had a regular income/hours etc. I made the HUGE error of putting my prices low to attract customers as I wanted to prove to myself that I had done the right thing. Well, of course my books were full fairly quickly, and I thought I had cracked it! How wrong I was! I was, (and still am) working a 12/13 hour very full day, and sometimes taking, (not earning, taking) about £70 for the day. At the end of the long and exhausting 4 1/2 day week, I was earning in my hand about £100, for a 55 hour week! The clients I seemed to attract were "cheap" clients. Those who loved the fact that they were paying £x for a luxury pedicure, and moaned like no tomorrow when I increased my prices by £1 after 2 years!!!!! It is so much harder to increase prices than start with them at a fair level.
Do not sell yourself short. I am only now, after 4 years at home, getting my prices to a level that is more realistic. I am still way too low on some things, but I certainly make sure I price any new treatments where they should be! Earn what you deserve:hug:

 

[number1kitty]

PLEASE! Learn from my mistakes:hug:
When I first left the last salon I worked in to set up in my log cabin at home, I was really worried as I had a regular income/hours etc. I made the HUGE error of putting my prices low to attract customers as I wanted to prove to myself that I had done the right thing. Well, of course my books were full fairly quickly, and I thought I had cracked it! How wrong I was! I was, (and still am) working a 12/13 hour very full day, and sometimes taking, (not earning, taking) about £70 for the day. At the end of the long and exhausting 4 1/2 day week, I was earning in my hand about £100, for a 55 hour week! The clients I seemed to attract were "cheap" clients. Those who loved the fact that they were paying £x for a luxury pedicure, and moaned like no tomorrow when I increased my prices by £1 after 2 years!!!!! It is so much harder to increase prices than start with them at a fair level.
Do not sell yourself short. I am only now, after 4 years at home, getting my prices to a level that is more realistic. I am still way too low on some things, but I certainly make sure I price any new treatments where they should be! Earn what you deserve:hug:

We have all made this mistake!

Its better to set your prices high and offer specials such as a free mini pedi with a mani, than to raise prices later!

I was the most expensive salon in my area and I was packed out! My salon was not exactly that amazing, but what I did have were excellent products and self beleif.

Us professional therapists who want to offer our clients the best have a harder job as we have to educate our clients who seem to think a nail extension is a nail extension or a leg wax is a leg wax. We have to tell them our quals, that we have insurance, we have to tell them why we chose the products we did and much more. We bend over backwards and spend ages on the phone to try and get our clients to see we may cost more but not because we are ripping them off!

We may charge more but our profit margins are often the same as the cheaper salons using cheaper products.

You can offer value for money in other ways by adding in other treatments and freebies. and you get a more loyal client base too.

Kate

 

[shedunlop]

At the end of the day you have to set realistic prices that you are happy with. Do not undercut too much, as has already been said, you will seem cheap and inexperienced but once you have set your prices do not feel that you have to defend them. I have worked mobile for 10 years and the last 5 have been a combination of mobile and salon at home. I charge the same for both, so did not reduce my prices when staying at home. Same clients and they did not mind at all, in fact some of them prefer being able to get out of the house themselves.

Everything is a matter of time and building up regular, loyal clients. Most of my clients go a long way back with me, I have times when people are waiting for me to have a slot for them. Being fair with people is the way to go, not to be a pushover and not to overcharge and cost yourself out. Only you will know your own area and what salons are charging and what you can charge for treatments.

Sheila x

 

[Lady_Nightshade]

Speaking from a personal point of view, I would personally rather pay that little bit extra at first and get good quality work than have to keep going back and back and back and end up paying more in the long run and having nails I wasnt happy with.

Most people dont mind paying a bit extra if the get good quality work and good service.

:hug:

 

[Violet Star]

Remember one thing once you undercut yourself and want to put your prices up some people wont be happy with it so its harder to go back up.

In my situation with my tanning i used to charge 20.00 for a full body tan but i wasnt bringing in too much business so i decided to lower my prices to 15.00 for a full body tan and now i am very busy and earning much much more than i was when charging more. This is because of the area i live in, and because i wasnt earning enough.

So for me the price drop has been a complete gain for around 3 months now and i dont regret doing it at all. Its a chance you take, first start high and if you find yourself in the same situation as i was then drop a little and i mean very little.

hths x

 

[tigi]

you could use your competitors prices as a guie only , and decide where you want to price yourself.

if you are happy being somewhere in the middle, can make a decent living out of that and then you could consider setting your prices for a fixed time only. we did that when we started. we made to clear to our clients where a special introductional offer.

We have two offers every month and we change the treatments. i live in a rural area where minimum wage is the norm and the standard of living is fairly low. these are all things you need to take into account too!

tigi

 

[*sarah*]

I had a flyer from a lady who lives in the next block she was doing tans for £10 and nails for £10! she's a very nice lady but I thought wtf! one what products is she using and also thought she was undermining the beauty industry doing it for these prices! I would'nt under cut, I'd charge the same or higher xx

 

[sknight]

My opinion is that you are not undercutting your competitors, you are undercutting yourself! Charge for your time and skill and dont get into a price battle with the other salons.

 

[Miss Sylk]

Quality advice people!! Little Flashing bulb in my head just brought up some things i hadn't thought about.

Im not hugely cheap like half price, im a couple of pounds off waxing, £5-10 off make up, i will re-arrange that actually!!! because make up is a strong point of mine, what was i thinking there!

I am very new to hair styling (although i have had great remarks on it) but feel a lower price than the immediate area salons will reflect my experience, as a customer i feel the price "is" and indication and with my market research questionaiire so do 90% of the people who filled one out, amazing eh?

I think though, because i cannot put 12hr days 7 days a week in, as i have other commitments at moment and a young child who isnt in nursary full time till feb, i will look at upping my prices where i may have held back (before the opening), time is very ,much money too me at moment.

It seems to be true that upping prices at a later date is hard, that put together with my affluent area i live in, and the option of monthly offers (should i need them) and the fact i wont be annoying my clients by messing with my price list every month, has helped me decide to rethink my prices.

I see my competetors price lists and they vary greatly in some treatments like £15 on nails, £10 on pedicures and only £1 on others, so why are they so randomly different? Like people may (now) think "why is her make up price so much higher than her hair when the salon down the road has a higher hair price and a lower make up price" ? see what im getting at?
Do you think its because:

* Some charge higher (than the area average) for things they dont like doing? (heard that before)
* charge less for what they like doing?
* charge more for what they are very good at etc etc
* charge less because they have cheap trade supplies/products?


Appreciate all the help guys. xx

 

[Kim Lawless]

It never occurs to me to check out other salons prices, because I really don't care. I know that I give a brilliant service which is hard to beat. The room that I work from is very basic and above a hair salon, so nothing grand.

Have self worth and forget the rest. Be brilliant at what you do and stick to the prices that you're happy with. Don't justify your prices to clients either. If they want cheap, then let them get cheap. :hug:

 

[Bombalurina]

If they want cheap, then let them get cheap. :hug:

I couldn't agree more!!

When I first decided to go mobile I showed my mum my pricelist, and she thought my prices were too high...well, she's been the only one!! Never have I had a comment from a client that my prices are too high...and to be honest, all of the clients I have now are my ideal clients.