Things That Must Change to Stop Diversion

Diverted professional product sales totaled $1,000,000,000 last year.
That’s ONE BILLION DOLLARS according to The Beauty Industry Fund Report. That’s a whole lot of product!

Here’s our view of what can be done to stop it.

Manufactures must do a better job of finding the leak.
Products have codes on them that show where and when they were made. How hard would it be for a manufacturer to track their product from their own codes while using the invoice from the store it’s being sold in?
They say they’re trying and diversion is down almost nineteen percent comparing the third quarter 2009 to 2008. That’s nice but it’s only a twenty four million dollar decrease. Is it manufactures being effective or consumers buying lower cost products at retail outlets because of the economy? It’s our opinion that it’s mostly due to the economy.

Product Swaps
When a product is swapped out what happens to the products taken? Are they showing up in the retail stores and EBay? Do you think swap outs may be part of the problem?

Sales Quota’s on Distributors
Manufactures need to sell their products and increase their stock price for their share holders, which in our opinion is their primary concern. They put intense pressure on distributors to sell more product. When distributors don’t meet their quota’s, they lose the product. This is happening all too frequently now. So some distributors, to stay in business, divert product. However, the manufacture should be able to track these products and put a stop to it.

Salons must be more responsible
If salons didn’t do business with distributors that sell diverted products, think there would be pressure put on the manufactures by the distributors to stop the problem. From their end, if you don’t care, why should they? Frankly, if your salon is carrying products that are found “over the counter”, you’re part of the problem.

What salon owners have to say

“Salons have to refuse to carry lines that are diverted.”

“Why is it that some brands are found everyone and other brands aren’t diverted?
Something’s fishy. The manufactures of the diverted products need to be more responsible for stopping it!”

“The public should not be able to buy products at beauty wholesale stores.
Everyone must show a license to purchase”

“Shouldn’t all these product companies and distributors who talk about diversion and what they’re doing about it be paying a little more attention to the quantities they are selling and who they are selling to?

“Some diversion is caused by distributors poor business practices.
As a salon owner, if I decide tomorrow to change my makeup line, what do I do with the $5000 worth of retail? The distributor won’t take it back, if I discount it and sell it to clients, how am I supposed to launch a new line? I would definitely consider selling it online”.

“Salon owners and stylists have to start taking responsibility for their lack of education.
Selling products the stylists prefers rather than selling what client’s need, is a HUGE problem. Selling a product because of the name on the bottle rather than fully understanding ingredients is also a HUGE problem. LISTEN to what your clients like and dislike”.

“Think about this: Who is really selling these products? Where does the problem begin?
Do you really think your local pharmacy or grocery store buy boxes of products that fall off the back of some truck or just from distributors that go out of business? If that’s the case how can they be carrying the same products two years later?”

“Can you really blame these companies (the manufactures and distributors) for selling out the professionals? We don’t do our job. We don’t sell. They have to unload their product somewhere”.

“Boycott the distributors that sell diverted products”.

“Educate clients on what product they are using and why.
Every client should be made aware of what products are best for their hair. If the product is pH balanced or not. After you sell the client a product next time they come in ask them how its working and continue to educate them.”