A Tale of Two Salons: Why Your Pricing Strategy Matters

Let’s imagine two thriving salons. Both are booked solid. Both are full of talented stylists. Both offer the same color services.

But only one of them is still profitable after 10 years.
Why? Let’s break it down.

Meet the Salons

Salon A: The Traditional Model

• Charges a flat rate for color (bundled parts + labor)
• Increases total service prices by $10 per year
• Pays commission on the full service price
  
  

Salon B: The Smarter Model

• Separates parts (product) from labor (time/expertise)
• Adds a at least 5% annual increase to labor only
• Charges clients the product cost plus 100% markup
• Pays commission on labor only
  

Both salons raise prices each year — but only one accounts for rising costs. Let's fast-forward 10 years and break it down.

Over 10 Years, What Happens?

Let’s assume:

• Color started at $15 per service
• It increases 5% every year
• That means after 10 years, color now costs $24.43
• That’s a 63% increase in product cost

Salon B passes that increase on to the client each year, with a 100% markup.
Salon A? They absorbed it, without realizing how much it was eating into their profits.

TL;DR: Salon B is over $9,000 more profitable per stylist, per year, just from separating and tracking parts and labor.

The Commission Trap No One Talks About

Here’s the kicker, the commission model most salons use makes it worse.

Let’s say:

• You raise your service price by $10
• $5 of that is eaten by rising color costs
• You pay 45% commission on the full $10 = $4.50
• That leaves just $0.50 of real gain per service

To stay ahead of just 5% inflation, you'd need to raise your prices by $9–10 per service, every single year.

The Big Takeaway

This isn’t just about pricing. It’s about protecting your business.

Salon A stayed “busy” — but slowly bleeds profit
Salon B stayed profitable — by separating parts and labor

When you break out your color product costs:

• You track inflation in real time
• You stop overpaying commission
• You future-proof your pricing strategy

Ready to Be the Smart Salon?

If you’re still bundling parts and labor, you’re leaving thousands on the table,  every single year.
Start now. Pass the product cost to your client. Protect your margins. Get paid what you're worth.

Start now. Don’t wait. You’ll never get that money back.

Book your 15-Minute Demo Call