[00:00] Foreign.
[00:06] Hey, friends. Welcome to Beyond Beauty School. This is episode two. We're talking about tariffs and economic shifts today. Sounds a little scary, sounds a little intimidating, but I think I'm going to explain it the best way I can, most efficient way possible.
[00:21] And hopefully by the end of it, you feel a little more secure in yourself, in your business, and. And in the beauty industry in general. Because we all know that economic shifts are happening all the time.
[00:32] Economic instability is kind of part of the gig with the beauty industry and being an entrepreneur or even being an employee. And so we're going to talk about how the tariffs are going to affect the beauty industry, how they're going to affect you as an esthetician, and how to build a business or a career that can withstand these economic shifts.
[00:51] I want to start. Start kind of at the top, at the beginning. We're going to talk first about what a tariff is, because I think there's a little bit of confusion, and I'm going to try to break it down in a way that explains it for the beauty industry in the aesthetics world.
[01:05] Okay, so tariffs are taxes placed on goods that are imported from other countries. So if you're thinking, well, you know, I'm in the United States, like, what does that really have to do with me?
[01:16] Well, it actually has a lot to do with you because a huge percentage of the skincare products and the retail products that we have as estheticians, the professionals, lines, the ingredients, and even the devices and modalities like hydrogen abrasion machines, those are manufactured overseas.
[01:31] So when new tariffs get put in place or they get increased, it becomes more expensive for companies to bring those products into the US and spoiler alert, obviously, companies don't just absorb those costs, Right?
[01:45] They usually pass them down to us,
[01:48] which then means that we pass them down to our clients, which is where it gets a little hairy. Right? So what does this mean for our industry? It means retail product prices could go up.
[01:59] It means your back bar could get more expensive. And it means the clients who already are feeling the pinch in other areas of their lives are probably going to become a little bit more cautious about spending money.
[02:12] And we all know historically, we are the first ones to go, right? Nails, hair waxing, facials, all of those that are considered luxuries.
[02:22] We are usually the first ones, the first places that people cut back. Right? So a little bit of a descriptive way to explain how the tariffs are working in our industry.
[02:32] I was listening to an Instagram live with lash extension manufacturer, and she manufactures her lashes in China and she has a full shipping container that is full of product. She has two different brands, lots of different lines, and she has a whole shipping container full of product.
[02:49] And that shipping container was $500,000.
[02:54] So just that shipping container alone, she had it budgeted out for $500,000.
[02:59] She started the manufacturing of these products a long time ago, and now they're just starting to come to the US because of the increased tariffs, she now has to pay 145% on top of what she's already paying.
[03:15] So she's paying the $500,000 for the shipping container,
[03:18] and then on top of that, she's paying $745,000 on top of the 500,000 to be able to get the product that she began manufacturing half of a year ago. Right.
[03:34] So the trickle down of that is as a manufacturer, then those manufacturers sell that product to distributors.
[03:43] We as estheticians purchase from the the distributor. Sometimes you purchase directly from the manufacturer, but mostly the distributor or the manufacturers from other companies will sell to distributors wholesale, and then the distributors will sell individually to estheticians.
[04:00] And then the estheticians will take that retail and either use it in their treatment rooms on their clients, or they will sell that retail to their clients.
[04:08] At I'm in Los Angeles, we're by the Long beach port, and it is almost empty because of the tariffs. The distributors are not able to buy a lot of product or they can't afford to buy product.
[04:22] Right. And so there are less ships coming in, which means that the shelves are going to be empty. I'm not saying to go out and panic buy retail right now, but I am saying if you can stock up, you should stock up.
[04:32] Because after a few months, if the tariffs continue, we could be seeing distributors not having enough product in back order. So we talked about retail product prices going up. Your back bar cost will probably get more expensive because those are larger sizes.
[04:48] Right. But those it's still product that's coming in from other places. And then we talked about the clients and the impact that it's going to have on their pocketbook when they're already trying to pull back a little bit on expenses.
[05:00] Right. So we're at a place where people are going to start making tough financial decisions when it comes to what they're investing their money in. And while it's not time for us to panic, it is time for us to be smart, strategically strategic, and we need to be future focused.
[05:18] This could be resolved in a couple of days. It could be resolved in a couple of weeks. It could be resolved in a couple of months. We're not exactly sure.
[05:25] But ultimately, something like this is always happening in the economy. And as business owners or even as employees, I say this all the time. Even if you're an employee, you are your business, right?
[05:35] So the stability of the industry is always kind of coming up against something, and you need to be able to form a very solid foundation. So when these winds start coming and the winds start shifting, it's not going to blow your house down, right?
[05:49] Your house is the one that's made of brick, not straw or sticks. Like we really are to focus on getting our house in order. So that way, when these unpredictable things happen, we are not swayed and we are not operating from a place of fear.
[06:03] So along with building a strong business, my advice is also to build a flexible business. Because I know that change is really hard, and we like to stick to what we know, and we like to say, oh, well, this is always how I've done it, and this is how I'm going to continue to do it.
[06:18] But right now, in uncertain times, your clients need empathy. They need understanding, especially when it comes to their budget. And you need to be a little bit more flexible when you are thinking about how you are going to serve them.
[06:31] The first thing that I'm going to say when it comes to creating a stable business is you need to focus on relationships, not just your services. Now is not the time to diversify and start adding a million different services just to bring clients in.
[06:46] Right? It is to focus on the connections and the clients that you have now. Nurture those relationships, meet them with empathy, meet them with understanding. It is a really difficult decision for them.
[06:58] Nobody wants to give up their facials. Nobody wants to give up their lashes. Nobody wants to give up their hair. It is a really difficult decision. And so just meeting them where they are, because not only is it uncertain, unpredictable, and a little scary for us, it absolutely is for our friends.
[07:13] Right? We want to understand that the clients who are coming in are connected to us, right? And they trust us. And they feel seen and they feel valued. And when they feel seen and valued, they are much less likely to cancel when times get tight, right?
[07:31] Because you're a friend, you're close, and they value their time with you. They value your experience. It's not just about the facial. It's about the whole experience. It's about the care and the attention that they feel when they're in your treatment room.
[07:43] We really want to make sure that the experience goes beyond just the treatment you want to become part of what I call the self care non negotiables. Right. Like, even when budgets shift, you want to be one of those things that is a mainstay.
[07:57] And so that is really focusing on relationships outside of the treatment room, not just in. Right. So you're connecting with them before, you're connecting with them after. You're making sure that you kind of stay in their mind.
[08:07] You're showing up on your stories, you're connecting with them online and making sure that they know that you're there for them and you're supportive. And if they need anything, you can be there to help.
[08:17] The second thing that we want to discuss is retail. Now I talked about this a little bit on my tech talk the other day and it kind of blew up and people were liking it and commenting on it and they thought it was really relevant.
[08:30] I know this is going to really upset some estheticians, but I think it's important for you to branch out from your treatment room and start looking at skincare lines that are offered at big box stores and Sephora and Ulta.
[08:43] Now hear me out. The reality is the spending habits of people when they are in an economic crisis or an economically instable situation is they are going to go to what is comfortable and they're going to go to what they think is less expensive.
[08:59] If you have something that is the exact same price on your shelf as they have at Sephora, for whatever reason, people are still going to be drawn to trust Sephora a lot of times.
[09:10] Or they have a Sephora card and they want to put it on their Sephora credit card. I have so many clients who come and they know they have a strict routine and they're still like, oh, I tried this, you know, Korean skincare product that I saw on TikTok.
[09:20] When they are starting to budget and they are starting to cut back, they are going to start to want to use products that they can find at Target, Walmart, cvs.
[09:28] And while they are doing that, they are thinking that they are actually saving money. We know that they are not going to get the same results, results or they could actually do harm to their skin by using products from those stores or using them incorrectly or not under our supervision.
[09:43] So the best thing that we can do is offer retail that is affordable or we can offer drop shipping. I always tell my students and my mentees when they're just starting out, the line that I always tell them to carry is skinscript because not only are they affordable, it's professional skincare.
[09:59] And they also have drop shipping. What drop shipping is, is the client purchases the products from you, you go onto the website you purchase and have them directly shipped to their front door, which clients love.
[10:11] So they won't get it that same day. But you will know that they are using professional products. I will say that it would be advisable for you to know at least 10 products in Sephora, Ulta or big box stores that are comparable to things that you have on your shelf.
[10:25] Even the most financially stable person is going to try to cut costs and they will usually start to try to cut costs with retail. So having alternative options that they can use, that they can get in stores is going to only benefit you.
[10:40] Especially if we start having back stock problems or if we start having problems with our distributors and our manufacturers and not being able to get our hands on retail products, we're going to have to pivot, right?
[10:52] If we are starting to have empty shelves from our distributors with our professional skincare product, we are going to have to pivot and we are going to have to find other alternatives for our clients.
[11:02] And this is what I was saying earlier about being flexible.
[11:05] Everything in us as estheticians says we can only offer them professional skin care. Professional skincare is the only thing that works. I'm an esthetician that doesn't believe that that is entirely true.
[11:17] I think that it is more about understanding the ingredients and the quality of the brand, not necessarily where the the brand is sold. But if we are not going to be able to buy retail or it's not going to be in stock from our distributors, then we are going to have to pivot and find other alt alternatives.
[11:31] My third thing is offering scalable options. Now this just means giving clients choices that meet them where they are. So maybe they can't swing a 200 facial every month, but they'd happily come in for a 90 maintenance treatment to stay consistent.
[11:47] By offering different levels of service, you can help clients stay on track with their services without feeling like they have to drop out altogether. This is just being flexible. This is just pivoting.
[11:57] I know this is going to go against a lot of what you've been taught as an esthetician,
[12:01] but this goes back to showing them empathy, showing them understanding, and also trying to maintain keeping people on your book because we don't want everybody to drop out all together because we're being too rigid with our retail or with our services.
[12:16] Now is this the time to add 40 services that you're just kind of good at, just to make an Extra buck? No, absolutely not. This is the time to stay within your niche, but find ways inside of your niche to offer your clients services that will work for them.
[12:33] This next one is prioritizing client retention over constantly chasing new clients.
[12:39] Some of your clients are going to drop off. I'm not saying don't continue to be consistent online and show up and consistent with your marketing and consistent with getting the word out about your business.
[12:49] That's not what I'm saying. But I am saying that attracting brand new clients in tighter economies gets harder and it ends up being more expensive. So it's easier and smarter to keep the clients you already have happy, engaged and invested in their results.
[13:03] Which is why we're being flexible, right? It does not mean we're letting them walk all over us. It does not mean that we are making exceptions or excuses where it is costing us money.
[13:12] It just means that we are investing in them more as clients and investing in their experience and making sure that their experience with us, not just in the treatment room, but like I said, inside and out.
[13:25] They want to feel very supported and we want them to feel supported so they continue to come back.
[13:30] So this means personalized follow ups. This means birthday text messages. It means sending a card in the mail, a thank you card or birthday card, remembering personal information about them when they come in, putting it in your notes when they say something during a facial.
[13:44] So that way you remember next time that they were going on a trip or they were doing something for their birthday. The simple touches that remind your clients how much they matter to you.
[13:53] Right? Which is an invaluable part of any client experience. But you have to go a little heavy handed now. When you're trying to keep people on your books and you're trying to make your service a priority in their budget,
[14:07] the next thing that we're going to talk about is being smart about your overhead.
[14:11] Now is a good time to review your expenses. Are you over ordering back bar products? Are you over ordering retail products? Do you have retail on your shelves that you're just not selling and you're wasting money on?
[14:22] Are, are there subscriptions that you aren't using? You need to keep your business lean without cutting quality. So you just need to be intentional about where your money is going.
[14:32] The reality is economic shifts are always going to come and go. But your ability to build strong client relationships, your ability to offer smart and flexible services,
[14:44] your ability to have options and be empathetic and kind and understanding with your clients, and your ability to be smart about your overhead and what your expenses are is what is going to protect you in all of this.
[14:57] You are your business's biggest asset. Your skills, your integrity, your experience. That's what people are investing in, no matter what's happening in the economy.
[15:07] If you have more questions, please reach out and let me know because I would love to answer them. I feel like this is a lot of information in a very short amount of time, but I'm hoping that it's helpful.
[15:16] I'm hoping that you found it beneficial, and I'm hoping that it opens up a conversation more about what we can do to serve our clients best and to create an experience for them that helps them feel supported during financial instability and economic instability.
[15:31] Thank you so much for listening today. I know conversations about money can feel a little heavy sometimes, but the truth is, awareness is power, and the more that we know, the more we can prepare, not panic.
[15:41] So if you found today's episode helpful, go ahead and hit that subscribe button so you don't miss next week's conversation. And if you're ready to start building a career that can thrive no matter what's happening in the world, this is the place for.
