How to Decide What Prices to Charge in the Beauty Industry

Setting prices is one of the hardest things to do in a business. You've got to figure out a fair price that covers the costs of all of your products and work and that makes you money. 

So, how do you decide what to charge your clients? Use this checklist to help you set your rates. 

Ask Yourself: What Have You Already Invested?

You likely underwent extensive training and certification processes to provide your services. You also underwent training for specialized services like lash lifts, lash extensions, or brow laminations. 

You invested in yourself to learn how to do everything and obtain the proper certification to offer the services. None of that was free, and you need to be able to make a return on your investment.

Add up every dollar amount you've put toward arriving at your current professional level. As you work on the other items in this checklist, consider a reasonable time frame for recouping your costs. Remember, the shorter the time frame you choose, the higher your rates will be to meet that benchmark.

Beyond your initial investments, it's crucial to understand the ongoing costs involved in delivering each service, including fixed costs like rent and utilities and variable costs like materials and labor. This ensures that your pricing covers all expenses and includes a reasonable profit margin. Calculate your break-even point to avoid undercharging and to ensure long-term profitability.

Factor in the Cost of Supplies

Conduct a thorough analysis of the costs of providing your services, including the materials, equipment, labor, overhead expenses, and any additional fees or taxes. This will help you determine the minimum price required to cover the costs and achieve a profit margin.

Supplies are costly, and everything adds up, such as lash shields or lash rods, lash adhesive, conditioning serums, brow tint, and more. You likely use multiple supplies per procedure, so it's a good idea to determine your expenses each time. 

For example, if you use one mascara wand from a pack of 25, how much did just the one wand cost you? For each procedure you do, take note of every supply item you use and break down the cost like this. At the end, you'll add these up.

Your totaled figure should equal what it costs you to perform that one type of procedure one time. If you perform multiple services, you will want to calculate this figure for every service you offer. 

Additionally, remember that market conditions, such as inflation or supply chain disruptions, can affect your supply costs. Regularly reviewing and adjusting your prices to reflect these changes is essential for maintaining profitability.

Decide What Your Time Is Worth

Now, you're ready to think about some time estimates. How long can you perform a brow lamination or a lash lift? Think of these estimates in terms of hours.

Establish an hourly rate for yourself and factor that into the rate you will charge. For example, an average aesthetician may charge around $20 per hour. Still, a highly skilled or famous individual may charge closer to $30 per hour.

Your hourly time might start lower as you start, but you can always increase that figure as you gain more skills and expertise. 

Think About Your Target Clientele

Consider the demographics and purchasing power of your target clientele. Is your studio in an affluent part of town, or will you cater to college students? Do you expect your clients to see you only before special occasions like weddings, or do you wish to have mostly repeat clients?

Factors like your clients' locations, ages, income levels, and lifestyle preferences must be considered. This will help you set rates that are affordable and accessible while still maximizing your profits.

In addition to considering these factors, consider your services' perceived value. Value-based pricing allows you to set higher prices based on your unique benefits and expertise. Provide a specialized service or have advanced skills. You can justify premium pricing by highlighting the exceptional results and experience clients can expect.

Research What Others Are Charging 

Research what others around you might be charging for their services. To be competitive in the market, you must decide on a reasonable price similar to that of your competitors, plus match industry standards and pricing trends.

You want to get paid, and your services are valuable. However, you also want to ensure you appropriately charge and drive customers to your competition. On the other hand, if you offer a unique or specialized service that makes you stand out from your competitors, you may price your services at a premium to reflect the exclusivity or high demand for your expertise.

Communicate your Unique Value Proposition (UVP) to clients to further support your pricing. This includes your credentials, experience, and what makes your services distinct. A well-defined UVP can reduce price objections and make clients more willing to pay a premium for your expertise.

Write Down Your Business Goals

It's also worth considering your business goals when setting your rates. You may plan to be a one-person operation indefinitely. You may want to hire a second (or even a third or a fourth) beauty technician. You can imagine opening your state-of-the-art studio one day.

Your rates are one of the primary tools you have at your disposal when it comes to helping you achieve your dream, whatever that may be. The trick is to strike a balance between competitiveness and profitability to ensure the sustainable growth of your business.

Finalize the Price

You've considered your investment, supply costs, time, target clientele, competition, and business goals. Now, it's time to combine all your notes and set a price.

Consider adding an upcharge of 10% or more for each service. Put this money away to help you cover unexpected expenses or a sudden increase in the cost of your brow and lash supplies. Additionally, you will want to set aside some of your income for tax purposes, whether you plan to pay in quarterly installments or once a year. This will help you avoid any painful shocks come tax season.

As you finalize your price, consider implementing dynamic pricing strategies, where prices adjust based on demand or seasonality, and psychological pricing strategies, where prices are set to influence customer perceptions (e.g., $99 instead of $100). These advanced pricing techniques can help optimize your revenue.

Above all else, remain flexible and adaptable in your pricing approach. You should periodically review and adjust your prices to stay competitive and meet evolving client needs. You won't have control over changing market conditions, seasonal fluctuations, client feedback, or general eyebrow or eyelash trends. But you can focus instead on setting a fair and right price for you. If you can do that, you will go right.

Finally, consider offering tiered pricing structures, where you provide different service levels at varied price points, or bundle pricing, where you combine multiple services into packages. These strategies can appeal to various customer segments and enhance your services' perceived value, improving customer retention and satisfaction.

← Previous Post Next Post →