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The
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Will you be offended because we write about the Vietnamese? When writing about the discount nail shop segment of the nail industry, we
will often be speaking of the Vietnamese. This is not done from a feeling
of prejudice, nor as a way of stereotyping an ethnic group of people. If
anyone chooses to feel offended because we often mention the Vietnamese when
discussing the discount nail business, we do apologize to you ... however ...
one should be aware that the Vietnamese dominate the discount nail
business. And for us to ignore that the Vietnamese dominate the discount
segment of the nail industry, would merely illustrate the foolishness of the
extremes of political correctness.
First, lets check on the Vietnamese booth rental segment.
Booth rental has been something that we have been keeping an eye on here in
Charlotte. While booth rental has long been dominated by American nail
techs, we believe it likely that as the discount nail business becomes more
crowded (and less profitable), some (small) percentage of Vietnamese nail techs will be
moving into the nail booth rental segment of the business. We also have hopes
that those making the change to booth rental will, on average, consist of
individuals holding a greater percentage of nail tech licenses and having a
higher concern for the safety and well-being of their customers .....than do so
many that currently work in the discount nail business.
A concern to nail techs that are already established in the booth rental
business should be will this bring about even greater price pressures.
Many booth renters already feel the price pressures of the discount shops.
Would licensed, experienced Vietnamese nail techs moving into booth rental also
continue their business philosophy of unusually low prices that they learned in
the cut-throat competition of discount nail shops?
Ollie Ninh has been one of three Vietnamese nail techs that (we know of) have been operating as a nail booth rental in the Charlotte area. All three have been renting within American operated hair salons.
What happened to Tech A's booth rental? Of those
three Viet techs booth renting in Charlotte, one recently left her original
lease. Let's call her Tech A. Tech A has had a nail booth rental
inside of an established and popular Amer hair salon for years. Lately she
has been paying a rather large (in my opinion) amount for monthly rent.
Approx $800. Last fall her lease came up for renewal. Another Viet, in the
business of operating, buying, and selling discount shops for years, offered the
Amer salon $2000 for the lease. The result: the Amer salon is now
leasing to the new Viet, .. the new Viet is painfully becoming aware that the
volume of nail business within the salon is far below what he is accustomed to
for a $2000 monthly payment, ... and Tech A has moved to another salon and is
experiencing a drop in her income while she rebuilds her client list.
But the Viet trend continues to be discount nail shops. And we will
examine that at the beginning of the trend - 8 years ago in Charlotte, when
there were no Viet discount nail shops in our area. So... in the beginning
.... a Viet or two from the west coast are visiting here and they notice hey
there are no discount shops here. Well they are in the discount shop biz
in Calif and in Calif it is so overcrowded in the biz that you can't make an
'killer living' in it anymore SO they take the plunge and move here
and open up a couple of discount nail shops.
Now the word goes out to two groups. First, other Viets in the biz on the
west coast learn that places like North Carolina are virgin territory to the
discount biz. So they too, migrate here and open shops. The second
group are the Viets already living here. The uneducated, with poor
English - they are working in the local turkey industry, butchering and
packaging turkeys and chickens for sale in the grocery stores. This is
dirty work for minimum wage. Or perhaps working in the assembling of
small electronic components, third shift, better pay, perhaps $6.50
hourly.
Now the word gets out. Here is a biz, discount nails, the Americans don't
control it, in fact the Americans don't want it, anyone can do it, don't need to go to school, don't need to pass a
test, don't need to pay taxes. Some more discount shops open and the word
gets around that the shop owners are buying new Toyota Four Runners for
cash. There is a money tree in town and its name is discount nails.
Open, operate, then sell. The pattern over the past 8 years has
been: spend 10K to open a discount shop. Work in the shop yourself,
plus nice if you can also work with your spouse or your sister or your
cousin. Hire any additional needed workers on a 60/40 pay split. Pay
your workers cash. Don't pay their taxes. Don't pay your
taxes. Declare a loss for the first year of the biz. Declare a
breakeven for the second year of the biz. Sell the shop to another Viet
for 20K who is hungry for the opportunity to also be able to pay cash for a new
Toyota Road Runner.
Then begin the cycle all over again, only a better location and nicer
decor. Spend 18K to open a discount shop, work the shop for 2 years and
this time sell it for 40K. And then the 3rd cycle, open a lavish discount
shop for 28K, operate the shop while you look for a buyer (for now with greater
number of discount shops, there is less money to be made in operating the shop
and more to be made selling the shop) willing to pay 60K for the shop.
The current picture is that the big profits in the
discount biz are becoming harder and harder to achieve. Too much
competition as there are HUNDREDS of discount shops in the city and discount
shops in every small town for a hundred miles around. Plus the state now
demands a tech license so you struggle to find licensed workers. Prices
for nail services have dropped and dropped. Yet the number of Viets
wanting to become a nail shop owner keeps increasing.
It resembles the appearance of a coming stock market crash. Too
many people willing to pay for way over priced discount nail shops, and few
street corners left without a discount nail shop already on it, and only x
number of women who are going to have their nails done, and finally, the service
prices have to keep dropping and those nail shops will not continue to bring in
big operating profits to their owners.
Will the discount nail biz in Charlotte crash? I don't think
so. I mean I feel that a point has got to come when the discount biz has
to level out and maybe for a while even experience some negative growth.
Although most Viets in the business are blind to the future, I have noticed that
some are attempting to alter their involvement in the nail industry.
Some Viets are trying to avoid the return to working for a paycheck.
Some who have been buying and selling discount shops for years have a
mattress stuffed with cash (so to speak). Some are buying up shops and
realizing that operating profits are falling, they are owning and operating 2 or
3 shops in order to maintain the former level of income.
Others are using their cash to buy into other related businesses. Buying
an Amer hair salon, for example, and remodeling it into a half nails / half hair
shop. Other Viets with the ability, are obtaining full cosmetology
training and then opening 'spa' salons offering a full range of services.
However, the vast majority will continue to pursue the current course in the
discount nail biz. More people joining the current ranks of the Poorworks,
more discount shops, more lowering of prices.
To not compete is to compete. Remember, if you are working as an Amer style nail tech, you have little chance of competing with the discount biz on prices. Lower and lower prices can only be possible with volume. If you haven't already, gain your skills and experience; for you don't stand a chance if your nail work doesn't even measure up to the local discount shop. Then base your business on clients, not customers. If the role of discount shop nail workers is behaving like a cashier at MacDonald's,,,,, then your role as a professional nail technician is to behaving like a chef at a five star restaurant.
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