Nail Biz Visit to a Discount Shop

The Business of Nails
NAIL-BIZ by the Dragon

Third-generation. You may live and work in an area of the country that has few discount nail shops, but most of us are very familiar with them ..... at least on the outside. Many American nail techs have never set foot in a discount nail shop. Perhaps this visit will surprised and educate you about the competition. The particular nail shop that we will visit is what I think of as a third-generation discount shop. It may be superior to the discount nail shops that operate in your area. This shop is owned and operated by discounters that have been in the business for years. They started with the basic, no frill shops and have made money over the years. And each new shop, they have had more cash available to invest .... thus you are going to find that a large amount was invested to make this discount shop top-notch.

This third-generation discount shops is now on the way to becoming the norm in our area ..... they are attractive, comfortable, clean, well staffed, and very well equipped.

I read some posts where American nail techs operate their own nails only salon. I feel that you must not be in discounters territory. Here in Charlotte the discounters arrived about ten years ago and now dominate the business. I know of no American nail salons in Charlotte or outlying areas ..... an area of nearly two million people. All American nail techs in our area work as employees or as booth renters in full service salons or day spas. Period. No one has survived in head to head competition with discounters.

Illegal. Another thing is that in some areas of the country, discounters are still often operating without tech licenses and often have dust filled, unclean shops. Prepare yourself. Once discounters saturate a market with discount shops on most every corner .... then their next level of competition is not only to have a good looking, well equipped shop ..... they also accept the reality that the workers must be licensed, the shop must pass inspections, and the public must feel that the shop is safe and clean and sanitary.

See after wiping out the traditional tech competition and then opening too many discount shops .... they then have to compete against themselves. That is when their service prices REALLY go low. But even they can't work for a loss .....so the next level of competition becomes shop equipment and appearance, and cleanliness and sanitation and comfort.

Don't fool yourself into thinking that the crummy looking, dirt filled discount shop that may be in your town today .... is how the world of discount nails is going to remain. Discounters are first and foremost, business people, depending on nails as their means of making a living. They are not sitting still. They are making a great deal of progress and soon the word 'discount' will ONLY be a descriptive word for their prices ..... not for their services.

I don't want disbelievers after reading this report. I am qualified to examine the past, present, and future of discount nails.. My wife is Vietnamese, she began her nail career unlicensed. She worked in the discount shops, she owned discount shops. We party and travel and visit with discounters, we go to their weddings and we go to their funerals. If you can't accept the reality of what discount nails is becoming .... then can you say the word ... ouch ? ( in Vietnamese they don't say ouch ... they say "ou ma". ( free tidbit ) )

Let's visit. We will call the shop R-NAILS and the owner Mrs. R. The shop is in a new building, just a year old..... red brick with huge front windows. Rent is in neighborhood of $ 2000. Nearby is a McDonalds, a Burger King, a Wendy's, a Kmart, a furniture store , ect ect, a Eckerd's, two grocery stores, a movie center, gas stations, banks, and 4 other discount nail shops and two hair salons with American nail tech booth renters. It is a busy shopping area.

Drive up. See Mrs. R's Lexus. Don't see Mr. R's Lexus, so he must be home. I see my wife's Corolla, so she must be in the shop. Park and stand in front. Nice storefront. Large windows. Bright neon signs "NAILS' and "OPEN" in the window. White lettering on the door says "Professional Nail Services". Laugh, not long ago that was so funny to see on all the discount shop doors .... just words.... but you are about to learn that it is becoming less a lie as time goes by.

What else do we see on the door? Their hours.... Monday thur Saturday 9am to 7pm and Sundays noon till 6pm. Do you want to work 11 to 4 Tuesday thur Thursday and 12 to 5 on Friday and them wonder why in the world you can't keep clients? Let's step inside.

From the entry I can see their sign-in clipboard. Looks like over 30 customers have signed in today. Think about that, 30 customers so far today .... that is what my wife does in a week. And her price board ( in NC you must post prices) is on the wall. R-Nails is a typical Quad 5 shop .... Manicures for $10, Fills for $15, Pedicures for $20, and Fulls for $25. And in our area that is the price ... no add ons or alacarte prices added. Mrs. R is very radical .... she will take your cash, your check, or your credit card.

Let's stand here and take in the atmosphere. First off, there is no strong odor. We are in a typical store space, narrow in width and long in depth. The temperature is comfortable, the lighting is soft. Mr. R installed a very good sound system with omni directional speakers mounted high on the walls of the shop and the background music is pleasant, slightly bouncy, toe tapping. Off in the distance in the rear of the shop high in the wall is a flush mounted 27 inch cable television,,, right above the pair of pedicure thrones. The walls up to waist level are paneled and have chair rails, then mirrors up to head level, then $ 4,000 worth of neon tube lighting parallel to the mirrors. Above the neon are 12 large nail posters ($700 worth if you went to buy them, $350 worth if you can bargain in Vietnamese). The kind from Nails or NailPro, only these are mounted on wood backing and lacquered. Carpet is short pile, dark blue, and wet work areas are covered with 10 inch by 10 inch Mexican style tiles. It is nice and very inviting.

Ok, let's walk along. To the left. Polish on display. OPI, China Glaze, American Manicure. In wall racks, in rotating racks, in glass counter displays. Must be between 400 and 500 bottles. First think ..... how am I to compete with that ... .I have 30 or 40 bottles ... compared to their 400 to 500 bottles. When a customer is going to think in their mind 'who is in the nail business', will they think about those 400 to 500 bottles? Secondly, let's think about the companies that make all the nail equipment and nail supplies. What would OPI think about the 30,000, 40,000 50,000 discount shops stocking up on hundreds of bottles of their polish. How about the makers of pedicure thrones, whose customers are probably 80% discount shops. Do you think that they have a negative or a positive view of the discount nail industry?
Then we have the Vietnamese traditional 'lucky bamboo' plant. Never seen one? I have a photograph of Huong's, I'll post it someday. Then the traditional prayer Buddha .... only Mrs. R is sensitive to negative customer thoughts and hers is small and tucked away in a niche. Then the counter with glass front. Has a cash register and the price board on the wall behind and telephone mounted on wall and sign in clipboard on the counter.
The equipment for transmitting the credit cards for approval is behind the counter, after all Mrs. R is Vietnamese and feels that paying a percentage of her money for using credit is the same as being stolen from .... so she certainly does not encourage any customers to use their credit cards.
And of course, even though there is a salon telephone, each nail tech in the place has their own cell phone. Do you have yours?

To the right. The front sitting/waiting area. Simple, plain chairs, in good condition, a simple table, magazines and a reading lamp. Plain, clean, comfortable.

Back to the left. Next comes Mrs. R's nail table. As I walk over, she comes gives me a big smile and a big hug. "Ken", "it has been years since I have seen you do nails, why don't you do a customer for me today and I'll see if you still have the touch". I laugh and decline and for a few minutes I watch the nail tech at the next nail table, putting a full set of acrylics on a young girl .... about 14 years old, her mother has brought her in today for her first set of acrylics. Think about that a moment. Her mother probably started getting nails done a few years back at the discounters, and now she has brought her daughter in for her first acrylics. Isn't this somewhat similar to how the Japanese car manufactures got a hold of so many billions of dollars of the car business in the U.S.? Then past the table where Huong is working is a third nail table and after that ....
the hand wash area.
The hand wash area has a bakers rack against the wall and is filled with rolled hand towels. Yeah, bright white, fluffy hand towels. Mrs. R. has a washer and dryer in the back room. Next to the rack is a hand sink. Nice one, the expensive looking pedestal style sink .... with pump soap and container of fresh scrub brushes and a disinfectant filled container to place the used brushes into.

By the way, the spaces that are separated into general areas, like nail table area meeting the hand wash area,,,, that type of thing .... well each different type of work area is separated by a waist high wall. Very nice, it defines and organizes the different areas of the shop.
Ok, next on the left, comes the pedicure area. Two pedicure thrones. The pedicure thrones are up on a raised floor area. And this is considered a 'wet area', and is tiled. With a tannish color 10 inch by 10 Mexican style tile. It's nice.
Mrs. Q is there working on a customer's feet. "Hi Ken", "come here and help me with this pedicure". Yeah, like she needs my help ... not.
While I speak with her, I bend down and inspect the pedi-throne not currently in use ---- they have been using it for 8 months and it is spotless ..... trying not to be noticed, I stick my finger into the outlets and rub around.... clean as a whistle.

Behind the chairs is a wall and in the wall, up high, the 27 inch cable tv has been inserted into a recessed opening..
Behind the wall is the break room, which contains microwave, shelves, chairs, clothes washer and dryer.
Beyond that small room is the restroom, which is spotless.

So what is on the left side of the shop? Well after the front seated waiting area, is a nail table, then another nail table, then a table used for air brushing, then the nail drying area.
For the nail drying area, you have a long table with built in UV lights with chairs and I counted them .... 7 of the deluxe Lanel nail polish dryers ... what they worth ... like between $1200 and $1500. You should see from what I describe that the business is set up for volume.

Now Mrs. Q. has finished and has gone to get the vacuum cleaner and Mrs. C. has come out of the break room with towels and spray cleanser and starts on all the tables and chairs.

Oh, I forgot to mention before that 8 or 9 months ago Mrs. R's shop had only 1 valid nail tech license on the wall .... now all the techs have their license. Are you getting my theme here. That as the discounters in an area open too many shops ... that when they have to compete against one another .... they begin fixing up the area in which they were weak. They don't stand still ... they improve. They don't work part time at nails, they are in the business to support themselves .... nails is not a hobby to them .... it is a life to them.

So what else do we notice? Lots of name brand stuff. NailTek and Revivanail and Scentsations and it is all for sale to the customers too. Each nail table is clean and spotless. Each nail table has its containers of products and materials lined up and placed in specific locations. Each nail table has 2 or 3 brushes in a brush holder and each tech has her favorite stubby brush hanging bristles down in the lamp springs with a plastic cover protecting the bristles. Every container of alcohol and acetone and cuticle remover and such is clean and labeled.

Oh they had a sanitation error (that many techs everywhere make) in that they are using those UV Sanitizers to store their implements. Those sanitizers are actually only good for storing implements AFTER they have been disinfected by normal methods. But they have 4 of those UV Sanitizers bolted to the walls and at least it sure looks good to the customers, huh.

So that is all I can think of at the moment. Would you like to have this discount shop on your corner?
How do they stack up in the areas of advantages and disadvantages of discount shops?

walk-ins and appointments
open early and close late
little or no waiting for service
even open Sundays
low prices
pedicure thrones
manicures, pedicures, acrylics, gels, wraps
el cheapo atmosphere or a class act
tv, music, smiles, friendliness
techs licensed
store passes inspection
clean restroom
outstanding hand wash area
no lift nails of course
polish selection
nail treatments selection
accessible to your other shopping needs
clean and sanitary

Look. I know that many of you are in areas where this is not the kind of discount shop you see.
What I am saying, is that this is what is on the way.

Would you like to purchase this nail salon?
It is grossing about $3,700 weekly.
And it is for sale .... owner is asking $90,000
but so far the best offer made has been $70,000

Oh, I know what you are thinking .... after paying the employees taxes and paying the salon income taxes, well then isn't that price a bit high???

I don't think you have caught on to how discount shop owners can afford to drive those Lexus and Toyota Roadrunners.......
I thought that I wrote an article about that before ... but I can't seem to find it ... so
a quick overview ....

The owner does nails and gets first choice of the walkins so the owner does $1,000 a week plus tips. The 3 full time licensed nail techs get paid $600 a week and keep their tips. So you are thinking the owner is grossing about $2000 for herself. And after withholding taxes and FICA and workers comp and then paying expenses and income taxes .... well she makes good money but ....
Hold on .... that is not how the money is handled ....
The owner reports herself as an owner only .... she doesn't make any income actually doing nails. The employees are given 1099s as if they work there as so called independent contractors. And the 1099s show that they are only being paid $250 a week.
Oh, suddenly the whole picture is different .... the figures can now support the claim that this salon only grosses about $1400 a week. And after paying independent contractors and rent and utilities and expenses ....
then the salon is only earning about $400 a week for the owner.
Oh...
now you see way a busy discount nail salon is a gold mine?

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