If you are running a business, you will find yourself having to make some tough decisions–especially with money and pricing hair extensions and wigs.
From getting your capital settled to building the brand completely, there are many decisions to be made. After all, you are in this business to make money–even if it is your passion.
So, let’s talk about the money aspect of your hair extensions business. 💵
If you have scoped the scene, you may have seen numerous brands and their pricing structures. Some are more expensive than others.
Now, you have to decide how to price yours in a way that you are not going over the range or short-changing yourself.Â
Striking the right balance between covering costs and offering attractive wigs prices to customers requires strategic planning.
To make it a tad bit easier for you, here is a guide to help you set prices that appeal to customers and keep your business sustainable.
Strategies to Help You Price Your Hair Extensions and Wigs
Start with Research
Before you even think about slapping a price tag on your hair extensions or wigs, you’ve got to do your homework.
Take a good look at what’s happening in the market. What are other brands selling their wigs and extensions for? How are customers reacting to these prices?
You can even check out reviews to get a feel for how buyers see the value of different price points.
Your competition isn’t only about pricing. Are they offering free shipping, return policies, or even customizations?
All these factors can influence the price customers are willing to pay. So, research isn’t just about numbers—it’s about understanding how others present and market their products.
Understand Your Costs
To price your products right, you need to know exactly what it costs to make and sell them.
This is where you break down every single expense, from the hair itself to the packaging. Pricing without considering your costs is like playing a game without knowing the rules.
You might get lucky, but most of the time, you’ll lose.
Think about the direct costs like the hair material—even if it’s human hair or synthetic—and any other material you will use, like lace, caps, or clips.
Don’t forget labor, either. If you’re hand-making wigs or have a team of stylists and workers, their wages are a key part of your pricing equation.
But if you are dropshipping your products, then you’d need to add in your subscription price for the service. Then there’s overhead, like rent, utilities, website costs, and even marketing.
All of these costs give you the baseline—the minimum amount you have to charge just to break even.
Once you know that number, you can start thinking about how much profit you want to make.
Setting Your Profit Margin
Now, here’s where things get interesting—setting your profit margin.
A profit margin is simply the extra percentage you add on top of your costs. But how much should you add? That’s the tricky part.
If you want to be competitive, you might want to keep your margins a bit lower, at least at first.
However, if you’re offering something truly unique, you can afford to push for higher margins.
One key to setting your margin is understanding the value of what you’re offering. If your wigs and frontals are high-quality, long-lasting, or come with amazing customer service, your customers will likely be willing to pay more.
Don’t undervalue yourself just to compete on price—especially if you’re offering something better than the rest.
Factor in Differentiation
Speaking of offering something better, one of the most important things in pricing is understanding what makes you different.
Why should someone buy your hair extensions or wigs over someone else’s? If you can clearly answer that question, you’ve got an edge.
Maybe it’s the quality of your hair—premium human hair versus synthetic or ethically sourced products. Maybe you offer customization or special touches that other brands don’t.
When you highlight these unique selling points, you can justify a higher price because you’re offering more value.
Think about how brands in other industries differentiate themselves. Some phone brands charge premium prices because they’re seen as innovative or durable, while others focus on being affordable.
In the hair industry, it’s no different.
Positioning yourself as a premium brand allows you to set higher prices, but that also comes with the responsibility to deliver on that promise.
Two Hair Extensions Pricing Strategies You Can Try
Cost-Plus Pricing
This is where you take your total costs and add a certain percentage as your profit margin.
It’s a straightforward method that ensures you’re covering all your expenses and making a profit.
But be careful! If you’re too rigid with this approach, you might miss out on market opportunities where you could charge more or need to charge less to compete.
Value-Based Pricing
This approach focuses on what your customers are willing to pay based on the value they perceive.
If your customers think your wigs and extensions are top-notch, they might be willing to pay a premium price, even if your costs are low.
This strategy requires a deep understanding of your customer base—what they value and how much they’re willing to pay for it.
It also allows for more flexibility in pricing because it’s less tied to hard numbers and more to the perceived value.
There’s also penetration pricing, where you start low to attract a customer base and then gradually raise your prices once you’ve established yourself in the market.
This strategy is useful if you’re a new brand looking to build a following quickly, but you need to be cautious not to undercut your future profitability and consider your marketing strategy.
Keep Monitoring and Adjusting Hair Extensions Pricing
One thing is for sure: pricing is not something you set once and forget about.
You need to keep an eye on how your customers respond, how your competition evolves, and how your costs change.
The market isn’t static, so your pricing shouldn’t be either. 📉
Check-in on your pricing strategy regularly, especially when there are shifts in the market or changes in your costs.
Maybe you need to raise prices because the cost of hair has gone up, or perhaps you need to lower them to stay competitive during a slower season.
At the end of the day, pricing your hair extensions and wigs is a mix of understanding your costs, knowing your customers, and positioning yourself in the market.
Keep it simple, stay flexible, and always be ready to adjust when necessary.
And don’t forget to provide good customer service for any misunderstanding about the prices.
