Hair Biz: The 6 Pricing Tiers of the Hair Industry

First things first, when it comes to buying all things hair, you should understand the tiers of prices to know whether you are getting the best value for your hair. But in order to get the best value, one would have to know where to look. Read further as we break down these tiers so you can navigate the hair industry like a professional distributor. If you are not actually sourcing the hair yourself and producing it, then you want to get the next best price.

There are six pricing tiers of the hair industry before it hits retail price, also known as the markup price. I’ll even let you know how to beat the most commonly believed prices of AliExpress and Alibaba. Once you learn these tips and ways to venture the hair industry, you will find how to purchase the best hair deals according to your budget.

The six tiers we will talk about are 1. the original source price 2. the factory price, 3. The price for Locals 4. the Inbound foreigner price 5. the AliExpress price (the smart foreigner price), and 6. The online wholesale price

1. The Original Source Price

Just as it sounds, the original source price is the price for raw and unprocessed hair cut straight from the donor’s head or hair and or what is collected from the temples- if you source from a place like India. This hair is not to be confused with what is advertised as virgin hair that you buy from a store. Virgin hair is still processed through a factory of some sort, meaning that it was cleaned, and maybe steamed to make curls or dyed with color, and maybe sprayed with some soft chemicals to make it soft. Raw hair, on the other hand, is like the hair on your head. After a while, raw hair needs to be washed and cleaned, separated, sifted and sewn onto a weft for bundles, made into a frontal or closure piece, and or wig. This is ultimately the bottom price because you are essentially paying the donor for his or her hair directly and not paying for after processed virgin or remy hair that has been processed and cleaned by a factory.

2. The Factory Price

The factory or manufacturer price is the next price tier and a little more expensive than the original sourcing price, in that the buyer pays a little more for the factory to do the dirty work- process the hair. Processing just means getting the raw hair ready to be sold in stores. The hair is cleaned, sifted through, sewn on a weft for bundles, that can be later sewn into a wig; or readied for frontal or closure pieces. These are usually the natural colored hairs that are labeled as virgin or remy hair. The hair may also go through additional processing for curled styles and textures, and dyed colors, making the hair more expensive. For this reason, straight hair is always the least expensive “texture” or “style” of hair while curly and or dyed hair can be the most expensive. Since the latter styles take more factory processing and work, they cost more money.

3. The Price for Locals and Nationals

Almost always, especially in China and India, local nationals will always get a better deal for pricing hair. Don’t take it personally, you can look at it as a person paying taxes for an imported product verses a home grown product. Manufacturers are going to negotiate better prices for their own nationals to keep the economy and market in tact and flow. It just makes sense in terms of nationalism. So you better get your negotiating skills up or employ a local or national agent to bid for you. Sometimes, I can over hear the vendor negotiating a certain price in mandarin, unbeknownst to the vendor because they don’t know that I can understand their conversation. At that time I ask for the same or lower price and it will most likely be granted, but in order to even get the price for locals, you have to be an inbound foreigner, the next tier.

4. The Inbound Foreigner Price

The inbound foreigner price basically means that someone who is not a local of the country where the hair is sourced actually visits that country to visit the hair factory or market to buy the hair. Think of the buyer that flys to a Chinese or Indian factory. Almost always, this price is the best one can get if they are not a local or national and or don’t use a local or national agent. The plus of being inbound is that you can actually see and feel the product in person versus seeing perfected studio-quality photographs on hair online that may or may not be the real deal.

5. The Online wholesale Price (The Outbound Foreigner Price)

This is the price of online wholesalers such as AliExpress.com that is usually targeted towards foreigners who are not inbound and buying hair from abroad. It is higher because for a few reasons: vendors can afford to charge a little more online because you are not negotiating in person so the price is set. Also, vendors know that if you are thousands of miles away and probably don’t intend to visit, they are at advantage to set a price and there is little to no room for negotiation outside of the online platform. This tier is still more affordable than the fifth tier and retail pricing but you take a risk of buying falsely advertised hair.

6. The Warehouse Price.

Warehouses are usually storage buildings that hair manufacturers place in customer cities to help do more international business and scale for their companies. These prices are usually lower than retail but tend to be a little bit more than online wholesale prices because the price now factors in shipping and exporting fees. The pro to shopping at a warehouse is that you get to feel the hair just like you would at the factory, however, you don’t get the factory price. I hope this helps you determine how and where to buy your next lot of hair. Just remember, the more hair you buy, the more negotiating power you have.