Thriving Stylist Podcast – Episode #384: How to Navigate Tariffs: Pricing, Logistics & Communication

Release Date: May 5, 2025

Introduction: Understanding the Tariff Landscape

In Episode #384 of the Thriving Stylist Podcast, host Britt Siva delves into the complex and evolving world of tariffs and their profound impact on the beauty industry. With the recording date set on April 21st, Britt emphasizes the fluidity of the situation, noting that "so much about this is changing in real time" (00:51). She acknowledges the anxiety many stylists feel amid uncertainty, particularly regarding how to navigate these economic shifts without clear solutions.

Background: The History and Rationale Behind Tariffs

Britt provides a comprehensive overview of tariffs, tracing their origins back to the Tariff Act of 1789, one of Congress's first bills. She references Douglas Irwin, an economics professor at Dartmouth College, to explain the Three Rs of Tariffs:

1. Revenue: Generating income for the government.
2. Restriction: Protecting domestic industries by making imports more expensive.
3. Reciprocity: Using tariffs as bargaining chips to negotiate trade deals with other nations.

However, Irwin posits that "you can't really achieve all three of the objectives at the same time," highlighting the inherent trade-offs in tariff policies (06:45).

Current Tariff Developments: A Rapid Timeline

Britt outlines a rapid succession of tariff implementations and retaliations between the U.S. and China:

• April 2, 2025: President Trump issues an executive order for a 10% reciprocal tariff on most U.S. trading partners, set to take effect on April 5th.
• April 8, 2025: China responds with a 34% tariff on all U.S. imports, effective April 8th.
• April 9, 2025: Trump retaliates by increasing the reciprocal tariff on Chinese goods to 84%, effective April 9th.
• April 11, 2025: China escalates by raising its tariff on U.S. goods to 125%, effective April 12th.

This tit-for-tat escalation has left both nations at a diplomatic impasse, with Britt expressing uncertainty and concern over the negotiations (07:50).

Impact on the Beauty Industry: Pricing and Product Supply

Pricing Strategies Amid Increased Costs

One of the primary concerns Britt addresses is the rising cost of goods due to tariffs. She discusses how stylists will need to adjust their pricing strategies to accommodate these increases. For instance, a 20% rise in the cost of permanent hair color could necessitate a price hike from $82.12 to $86.62 for a root touch-up (19:30). If costs escalate by 30%, the price might increase to $88.

Britt provides a practical example using her Thriving Stylist 7-Factor Dynamic Pricing Calculator, demonstrating how even modest price adjustments can help offset increased costs. She advises stylists to consider whether to absorb the costs or pass them onto clients, emphasizing that maintaining competitive advantage might require enhancing perceived value if prices are to rise (25:15).

Logistical Challenges and Shipping Delays

Beyond pricing, Britt highlights significant concerns regarding logistics. She anticipates that shipping delays will become more prevalent as customs processes become more stringent. This is particularly troubling for stylists who rely on timely shipments of critical supplies like hair extensions:

"The slowdown of shipping is not something I've heard a lot about, and in my research that genuinely concerns me a little bit is that are we going to have this lull where things are sold out for a minute because there's this downtime and shipping from foreign countries becomes unpredictable because the process isn't ironed out." (15:40)

She explains the new customs procedures, including a $9 flat fee imposed by USPS for processing international packages on top of the applicable tariffs. This added layer could lead to longer delivery times and increased operational challenges for salon owners (12:30).

Strategic Advice: Navigating the Tariff Terrain

Britt offers actionable strategies for stylists to mitigate the adverse effects of tariffs:

1. Evaluate Pricing Models: Utilize tools like the Dynamic Pricing Calculator to determine necessary price adjustments based on increased costs.

2. Enhance Perceived Value: Invest in marketing and service quality to justify price hikes. By elevating the client experience, stylists can maintain demand even with higher prices.

3. Diversify Suppliers: Where possible, source products from tariff-free countries or domestic suppliers to reduce dependency on affected international markets.

4. Stock Management: Anticipate potential delays by increasing inventory of essential products before tariffs fully take effect.

5. Transparent Communication: Inform clients about the reasons behind any price increases to maintain trust and understanding.

Britt underscores the importance of flexibility and proactive planning, urging stylists to adapt their business models to the shifting economic landscape (30:20).

Focus on Hair Extensions and Color: Specific Challenges

Hair Extensions: High-Risk Products

Extensions are particularly vulnerable due to their heavy reliance on imports from China. With tariffs potentially rising to 125%, the cost of hair extensions could more than double, forcing stylists to make tough choices—either sustain lower profit margins or increase prices significantly. Britt expresses empathy for extension specialists, acknowledging the severe impact:

"We are in the service-based industry and most of our margin is based on our demand. If we were selling sneakers, if we were selling tires, if we were selling iPhones, this would be a lot scarier because we're selling a physical good." (28:10)

Hair Color: Managing Increased Expenses

While the cost of hair color has risen by approximately 21% since 2021, Britt advises that this increase can be managed with strategic pricing. She demonstrates that a $4 to $6 increase in service prices can offset the higher product costs without significantly deterring clients, provided the stylist maintains a strong market presence and perceived value (22:50).

Conclusion: Staying Vigilant and Adaptable

Britt closes the episode by emphasizing the importance of staying informed and adaptable in the face of economic uncertainties. She encourages listeners to remain vigilant, monitor consumer spending trends, and continuously engage with the community for support and ideas. Britt reiterates her role as a resource, inviting stylists to reach out with questions and feedback to navigate these challenging times together (35:00).

"Let's keep the conversation going. Let's keep the questions pouring in. If anything comes up for you, please hit me up in the DMs or leave me a rating or review on iTunes and I'll support you as best as I can." (34:10)

Key Takeaways:

• Tariffs are here to stay for the foreseeable future, necessitating strategic adjustments in pricing and supply chain management.

• Service-based businesses like salons have more flexibility to adjust compared to those reliant on physical goods due to their focus on perceived value and client experience.

• Proactive planning and enhanced marketing efforts are crucial for maintaining profitability amidst rising costs and logistical challenges.

Resources Mentioned:

• Dynamic Pricing Calculator: A tool featured on the Thriving Stylist Podcast to help stylists adjust their pricing based on cost fluctuations.

Stay tuned to the Thriving Stylist Podcast for more insights and strategies to help your beauty business not just survive, but thrive in changing times.