it’s a big stinking problem……it hurts our business, let’s talk honestly and without emotion so we can look at this monster objectively. Someone start, ask a question, make a statement, give everyone an opinion. I will tell you what we are doing about it and what I know about it.
Connie
Wal-mart is one of my problems. They have offers I can’t compete with. There is also a salon 10 miles from my salon that sells PM at wholesale prices. Why pay full price? I tell clients what to use and they buy from the guy in Upper.
By: Jennifer on June 23, 2007
at 3:18 am
First of all…I certainly agree diversion hurts our industry and our own businesses.
One of the biggest challenges I see is that although we each have a responsibility to educate our clients on diversion, we as small businesses have little to no control over the stores who carry the diverted Paul Mitchell products. I’ve approached the managers of stores in our city (such as Meijer) and they say they have no control over ordering as it comes from “corporate”. So, what can we do about that? And what can/is Paul Mitchell doing to address “Corporate” headquarters who seemingly have the control over the placement of these diverted products?
By: Kyle on June 25, 2007
at 1:55 pm
Diversion comes from the following places: dishonest distributors, dishonest manufacturers, dishonest salons and stores, dishonest chains, salons that went out of business and want to get rid of thier products, stolen frieight, dishonest employees of distributors, sub distributors manufacturers and warehouse employees who set up false accounts and dabble in the grey/black market. This is big business and shampoo is the least of the diversion problems. John Paul Mitchell Systems does not sell to retail outlets, they only sell to Distributors and a limited number of chain salons. They cut off several million dollars worth of business last year and Paul Mitchell Ohio cut off over $750,000.00 worth of business last year, 2006, in Ohio and West Virginia alone of suspected sub distributors and salons. We give our 18 Salon Service Professionals a $25.00 dollar budget per month to buy diverted products, we send them to John Paul Mitchell Systems, they de-code the products and send them to the distributor that they came from and are charged a $100.00 a bottle fine for letting the product slip into the diversion chain. Much of the diverted product is counterfeit and it gets mixed in with the real and is very difficult to tell the difference. The large retail chains purchase Paul Mitchell Professional Haircare Products from a company by the name of Quality King. QK is the largest redistributor of grey/black market products in the word. They send a van weekly to pick up products from salons who keep an inventory on shelves, posing as real salons and selling the newely arrived order from their distributor out the back door and making anywhere from a 7 to 10% profit margin on these products. As I said earlier, shampoo is the least product the QK deals in, QK is a major wholesaler of diverted goods involving many industries, not just Paul Mitchell. Because of the Fair Trade Act in the USA, once you buy something, it’s yours to do whatever you want, the Salon Agreement is the only teeth we have to protect our intention. Until the government does something to protect consumers from this under health and safety it will go on. Judges pretty much have the opinion that “It’s shampoo, not a murder case…..” At this point JPMS can’t even recall products that need to be because of being old etc. because most of the time batch codes have been removed. It’s a matter of ethics with the people we deal with. More comments please, I want to continue this dialogue as I think most salons don’t know the depth of this. Shampoo is the least problem, food, drugs, baby food, cigarettes and more is also diverted.
By: Paul Mitchell Ohio on June 25, 2007
at 9:02 pm
Kudos to Paul Mitchell Ohio for openly addressing the issue of diversion. Diversion is an issue that has plagued our great industry for years. At Paul Mitchell, we don’t tolerate it and we do everything that we can to control the problem.
Paul Mitchell is the only manufacture with a national TV ad that targets the consumer and talks to them about diversion. In the ad, we explain that you should not buy our products in Drugstores, Grocery Stores or Discount stores. We have produced educational materials for salons so that they can educate themselves and in turn their customers and staff about diversion. (call 888-389-8884 for a Product Control Kit). Additionally, we have instituted and are enforcing per bottle fines for distributors’ products that end up in the open market. This action has lead to the identification and termination of distributors and salons that were involved in diversion. John Paul DeJoria, the co-founder of this great company, does everything he can to spread the word about diversion to consumers and salon professionals – he is behind our diversion control efforts 100% and with his support we have cut off millions of dollars in diversion in the last year alone.
This is not a battle that we can fight alone we need the help of everyone in the industry. Educate yourselves about diversion so you can educate your customers. Don’t sell to diverters and report diverters if/when you are approached. Display diversion control materials in you salon and retail area.
If you would like more information on diversion check out the http://www.paulmitchell.com or http://www.paulmitchellpro.com or call 888-398-8884.
By: Vikki Bresnahan Director of Product Distribution Control for Paul Mitchell on June 26, 2007
at 12:52 pm
The Wal Mart situation…..the salons that are inside of the Wal mart stores are owned by Regis. Regis is the largest salon chain in the world, I don’t know how many salons they now own but it is in the high thousands……they have bought every chain in Ohio and around the country. they are legit and licensed. Look at it like the restaurant business, McDonalds vs. the locally owned chef owned restaurant where you know the owner and have your favorite table and love the food. You can make your Salon more inviting and just as well stocked as the impersonal large corporate salons, don’t let “big” intimidate you and your dream and visions!
By: Connie Lang on May 16, 2008
at 3:10 pm
Why doesn’t JPMS simply copy whatever Aveda does to stop diversion? I NEVER see their products in drug stores etc, and you know there must be huge demand for it.
By: PatrickW on June 1, 2008
at 9:03 pm
Partick, I don’t know what Aveda does….I will find out and get back.
By: Connie Lang on June 9, 2008
at 3:17 pm
Patrick, I talked to the President of JPMS today, Luke Jacobellis and he said that Aveda is in a lot less salons, just not as much of the product out there and that they have direct and controlled distribution but you do see it diverted. He said that it’s in total proportion to their national sales. I really need to find the latest from the Nielsen Report which tells what international and national sales are for each manufacturer as well what percent of their sales is diversion. That is the key…some manufacturers are 80% diversion and some are a small fraction, numbers tell the story. I will look into this.
Connie
By: Connie Lang on June 10, 2008
at 5:03 pm
Lately I have been receiving comments about diversion from four different names all with anonymous email addresses from foreign countries so they cannot be traced making some pretty serious accusations. I say to all of you or to you, if in fact you are all one in the same, tell me who you are, what proof you have and stop hiding. Call me directly. If you care about the industry tell the world and stop hiding
Connie
By: Connie on August 28, 2009
at 6:09 pm