Why 25% Tariffs Don’t Mean a 25% Price Increase for Your Salon.

Nina Tulio- UPDATED 5/8/2025

We have been hearing of tariffs for months. Recently some of you have been impacted. Especially if you are an extension artist. I feel for you and understand this is a stressful time. I got you!

What is a tariff?
Tariffs are taxes or duties imposed by a government on imported goods (and sometimes exported goods). They're usually added to the cost of products that are made in another country and shipped into yours.

The current tariff landscape is complex and varies significantly by country and product. Overall, the average effective tariff rate for consumers in the U.S. is 28%, the highest since 1901 The Budget Lab at Yale. This includes a 20% tariff on all imports from China plus an additional 125% on some, resulting in a 145% tariff on most Chinese imports. Other countries also face tariffs, with some reaching 100% for certain products. 

**It's important to note that these tariffs are dynamic and subject to change

With tariffs on beauty industry imports, you might be worried about skyrocketing costs and needing to raise your prices by 20-25% to stay profitable. Good news—you don’t!

While tariffs may impact certain products, there are ways to minimize the effect on your business without drastic price increases.

Why 25% Tariffs Don’t = A 25% Price Increase.

Lets’ do the math using 25% as an example.

• A 25% tariff applies to the cost of imported goods, NOT your entire service structure. Let’s break it down:

• If a color tube costs $10, a 25% tariff adds $2.50. EX: If you spend $1000 a month on back bar supplies 25% is = to $250 for the MONTH which = $62.50 a week——not a massive jump. I teach to allocate 15% or less for back bar product cost for independent artists. And 6% or less for backbar product cost for commission salon owners monthly. THIS is the area you want to pay attention to and how much it will increase your monthly % due to the tariffs.

• Since backbar and retail products are only a fraction of your expenses, your total cost increase will be much smaller than 25%.

• Payroll, rent, and utilities make up the bulk of your costs, and they aren’t affected by tariffs.

  **If you are a part of my courses you have access to my budget and pricing calculators. You can run this simple formula to see how this will impact your profit and how much of an increase you will NEED to stay profitable. This will help you make decisions based on facts NOT fear.
  Click here for commission owners ——- Click here for independents

What’s next? How to Move Forward Without Raising Prices Drastically

• Assess the Real Impact – Review how much of your product inventory is affected. Some brands may not be impacted at all if they manufacture in non-tariffed countries.

• Adjust Smart, Not Scared – Instead of a 25% price hike across the board, consider a small, strategic increase on specific services if necessary.

• Reduce Waste & Maximize Efficiency – Train your team to use precise product amounts and minimize waste. Small changes in color mixing and backbar usage can offset higher costs. I suggest using VISH for this very reason.

• If you’ve been impacted by these tariff increases, now may be a good time to explore alternative brands or suppliers that offer similar quality without the added cost. Staying flexible can help protect your profit while maintaining the client experience.

• Upsell, Add Value & Focus on Volume – Instead of raising prices drastically, look at ways to increase sales volume by filling gaps in your books, attracting new clients, and maximizing each appointment. Encourage pre-booking, and added value services like gloss treatments or deep conditioning treatments to boost revenue without raising prices. And let’s not forget about those express treatments.

  How To Communicate A Tariff Increase To Your Client?

  The question I have been getting asked recently is.
  How do I communicate this increase with my clients?
  
  Short and sweet with clarity. You don’t have to put the emphasis on tariffs—just be transparent about rising product costs and your commitment to providing a quality experience. I added 2 scripts below.

  Here’s a light, honest script:

“Hey [Client Name], I wanted to let you know that due to a recent increase in product costs, there’s been a small adjustment to my prices. I always want to provide the highest quality service with the best professional products, and this helps me continue doing that while maintaining the experience you love. Thank you for your continued support—I appreciate you so much!”

Or something bolder if that’s your vibe:

“I’m committed to giving you top-tier service with high-performance products. While some product costs have gone up industry-wide, I’ve made small, thoughtful adjustments to reflect that—so I can keep showing up for you with the quality you deserve.” Thank you for your support!

P.S- I have a full on Price increase guide based on my 3 tiered increase system from my courses.
If you are questioning how much and when.. Grab a copy for free here.

Bottom Line: The tariff increase doesn’t have to derail your business. I understand how stressful this can be. Stay informed, make small but smart adjustments, and focus on value over panic. This is a great time to dive deeper into the finances within your business and make adjustments. Your salon can stay profitable and competitive without drastic price increases.

Looking to price your service with confidence? Check out Make That Money course for suite owners/renters. And in my Synergy course for commission owners.

Psst! MORE Free resources are a click away!

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