This is something I see in my e-mail inbox and on YouTube all too often:
It was last year that I noticed that the quality of (name of wig) seems to have gone down a bit.
You are certainly not alone in your observation if you’ve noticed a gradual decrease in the overall quality of certain wig brands over the past decade.
This phenomenon is very real, and something that I hope to tackle in the course of this rather complicated article. My estimation is that this will a very information-rich, 15 - 20 minute read. You may want to save this for when you have time to take it all in. This is a wig blog at the end of the day, and as such, I will paint with extremely broad non-technical brush strokes so that hopefully everyone can follow me here. The concepts in this article are extremely complicated and I will do my best to make them into bite-sized info nuggets to create a cohesive blog post.
Did you know that in the mid-20th Century almost all of the wigs Americans bought were made in the US or Europe? You could always order a wig from the back of a magazine or a catalog, but for medical wigs, women could go to a local shop and buy an original Rene of Paris wig (which was made by a factory owned by a guy named Tony of Beverly in Southern California at the time). The invention of Japanese kanekalon in the 1980s, and easy sourcing of human hair in Asia and India throughout the 1990s, made for a wig boom that saw a new breed of designs take shape: realistic, mass-produced, available in a wide range of colors, and made almost exclusively in Asia.
Part 1: Leave your assumptions at the door!
You are spending less on your wigs now than women have at any other time in history, relative to quality. Things are actually way better now for wig consumers than at probably any other time in the history of wigs. Here are a few reasons why:
- The wigs are generally high quality, especially compared to a few decades ago
- Quality has improved due to technological advances, especially in the field of synthetic fibers
- There is a LOT of competition in the marketplace
- You have a lot of options (which may actually be overwhelming)
- And the prices have LITERALLY never been lower for these items
It may appear as though price hikes have happened over the past several years, but they have not really done much to keep up with inflation of the US dollar or the slowing growth of the Chinese markets, which is real and does have a very real influence on the cost of the things we buy. (I’ll include some links for additional reading in the footnotes below for you, if you’re interested.)
Don’t believe me? Check out this inflation calculator from the Bureau of Labor Statistics website and see for yourself: http://www.bls.gov/data/inflation_calculator.htm
One big hurdle we have to traverse en route to making our point is a problem of PERCEPTION. The value of our currency is in constant flux, meaning that the prices and worth of these products are constantly shifting while our view of what they SHOULD cost tends to remain relatively fixed. This causes some serious problems!
Example 1: The gorgeous Julianne by Jon Renau.
This wig is currently listed at an MSRP of $427 in 2015 dollars.
If we did nothing but adjust for inflation, in 1980 dollars, this wig would have cost only . . . (take a deep breath) . . . $147.94, excluding all other factors! That is how much our currency has been devalued in the last three and a half decades!
Summary: $427 in 2015 only has the buying power of $147.94 in 1980.
Okay. So that STINKS and would seem to make the opposite point that I’m actually trying to make . . . BUT NOT REALLY, if you think about it.
Let’s say this wig cost $427 in 1980. How much would Julianne actually cost today?
The answer: $1,232.49!
Summary: $427 in 1980 has the buying power of $1,232.49 in 2015.
So in this hypothetical universe, had Julianne been around in 1980 and the cost of this wig kept up with inflation, it would be way more expensive than what you’re actually paying for it.
Example 2: The price range of Gabor wigs hasn't changed much at all since 1988.
"Eva Gabor International sells about 1.3 million wigs a year with a suggested retail price of $35 to $110." - The LA Times, 1988.
$35 in 1988 money, adjusted to 2015 levels of inflation = $71.43
$110 in 1988 money, adjusted for 2015 inflation = $224.49
Currently, the lowest priced new Gabor item in my store costs JUST $58.65! This costs LESS than the least expensive Gabor product in 1988!!!
And the highest priced Gabor item is just $254.15! This is only $30 more than the most expensive Gabor product in 1988, and it has much better cap construction and fibers!
Example 3: Observe this page from a 1964 Frederick’s of Hollywood catalog and pay VERY CLOSE attention to the prices:
THESE PRICES ARE RELATIVELY COMPARABLE TO TODAY.
Why does it feel like we’re paying so much more?
A lot of this is perception and, on the surface, the math just doesn’t support it. The median income in 1964 was $6,300 per household (roughly $48,334.82 in 2015 dollars). The median income in 2014, however, was $51,939. As you can see, the median household income in the US has actually risen in spite of the loss of manufacturing jobs and in spite of the recessions and inflation that has occurred since 1964.
What this statistic DOESN’T tell you, though, is that it often takes TWO INCOMES now to make that $51,939 per household, whereas in 1964 the vast majority of households were single-income and based on the male partner’s earning potential. THINGS HAVE CHANGED. (Boy, did that sociology degree come in handy for this article!)
So a very likely reason why the wigs we buy now feel like such a large expense, relative to the past, can probably be chalked up to the fact that individuals are making less than they were before. Culturally, we’re also buying WAY more stuff – computers, electronic gadgets, entertainment and entertainment related services, going out to eat more, buying more clothing, buying bigger houses, paying higher utility bills, etc. – than people did in 1964. There’s also a pretty high chance that you may be purchasing your wigs with your own earnings . . . which psychologically always feels a little more stressful than when someone else is helping you in that process. (Completely side-stepping the fact that even in a single-earner household, you are contributing value to the household in other extremely important ways.) Top that off with the fact that women tend to make substantially less money than men do, and it’s bound to feel like a massive investment to pay a couple hundred dollars for some hair! (see Footnote #1 below for more details)
Back on topic . . .
Even if these wig prices aren’t eating up a larger proportion of our household budgets relative to back in the day (in fact, the data suggests the inverse is actually the case), that still doesn’t explain why prices have remained relatively static. There is no way under the sun that a product should remain almost the same price over the course of 51 years, especially when we have clearly demonstrated that inflation should have made these prices sky-rocket like crazy. Letter E in the above, the “Scamp Beauty,” for instance, SHOULD cost $575.41 in 2015 dollars if the price kept up with inflation! To put it into perspective for you, we used to have an Elegante virgin Remy Brazilian human hair wig called Annabelle on our site that is better-quality hair and the same cap construction as “Scamp Beauty” listed for only $94. In this example, the quality went WAY up, but the price only went up by a measly $19 actual dollars – not adjusted for inflation! – since 1964. If we did account for inflation, though, Annabelle would only cost $12.25 (!!!) in 1964 dollars!
$12.25 (Annabelle) < $75 (Scamp Beauty) <- what that looks like in 1964 dollars
$94 (Annabelle) < $575.41 (Scamp Beauty) <- what this looks like in 2015 dollars
This second one REALLY tells you the point I’m trying to make here. The prices of the modern products are suppressed to such an extent that it points to a reduction that is way more significant than a simple failure to adjust for inflation.
Part 2: Let’s dance!
Wigs are considered part of the global clothing industry. The sort of wigs we sell in this store – namely, ready-to-wear name brand medical wigs – are a mass-produced product meant to appeal to a wide range of consumers with diverse backgrounds, needs, taste levels . . . and budgets. A LOT goes on behind the scenes of any retail storefront, whether online or brick and mortar.
Three basic competing paradigms battle it out in the marketplace for your dollar every day: the Consumer Paradigm, the Retailer Paradigm, and the Manufacturer Paradigm. This economic tug-of-war among consumers, retailers, and manufacturers is relatively static, however, and is something that you will find in basically any business, regardless of what they’re selling.
The Consumer Paradigm: consumers are almost always seeking the highest quality goods for the least amount of money; it is in the consumer’s best interests to keep the end prices LOW.
The Retailer Paradigm: retailers are usually seeking to keep their prices low enough to appeal to consumers, while leaving enough room for PROFIT after they've paid the wholesale cost of the item; it is in the retailer’s best interests to keep the end prices MODERATE.
The Manufacturer Paradigm: name-brand manufacturers want to keep quality high enough that it instills brand loyalty on the consumer end while simultaneously keeping the end-production costs low enough that they (the manufacturers) can charge high wholesale costs on the products and make profit by direct sale to RETAILERS (not end-wearers) using the brand loyalty as leverage; it is in the manufacturer’s best interests to keep the end prices HIGH.
(See Footnote #2 for more commentary.)
I wanted to get all of that out of the way because these three fundamental differences in point of view will have DRAMATIC bearing on how all of this unfolds. It is important that you understand the concepts above before you continue reading this article.
The economics of clothing involve three processes: production (making the clothing), distribution (getting the clothing from the maker to the consumer), and consumption (actually buying and using the clothing). I think you can probably tell pretty quickly who – manufacturer, retailer, or consumer – fulfills which roles in this process.
The system is fiercely competitive at all stages, not only between various manufacturers, brands, and fashions, but also among all three parties in this arrangement, as the production and distribution of these products can also be quite competitive behind the scenes. Manufacturers, for example, are constantly seeking less expensive factory labor with as high of quality output as they can get away with for the price in order to fulfill end-client expectations.
Let's talk about an often misunderstood concept: DEMAND. This is very important for you to know about, too. The “demand” for a given product is not based on the quantity purchased. Demand is actually a complex relationship between consumer prices and what they are willing to purchase at those prices. If demand for a commodity is great, people will generally buy larger amounts of it at various prices than they will buy if demand is small. Consumers are eager for the latest fashions at the lowest possible prices. Manufacturers are always looking at ways to suppress or circumvent this impulse to drive prices down – usually via cache, marketing, and branding. And individual retailers bridge the gap between the two opposing forces to make everything work.
A particular marketing ploy used prolifically in the wig industry to inflate consumer esteem (demand and prices too, via extension) is the use of celebrities to endorse or attach their names to a wig line. These celebrities don’t actually have much, if anything, to do with any part of the design process. Their role is purely one of marketing and endorsement in most cases. They lend their visibility to the brand for a price, and it saves that wig label the trouble of having to establish credibility from the ground up. You should ask yourself: are these a superior product, or are they just marketed really well?
From the textbook Economics By William Boyes and Michael Melvin, page 571:
While establishing credibility by anchoring their products to a celebrity name may help keep prices and demand relatively buoyant, these tactics cannot alter the pace of the ever-changing attentions of the novelty-seeking audience they are trying to capture with their products. Changes in media consumption and the types of media consumed accelerate this cycle of trend adoption and abandonment. This means that the market demand for fashionable hair options is always in radical flux. (Or as Heidi Klum so succinctly puts it, “One day you’re in, the next you’re out.”)
Low-end fashion wigs that tend to be completely machine-made (easy and inexpensive to bring to market) are really best equipped to fill this demand for fashion-forward options because, by and large, once a higher-end, hand-tied product can be made to accommodate trendier looks, it will be out of fashion by the time it can be mass produced on a meaningful scale. (This also explains why these less-expensive types of wigs have been given their euphemistic moniker, “Hi- Fashion.”) These wigs lack higher-end cap features because they NEED to come to market quickly to capitalize on fashion trends while they are still in style. Additionally, the end-price for all of the labor that goes into fancier hand-tied features will invariably turn a lot of consumers off of those products. (Remember: it is in the consumer’s interest to always want the lowest price; if they had it their way, hand-tied features would be a free bonus. Keep reading to know why that should NEVER happen.)
Part 3: How do they keep the prices so low . . . and why?
In our culture we think a good deal = lowest price, never mind what we’re actually spending that money on. This phenomenon has been casually referred to as the “Walmartification” (as in Wal-Mart) of the American marketplace. Entire segments of the wig industry have disappeared due to this “Walmartification” of wigs. For example, the demand has completely fallen away for bespoke wigs (which many people don’t even realize exist), due largely to the high costs involved in making wigs specifically for one specific person’s head. It’s much cheaper to mass-produce something in a factory somewhere over in Asia and then let the individual retailers tweak it to fit you a little better after market, which is a completely different thing than making the wig from scratch just for your head. Because we (as consumers) are always chasing the bargain, the result of these forces is that this cheaper option is eventually the only option we’re left with. This is my first argument for why the artificially low prices created by cheap wigs is bad for all of us: it shrinks the marketplace and limits our options, especially on the higher end. Those bespoke products increasingly get more expensive to make and more difficult to find until eventually they’re gone for all but the very richest among us.
My second argument for why artificially low prices are bad for us is very closely tied to the first: The prices are artificially lowered or suppressed to make it appear as though you’re getting a good deal.
This is a complicated magic trick, a chain reaction driven by one thing: YOU.
The Consumer Paradigm = it is in the consumer’s best interests to keep the end prices LOW.
The problem, though, is that it’s expensive to make a high-quality product. A lot of juggling goes on behind the scenes to try to make everyone’s needs (consumer / retailer / manufacturer) appear to meet in the middle.
If the wigs you’re buying appear to be diminishing in quality over time, that is because people are not willing to pay more, even for a quality product.
Remember up above when I said that it’s in the manufacturer’s best interests to keep the costs of their products high? That is on YOUR end. It is in their best interests to keep the MSRP (a/k/a “the list price,” which almost none of the stores actually use) high.
However, they need to keep the WHOLESALE costs of their products low enough to be attractive to their customers . . . and that ain’t you; that’s me and other wig store owners.
End-Customers (you guys) are highly sensitive to changes in price, and even a minor price increase (such as to adjust for inflation) can be enough to lose your business for good. (Heck, people forget that I offer free shipping on orders over $75, and buy from other places where they end up paying MORE for their purchase just because the initial cost of the item appeared lower by something trivial, like a dollar or two.)
You are the retailer’s customer, and the retailer is in turn the customer of the manufacturer. Because of this, the manufacturer isn’t worried about price fluctuations or fickle consumer behavior for your sake as much as they are obligated to maintain a certain image, manageable sales volume, and price point for the retailers who are buying their products to sell to you. If any of the cogs in this machine go wonky, then all the wheels of commerce can fall right off.
So, while handy marketing gimmicks can tackle the chore of inflating brand value (and demand), the manufacturers have to keep the wholesale prices of their products low enough that retailers can buy them knowing that the we (wig stores) have to compete with one another for the lowest prices to gain the sale from the consumer. This leaves retailers with very low profit margins on most wig sales in order to remain competitive. To facilitate this, the manufacturers have to keep that WHOLESALE cost (that we pay) as static as possible – in addition to keeping MSRP (that you pay) static and high – to make it worth the retailer’s effort to offer their products online in the first place.
This would be hunky-dory if it weren’t for one thing: quality wigs are often expensive to produce and the manufacturers need to make a profit too. This is difficult to do if they have to keep the wholesale costs of their products artificially suppressed in order to bring them to market. To do this, they must cut the cost of production on their end so they can make a profit while the wholesale cost (where they make all their money) basically stagnates.
This suppression comes at the expense of cutting human labor costs (which I will describe in more detail below) and cutting corners in production and material costs (ditto there too).
My third argument for why artificially low prices are bad is probably the biggie: CHEAP LABOR.
Everyone would wear hand-tied caps if they didn’t have to pay for the labor. The reason 100% hand-tied caps cost as much as they do is because a human being sat in a factory for up to a week (sometimes more) sewing every individual strand of hair into that wig and knotting it by hand. It can take that much time and labor to create JUST ONE WIG if it’s completely hand-tied! We are very privileged as members of a post-industrialized nation that we have the ability to buy these in a manner so completely removed from the reality of WHAT THEY’RE WORTH.
Thought experiment: Just think of how much MORE these hand-tied wigs would cost if they were made in the USA.
Here's a super over-simplified example to illustrate the point:
Let's say it takes Suzie 40 hours to make a hand-tied synthetic wig.
40 hours x 2015 federal minimum wage ($7.25/hr, not taking taxes or anything like that into consideration) = $290
Wig Brand X paid Suzie a theoretical $290 in labor in addition to their material costs and overhead for production (HR, payroll, benefits for Suzie, and costs for the factory space, hair, and cap materials)...so let’s just double that price = $580 (though in real life, it would probably be even more)
Wig Brand X sells things to retailers at a 100% margin and then asks retailers to sell things at no less than a 150% margin online. (Which is not abnormal.)
Wholesale cost = $1160
YOUR MINIMUM COST on the retail end = $1740
This would be your cost for a single hand-tied synthetic wig . . . and this is if Suzie is non-union and only making minimum wage! This is a gross UNDER-estimate that has been over-simplified to make it easy to follow.
The easiest way to keep profits high – and the simplest variable to manipulate – is the suppression of employee wages. If everything else in this formula were relatively static except the wages of the workers, think of how much less you would have to pay EVERYONE at EVERY STEP of the manufacturing process in order to get this price point down to just $400. This is the true cost of cheap wigs. And this is just the tip of the iceberg; it doesn’t even BEGIN to touch on the tragedy of ritualistic hair offerings at holy temples and other less-than-ethical ways in which human hair is cheaply sourced for Western consumers!
The fourth argument for why artificially low prices are bad for us: the quality of the products inevitably takes a freaking nose dive over a long enough time line.
We buy more stuff now and we move through trends faster. I don’t even think this is entirely our fault. There is a lot of evidence out there to suggest that social media places a lot of pressure on all of us to present ourselves to the world at our absolute best in a self-constructed narrative of the most positive versions of ourselves. Marketers prey upon this anxiety and continuously push out more fashions, more trends, more EVERYTHING. They know we’ll buy it because we are in a non-stop social media campaign to out-do the neighbors, ex-boyfriends, frenemies, and high school classmates who follow us on Facebook (or wherever on social media).
This is for real. Think about it: in the early 1990s, brands produced two to four fashion cycles per year, big orders coordinated by season, planned months in advance. In the 21st Century, there are no such thing as cycles – only products. If a wig is selling well, we’ll order more from our suppliers, who in turn make more. If pineapple-scented deodorant came inexplicably into vogue, Walgreens would pressure their suppliers to make millions of units before people came to their (olfactory) senses again.
Flexibility of the manufacturing and supply chain is a MUST in a globalized economy. This flexibility means that factories have to compete on the number of wigs they can produce and how quickly they can switch from one style, color, or brand to another. Chinese manufacturers that once made 4 products at a time now make 300. Deadlines are much tighter and margins are impossibly small.
In the fast-fashion era, Western brands can’t always afford the luxury of working with the same suppliers and ensuring that they meet the company’s standards. Rather than managing a giant network of factories themselves, most of them have outsourced this coordination to megasuppliers: huge conglomerates that can take a design, split the production between multiple factories, box up the goods and ship them to their distribution centers (usually in Southern California) in less time than they’ll stay in style.
A recap, if you’re paying attention: virtually all of the manufacturers creating your wigs DO NOT own the factories that make these wigs. They are outsourcing this! The big brands generally utilize multiple independent factories – not just one – to create their wig lines. The bigger the brand, the more plates to spin, and the higher the likelihood that a clunker will periodically slip through the cracks in the production chain. The brands we sell act as coordinator, designer, quality control inspector, material supplier, and wholesale distributors for their brand and the marketing materials for their products. They attempt to minimize quality control issues as much as possible, but it is not 100% possible to avoid defects 100% of the time if you are outsourcing 100% of the manufacturing and oversight of this production to an independent party. (See Footnote #3 for more details.) There’s no guarantee that orders will be filled by the same factory twice, and audits are often carried out after the order has already been placed. This is why anomalous color and slight style variations between one wig of a specific type in a specific color and another are frequent occurrences, even in this marketplace.
In a globalized economy, economic and ecological barriers break down and what we do in other countries will come back to haunt us eventually. The fifth argument for why this is bad is environmental: wigs and the materials used to make them are extremely bad for the environment, so emphasizing rapid consumption in the marketplace is like throwing gasoline on a bonfire. Human hair, for example, requires a lot of hygienic processing and dye before it can be made into the wefts that are used to make your wigs. Synthetic hair, on the other hand, is a petroleum-based, modified acrylic product that is highly dependent upon fossil fuels for its manufacture and is, by definition, NOT biodegradable. So, while this may make you think about the long-term impact of your discarded wigs on the ecosystem, what you SHOULD think about are all the scraps, trimmings, and millions of tons of unused waste materials that are the unseen byproduct of the wig fabrication process. (See Footnote #4 for more.)
Part 4: The Solution?
How do we fix this? I have no idea. The market is an agnostic, amoral force that is driven by a lot of different complicated factors, some of which we’ve barely scratched the surface of in this article.
Presumably (and I realize this is a MASSIVE assumption), if we paid a little more for hair and signaled to manufacturers that these ethical and environmental considerations mattered to us on a large enough scale, it may prompt them to make meaningful changes in how they do business – how they make their products, market them to us, and treat the people who work for them. Heck, if we were willing to pay enough FOR MOST THINGS, not just hair, it may be enough to justify bringing more offshore jobs back to the USA. (Though, to be honest, I am just cynical enough to think that there is a high probability that most global corporations would just pay this some lip service and keep the profits from the higher prices.)
Perhaps if we emphasized a higher cost, higher quality product – factors which often go hand-in-glove in the absence of new technologies – that was more durable and required less frequent replacement, this would be better for the people who live in the places where the factories exist . . . and the rest of us, via extension, as inhabitants of the same spinning heap of moist space rock.
Unfortunately, this is the exact OPPOSITE of how the market is moving, and has been moving for the last 50 years or so.
What I can tell you for certain is that this trend is likely to continue. This article’s intent was to inform you of what’s going on behind the scenes. My hope is that it has been an eye-opener, if nothing else. :)
Footnote #1: I could see this unfair scenario play out all the time in real life as a management-level IT person who used to have access to sensitive data at a large publicly-traded company. (I used to work for a subsidiary of McCann Worldgroup, one of the world’s largest advertising holdings firms. The name should sound familiar if you’re a fan of AMC’s Mad Men. My advertising background is a big part of why I LOVE exposing the manipulative BS that goes on with some of this stuff. I feel that as consumers, it is your right to know what you’re buying!) At my old IT gig, the women almost always made less than the men, even if the women had seniority. This even happened at the C-Level! Perhaps this is because women don’t negotiate aggressively for raises like men do. But the flip side is that whenever “restructuring” happened and lay-offs came down the line, the higher-paid men were almost always the first to be let go. Corporate jobs are a REAL eye-opening experience when you have access to all the data behind the scenes!
Footnote #2: I can hear some of you asking: “Why not cut out the middle man? Why don’t manufacturers sell directly to consumers?” The answer: Ummm . . . How about CAPITALISM? :)
If that explanation seems too glib, then let me explain it in a way that should be pretty cut-and-dried: it’s way easier to do business with retailers than the general public. MOST manufacturers don’t sell directly to consumer. Does Dove Soap or Kleenex sell their products directly to you out of their own specialty stores? No. They sell their products to Wal-Mart and let them do the heavy lifting to sell their products instead so they can focus on making stuff. Manufacturers make way more money for much less headache by selling to professional retailers. Retailers are legally and contractually obligated to handle purchases and other business in a very strict way when we purchase from manufacturers – something that is definitely NOT the case when you do business with the general public. The manufacturers shift virtually all risk and work onto us. In this particular industry, manufacturers also make much more money off retailers for the sale of a single wig purchased in our store than we do. Their profit is always protected because it’s built into the non-negotiable wholesale costs of the products, whereas the sales and other discounts that drive business ALWAYS come out of the retailer’s pocket. So, a better question would be: “Why on Earth would they want to switch?”
Footnote #3: I can hear some of you saying: “Well, if they don’t own the factories and they’re all being made in Asia, then what the heck is the point of buying name brand items in the first place?”
It’s a really good question, honestly. There are a lot of very decent wigs on the direct market from China, for example. The problem is that it is very difficult and time-consuming to shop in these markets. The quality control is often sub-par (or altogether absent), and the consistency from one product to the next is very hit-or-miss. In the name-brand wig market, this is SUBSTANTIALLY reduced. The manufacturers do much of the inspection, design, and all of that on your behalf, and often present their products in a way that can be easily catalogued and displayed for rapid consumption. It’s a lower-risk, slightly-higher-cost marketplace on the front end. Because of the minimized risk and greater product consistency, though, you usually end up with a much less stressful shopping experience . . . and waste less money in the initial experimentation stages, overall, than you would in a generic, direct-from-Asia marketplace.
Footnote #4: The ecological impact of wigs was such a concern to some manufacturers that at one point it became a key marketing talking point. For example, when Alan Eaton relaunched the Envy line in the early 2010s, the biodegradable boxes and marketing materials were a key selling point to attempt to offset their environmental impact. “Go green with Envy.” It’s really catchy, actually. Their logo and website are green for this reason. http://envywigs.com/about-envy/
Sources and continued reading: