THE FINE PRINT
- WHAT IS DIVERSION?
- Diversion occurs when professional hair care products are diverted via the gray market to unauthorized retail outlets such as drugstores and grocery stores. Diversion directly interferes with the manufacturer's distribution channels and legitimate salon revenue. When diverted products are sold at an unauthorized retail outlet it hurts the salon business and ultimately the overall beauty profession.
- IS DIVERSION ILLEGAL?
- Usually not, although, there may be a breach of contract between the manufacturer and the salon. By interfering with a valid contract, the "diverter" or "collector" may be in violation of the law. The unauthorized retail outlet, however, has committed no infraction unless the product is stolen, counterfeit, or has had the batch codes altered.
- HOW DIVERSION HAPPENS:
- "Collectors" contact salon owners and arrange for the salon owner to purchase large quantities of hair care products on their behalf. The "collector" agrees to pay the salon owner as much as 15% profit for the products. Usually the "collector" makes arrangements to collect the product soon after it is received by the salon. By agreeing to divert salon products, the owner is assured of quick sales, has no long term storage, and makes a steady, although less, profit out the back door into the gray market.
- WHY DO UNAUTHORIZED RETAIL OUTLETS STOCK DIVERTED PRODUCTS?
- We have grown accustomed to "one stop shopping." The product is there because the current consumer wants it there. When enough people ask the manager of the unauthorized retail outlet for professional products, he/she must respond to the consumers needs.
- ARE YOU IN DANGER WHEN YOU BUY DIVERTED PRODUCTS?
- You may be. In most cases, the products on grocery and drugstore shelves are old. Many times it takes a year from the time the manufacturer ships the product to a legitimate salon until it shows up in an unauthorized retail outlet. Additionally, although unknown to the retailer, there have been times when the products has been tainted and/or counterfeited, causing damage to the scalp.
- HOW ABOUT THE PRICE IN AN UNAUTHORIZED RETAIL OUTLET:
- Surprisingly enough, the cost of a professional hair care product in an unauthorized retail outlet is usually more expensive than in your professional salon. That's because the grocery and drugstore product has been touched by many more people. Remember, the "collector" purchases it from the salon. It may then be touched as many as four or five more times before it actually reaches the unauthorized retail shelf. Each time the product is touched, the price is increased.
- WHAT YOU CAN DO TO HELP STOP DIVERSION:
- Don't buy diverted products found in an unauthorized retail outlet, and tell your friends about the possible dangers. If you have already purchased professional products from an unauthorized retail outlet, return them for a refund. Remember, we do not stand behind products purchased at an unauthorized retail outlet.
- WHAT WE ARE DOING TO FIGHT DIVERSION:
- Sebastian Professional is firmly committed to devoting the resources necessary to fight diversion and support the professional salon business. We have instituted a "zero tolerance approach" and are committed to providing the best anti-diversion plan of any manufacturer of professional hair care products. We have a state of the art coding system that allows us to identify products found in an unauthorized retail outlet. Once we have identified a diverting account we no longer permit the salon to purchase our product. Our company conducts audits of our distributors and salons and maintains a "hot line" (800) 829-3788 for anyone to report diversion or unusual activity. We also offer monetary rewards for information leading to a successful civil or criminal prosecution. We conduct investigations into diversion activities and pursue legal actions with the assistance of an outstanding law firm that continues to battle the diversion issue in the state and federal court systems.
Together we can put an end to diversion.