Creating Competition Or Customers?

Marcella Ellis, a 15-year hairstylist, doesn’t mind divulging her salon secrets. In fact, she makes it her business. Entrepreneurial suicide, you think? To Ellis, owner of Marcella Ellis Signature Hair Replacement Center, it’s clever business marketing.

In 2004, Ellis, who owns salons in Dallas and Laurel, Maryland, added educating and supplying to her hair-weaving skill set with the launch of the Marcella Ellis Collection, her signature line of human hair. The bold transition helped Ellis pull in $110,000 last year. But that isn’t all. Hairdressers seek out the hair-weaving maven to learn advanced techniques that they can use to further their own careers. It sounds crazy, but there’s a method to Ellis’ madness. Marketing herself as a supplier, she sells the stylists on her top-notch hair products and services, so they continue to seek her out for what they need. Come again?

“Ultimately, our goal is to make them customers,” says Ellis. “We train them, and then they become clients and consumers. My goal is not to service everyone, but to supply.”

As an African American woman selling human hair, she knows she’s tangling with a billion-dollar market largely dominated by Asians, the biggest hair exporters in the world. But to grab her slice of the pie, she’s responding to a demand for superior hair products and bolstering a unique business model at the same time.

Her company sells customized hair in an array of textures and colors. She still turns to Asian manufacturers, but requires them to process the hair based on her specifications. Ellis and her team tour the country wowing professional stylists with the hair collection, and then deliver hands-on lessons in sophisticated weaving methods. Upon completing the seminar, stylists are encouraged to market their own business using Ellis’ tools of the weave trade. As incentive, Ellis offers a monthly commission check to stylists who join her salon member network, Club M.E.

A recent survey conducted by the American Health & Beauty Aids Institute, the national trade association representing the leading manufacturers of ethnic hair care and beauty related products, found that 27% of stylists surveyed said that between 31% and 50% of their clients get hair weaves, 23% say between 11% and 30% of their clients get weaves, and 38% of stylists stated at least 10% of their clients get weaves. “Hair weaving is an integral part of the beauty business because it is in high demand by consumers,” says Geri Duncan Jones, executive director of AHBAI.

Ellis has found her track. In 2005, she projects her business to pull in an estimated $950,000. That includes sales from seminars, which can run between $400 and $1,000 a session; her high-quality hair marketed on; and instructional videos and DVDs.

“We have just really tapped the market, and we’re doing incredibly well,” says Ellis, who hopes to move away from her styling chair for good and focus on building her empire. “There’s no limit to the earning potential.”