How to start a hair/wig business? 7 steps to success

Table of Contents

Rising demand for hair extensions: Market for hair extensions is expected to grow at a compound annual growth rate of 13.04% from 2021 to 2028. There has been an increase in demand for hair extensions among women of all ages (source: ReportLinker).

Increasing popularity of wigs: Demand for wigs has also increased over the years. One of the reasons of such high demand is evolving fashion trend: getting a new hairstyle is no longer limited to hair salons, but also wigs. While some other customers who suffer from hair loss due to diseases such as cancer also compose majority of wig users. The global wig market size was valued at $4.2 billion in 2020, and is projected to grow at a CAGR of 16.8% from 2021 to 2028 (source: Grand View Research).

Profit margins: According to market research, hair and wig businesses can reach 40%-60% profit margin. Which indicates how much profit the business has generated for each dollar of sale. In the case of hair and wig industry, a net income of $0.40-$0.60 is generated for each dollar of sales.

Data above suggests that starting a hair or wig business can be profitable. However, it is crucial to identify and occupy a specific niche within the market and outcompete other brands. For example, high-quality hair extensions or unique wig textures.

It is also important to conduct market research; identify competitive advantage and target audience. From there, develop brand image, marketing strategy to provide top-notch products and services in the market, eventually reaching success.

Identify your target audience and product

First, identify target audience before finalizing on which product to sell. In other words, determining the composition of future customer base and their preferences before choosing which product to offer.

There are two main types of hair products: hair extensions and wigs. Each product is targeted to different customer group based on characteristics such as age, race, and gender. For example, Caucasian women generally prefer to use hair extensions. Meanwhile, African American women tend to be more interested in hair weave and wigs.

Such difference in preference is a result of different hair textures at birth. African American women usually have curly hair with lots of volume. In that case, they use hair weave and wigs to protect their natural curly hair and to achieve a variety of hairstyles. Overall, customer needs are key to identifying target audience and your choice of product.  

Clarify your sales format

You need to clarify either to sell online or open a physical retail store. Here are the pros and cons of both sales channels:

Online Hair Business


Larger potential customer base: 

An online platform allows the business to attract potential customers from all around the world, whereas a physical retail store is limited.

Lower overhead costs: 

A physical retail store has a high start-up cost including rent, electricity & water, and equipment. Meanwhile an online store does not.

Flexible operating hours: 

An online store can operate 24/7 as long as customer service representative are available online.


Lack of personal interaction: 

Online store does not offer opportunities for face-to-face customer interaction like a physical retail store does. It is more difficult for business to enhance customer relations.

Shipping and handling: 

Online store possesses higher costs in shipping hair products, in particular, wigs and hair extensions that are heavy in weight.

Limited sensory experience: 

The nature of hair products such as wigs and hair extensions often require customers to feel the texture by touching. However, when operating online, customers are limited in sensory experience. As a result, products may not meet customer expectation and could be returned. 

Physical Hair Store


Personal interaction with customers:

Physical retail store provides a location for face-to-face communication. Which is easier for the business to build customer rapport than an online store.

Ability to provide personalized service:

A physical location allows the business to provide personalized services such as wig fitting and hair extension.

Immediate satisfaction:

A physical retail store gives customers immediate access to see and feel the hair products. Such sensory experience makes the process of buying and selling easier.


High overhead costs:

A physical retail store has a high overhead cost including rent, electricity & water, equipment, and staffing.

Limited customer base:

The customer base for a physical store is limited since it depends on its location.
Limited operating hours:

A physical store has daily operating hours with the need for hiring staff. Unlike an online store where customers can visit and purchase products 24/7.

Creating a brand that resonates with customers

  • Develop a strong brand identity: 

Build your brand identity with unique voice and tone that establishes brand’s value and mission. A positive brand image helps to connect with your target audience.

  • Share your story: 

Share your brand’s story as it aligns with your positive brand image. By sharing story with customers, a sense of community and involvement is felt by customers.

  • Provide valuable content: 

Offer informational customer services such as hair extension tutorial or hare care routine on social media platforms to gain popularity and enhance brand image.

Find a reliable supplier

To find a reliable hair supplier, there are many methods you can try.

Research online: 

Search for suppliers online and evaluate their websites or online stores. Find out the types of hair products they offer. In addition, read reviews and ratings from their customers to evaluate their reputation and reliability.

Attend industry trade fair:

Attend industry trade fair to meet suppliers and examine their products. It offers an opportunity to ask questions and gives access to a sneak peek at their products.

Check industry directories: 

Check industry directories and databases, such as Alibaba to retrieve contact information of industry suppliers.

Ask for referrals: 

Receive referrals from other businesses in the industry for reliable suppliers they’ve worked with in the past.

Request samples: 

Request samples for products before placing order. It gives opportunity to inspect quality of supplier’s products.

Verify certifications: 

Verify legal documents and certifications of potential suppliers before signing on contract or placing orders.

Review pricing and payment terms: 

Discuss pricing and payment terms with supplier. List negotiated terms on legal binding contract to ensure fairness and transparency.

If you follow these steps, you will find a reliable supplier in the hair/wig industry.

Marketing your products

Use marketing strategy to gain popularity and expand your potential customer base.Here are some ideas for marketing hair products:

Social Media: Use social media platforms, such as Instagram, Facebook, TikTok, and YouTube, to advertise your products and attract wider audience. Pay for advertisement to gain exposure is also a good idea for online advertising.

Influencer Partnerships: Collaborate with social media influencers in the industry to further promote your products. Their established customer base and popularity facilitate your branding.

Search Engine Optimization (SEO): Improve your website to increase its visibility in search engines, such as Google, attracting more customers.

Email Marketing: Send newsletters, promotional offers and new product release through email to potential and existing customers.

Promotions and Discounts: Offer promotions and discounts to encourage customer consumption. This can help to build brand loyalty and encourage customer retention.

Attend Industry exhibition: Attend industry exhibition and events for networking and discovering potential customers.

Packaging and Branding: Develop eye-catching packaging and branding for your hair products. By creating a strong visual identity, customers will distinguish your brand from others.

By implementing these marketing strategies, you can increase your brand awareness and social media popularity, ultimately results in an increase to your sales revenue.

Establish relationships with customers

The key for success of a hair/wig business is customer loyalty. To do so, you will need to provide excellent customer service and create a brand that resonates with customers.

Here are some tips for achieving this:

  • Provide exceptional customer service: Make sure your customer service is top-notch by being friendly and helpful. It is important to listen to customer feedback and adjust accordingly.
  • Create personal connections: Enhance customer loyalty by building personal connection with customers, such as responding to customer comments on social media platforms, sending surveys etc.
  • Offer customized solutions: Listen to customer feedback, make adjustment, and offer solutions tailored to each customer’s needs. In this way, trust and customer loyalty are established.

Continuously evaluate and improve your business

Continuously evaluating your business and identifying areas for improvement is necessary. For example, sales tracking, listen to customer feedback and analyzing market trend.

Track sales: 

Monitor sales to identify patterns and trends. This can help you identify best-selling product, which allows you to adjust your inventory and marketing strategies accordingly.

Solicit customer feedback: 

Motivate customers to provide feedback about their experience with your product and services. Listen to feedback and make adjustment to enhance customer loyalty.

Monitor industry trends: 

Stay ahead of industry trends; be the innovator and identify new opportunities for growth. Attend industry events and pay attention to the news to stay up to date.


Conduct regular internal reviews: 

Conduct quarterly or yearly financial reviews within the company to examine profits and losses. This can help you optimize profit; grow earnings and reduce costs.

Analyze your competitors: 

Pay attention to competitors in the industry. Be aware of their products, pricing, brand image and marketing strategies. Develop your own competitive advantage and stay ahead of the game.

By continuously evaluating and improving your business, you will become the leader of the hair/wig industry.

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