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How to Start a Hair Extension Business [9 Simple Steps to Success]

If you are into beauty and enjoy helping people who want to look their best or are simply looking to make some great extra income on the side selling a product that will always be in demand, you are in the right place.

In this beginner’s guide, I am going to cover how you can start a hair extension business, including step by step information on how to set up your business, source and evaluate suppliers, market your business, and much more.

I’ll also cover some important introductory info, including what a hair extension business is, how much it costs to start, and how much you can reasonably expect to make doing this.

We’ve got a lot to cover, so let’s get into it!

This post may contain affiliate links. If you click on a link and complete a transaction, I may make a small commission at no extra cost to you. 

The information contained in this post is for informational purposes only.  It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice.  You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.

What Is a Hair Extension Business?

A hair extension business is a business that sells hair extensions (but may also offer wigs and other hair pieces) for aesthetic or medical purposes. These businesses may sell human hair, synthetic hair or both. Some operate through a physical storefront, but in many cases, they will be run online due to lower starting costs and ease of operation.

How Much Does It Cost to Start a Hair Extension Business?

If you operate your hair extension business through a dropshipping model, you starting costs will be modest because you will not need to purchase inventory in advance. In that case, you are looking at maybe a few hundred dollars to pay for set up costs, fees to the dropshipping company, and so on.

If you are going to be purchasing inventory in advance and storing it, your initial costs will obviously be higher. Depending on how much you buy, where you will store the inventory, and other factors, your starting cost can be thousands of dollars.

Of course, if you are going to be opening a physical storefront, you costs will escalate exponentially.

How Much Does a Hair Extension Business Make?

On average, human hair extensions can sell for between $80-$120 on Amazon, while synthetic hair extensions sell for between $15-$25. If you are able to purchase extensions at wholesale prices, you can make a tidy profit. Check out wholesale sites like Alibaba.com to get a sense of what human hair extensions and synthetic hair extensions sell for.

When I looked, I found that they were drastically cheaper than retail prices, so there seems to be plenty of profit margin built in.

How Do I Start a Hair Extension Business?

1.   Learn Everything About Hair Trends and Hair Extensions

Like with most things in life, knowledge is power.

If you have no idea what hairstyles are trending or declining and are not keeping pace with the overall hair extension market, you are going to be at a severe disadvantage when it comes to starting a successful hair extension business.

So immerse yourself in this market. Watch YouTube videos, follow influencers, join online forums (Facebook or otherwise) and generally keep abreast of beauty trends and hair trends in particular.

Remember, this is not a hobby – it’s a going to be a business and you have to treat it like one. That doesn’t mean that you can’t enjoy this phase of the process. If you have an interest in this anyway, you will naturally be gravitating toward learning more. And there are fewer things in business that are more exciting than uncovering a hidden opportunity during your research that no one else has really discovered.

What I have learned during my years of starting multiple businesses is that putting in this extra effort to dig deep and become an expert always pays dividends.

Now, you don’t have to take a formal course or spend a lot of money becoming a licensed beautician or hair stylist. The internet is a tremendous equalizer and you can absolutely learn enough online about styles, trends, and market direction to successfully start a hair extension line without that sort of formal training.

In short, don’t short change yourself and your chances for success – immerse yourself in the industry and learn everything you can.

2.   Choose Your Target Market

Choosing your target market before you start the business is crucial. Part of identifying your target market includes research. As we’ve touched on already, you need to explore the demographics of your market, understand what’s trending, and select your target audience accordingly.

Choosing the target market will also make it easier for you to choose what products you’ll release. In addition, you’ll have a clearer overall view of the customers you want coming in.

If you need inspiration, check out what the competitors in your space are doing. Is there an obvious gap that you can exploit? Can a slightly more niche approach work? This is an important step, so make sure you take the time to get it right.

3.   Select Your Business Model

Dropshipping

Dropshipping is a popular method for fulfilling hair extension orders. Basically, you have the manufacturer or supplier handle the shipping of orders as they come in. You don’t have to buy product in advance and it’s fairly low risk because of that. You only pay for orders that customers actually place.

I also like the passive income that you can enjoy with this type of business model.

There are plenty of hair extension dropshippers out there, but one company you can check out is privatelabelextensions.com.

They are a U.S. based hair extension dropshipper that allows you to “private label” your hair extensions so that your customers will see your branding on the hair extensions they buy. They will not even need to know that the actual extensions were supplied by your dropshipper.

They do charge a fee, but you get access to wholesale pricing and the convenience offered through a dropshipping arrangement. But I certainly encourage you to shop around – there may be other dropshipping companies that are a better fit for you.

Store and Ship Supplies Yourself

If you prefer a more hands on approach, you can choose to order supplies yourself and have them shipped to you directly. If you want fairly low cost hair extensions, check out overseas wholesale suppliers like Alibaba.

You will need a place to store the hair extensions and will need to ship them out to your customers yourself, but if you want to retain a bit more control around the customer experience, you can adopt this business model instead of dropshipping.

One advantage of this approach is that you get to see and evaluate the quality of each extension before it gets sent out and know that delivery is being handled responsibly and promptly.

It will definitely be more work intensive, but may be worth it if you desire that extra level of quality control.

4. Create a Business Plan For Your Hair Extension Business

A business plan is essentially a roadmap for your business.  

It organizes your thoughts relating to your business into an actionable plan. Some things to include in your hair extension business plan are budgeting, identifying your target market and competition, marketing strategy, pricing strategy, operational plans, and growth projections.

Don’t stress too much about getting your business plan perfect. I would use it more as an organizational tool at this point. You can polish it up later if you need to. 

Another benefit of having a business plan is that it can help you raise money from banks and investors (if your hair extension business has high starting costs, you may need to get some financing right away).  This is when you will need to refine your business plan – these folks will want to see a professional-looking business plan as part of their lending or investing process.   

Don’t know how to get started? The Small Business Administration has a great tool to help you write your business plan.

5. Find Your Competitive Advantage

There’s nothing special about offering the same service as everyone else. Instead, you need to have the leverage to get more customers, especially since you won’t start as a large business, so you may not be able to offer the same discounts that big businesses offer because they buy in bulk.

You can choose a customization option to be your competitive edge. Or, you can offer home visits or any other service that makes the process easier for your customers.

Choosing this edge before starting will help you get a full view of your business before it starts.

6. Set Up Your Business

  • Set Up Your Business Entity. If you want to get some basic liability protection for assets held outside your hair extension business you may want to consider forming an LLC, Corporation, etc.
  • Pick a Name and Logo For Your Hair Extension Business. Look at Shopify for Name Ideas and Canva to design a logo)
  • Create a Basic Business Profile and Get Your Business on Google My Business. Check out these free resources From Google to get started. Basic free business profile website and intro to getting on Google My Business.
  • Get Appropriate Licenses, Permits and Insurance. You’ll want to check federal, state, and local laws around what is required for your type of business and obtain necessary licenses. In many cases you may simply need a general business license from your state. You will also want to get appropriate insurance for your hair extension business to protect against lawsuits and other liabilities.

7. Develop a Winning Marketing Strategy

This is perhaps one of the most important steps to building a successful hair extension business. If you don’t have customers buying your product, what’s the point?

But finding the right marketing strategy is tricky. It’s going to depend on the type of business you are running. If you are dropshipping, your marketing strategy will be much more focused on getting customer via online channels. That includes getting a great website, and fully leveraging online lead generation strategies, including paid ads, search traffic, social media traffic, and so on.

You will also want to open an online storefront to help you manage your dropshipping business.

If you are operating out of a physical location, the marketing strategy is going to shift.

First, you will need to find a location that is going to generate walk in customers. High visibility from roads and high foot traffic are important here. Secondly, you will still want to online visibility for your business so that people searching for local hair extension retailers can find you. So make sure you get on Google My Business (now known as Google Business Profile).

Now, what’s left? To actually start the business!

8.   Release Your Products

You’ve come a long way! Now is the time to release your products and name them.

Hair extensions are usually categorized depending on their material, length, and texture. However, some sellers also categorize them according to their style.

You can choose to list them in any way you like, but remember to be savvy when choosing your first products. First impressions count, so make sure you categorize and offer your products in a way that resonate with your customers.

9. Never Stop Improving

As I just mentioned, you should try your best to make a great first impression with your customers, but you will inevitably make some mistakes along the way. Maybe your customer base didn’t turn out to be the right one. Maybe your product offerings were a bit off. Perhaps your marketing strategy is not gaining traction.

Don’t get discouraged. Find out what you did wrong and try to tweak it so that it works. A lot of business success boils down to trial and error. So keep trying and find the strategy or niche that ultimately works for you.

Final Thoughts

Now that you know how to start a hair extension business, all that’s left is to actually start.

It may seem overwhelming initially, but the process gets easier as you go on. The road will be paved for you if you know who you’re targeting and what products you want to offer.