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The Ugly Side Of the Beauty Supply Market

Study: About 9,800 beauty supply business nationwide; but only 300 black-owned.

Frank Mohadou closed the door to the beauty supply business he was struggling to keep, in the slice of space he obtained from his sister.

The still night held no comfort for the African native as he slid behind the wheel of the $250-a-month car he could barely afford.

He ignored the thought of going home; knowing soon he would have to find another place to live since the people he was staying with were drifting apart.

Instead, he sat; his anxiety and frustration combed into a manageable silence as he contemplated ways to grow his business. Just then, a Korean-American stepped up through his thoughts and across his path to stop at his storefront.

They often waited until he was gone to peek inside his store, Mohadou said. He knew he was an outsider. He didn’t speak their language. But he was trying to break into their world – a billion dollar market that primarily services black hair.

For almost 50 years, the Korean-American community has dominated the black beauty supply market by opening large stores, buying out smaller black-owned ones and using the faces of black celebrities on their products and black employees in their stores to grow their businesses in the black community.

Mohadou—who declined to speak further with a Cascade Patch reporter after an initial interview, citing a fear of retaliation—said “The little thing I was doing, they were trying to stop me,” said Mohadou, then a father of two with another child on the way. “There is no way back. I was able to learn English and put a little business together. I can’t quit.”

Mohadou didn’t know it, but things were about to get worse.

The Ugly Side of Beauty

Mohadou left the Ivory Coast in 1997 with the intention of going to school in America and then returning home. But his plans changed.

He learned English through a church group in New York before leaving to attend Georgia State University where he earned degrees in chemistry and finance.

He was unemployed the day he walked into his sister’s braiding salon and discovered a pack of human hair cost $80. Professionals got it for $50.

“I just got laid off, so I said let me find out where the hair came from,” Mohadou said.

What he discovered was a closed market.

Between manufacturing, distributing and selling hair care products, Korean-American entrepreneurs appeared to control all major components of the beauty supply business, he found.

He learned there were four central distributors serving a large portion of the beauty supply stores in the country, all Korean-owned. Aron Ranen,who produced a documentary in 2006 on the beauty supply business, reported that these distributors only worked with other Koreans in order to dominate the market.

Devin Robinson, owner of Atlanta’s Beauty Supply Institute, said about 9,800 beauty supply business existed nationwide; but only a little more than 300 were black-owned.

“The Koreans strategically make it harder for us to get into the business. They have the supplies the customers want,” Robinson said. “They sell it to us at higher prices or they deliver the products late to the black-owned stores. Sometimes they don’t allow orders from us at all.”

Beauty Masters is one of the larger Korean-owned beauty supply stores with seven locations in Atlanta.

Lucien Poko, general manager for Beauty Masters, said 90 to 95 percent of the stores’ customers are black; and so are the store’s employees.

He balks at the idea that Koreans dominate the market.

“It’s just business," said Poko, who is from Senegal. "Everybody is free to open what they want to open. It’s the way you handle your business. Koreans dominating the business, this doesn’t make sense. You can open up your business. You are free to do what you want.”

Making the Cut

Mohadou couldn’t find anyone to sell to him when he first started more than eight years ago. Then he met an American-born Korean distributor in New York who would sell him hair at $14 a pack.

Mohadou traveled by MARTA to deliver the hair door-to-door to his customers. After a while, he established a trust with the owner who increased his orders, decreased his price and sold him hair on credit.

Still, his customers had a preference. They wanted the name brands; the Korean brands. And there were about 25 to 30 of them.

Many beauty salons said they often go to the Korean stores because they can’t find what they need at the black-owned stores.

That's because they can't get the supplies, Ranen and Robinson said.

Mohadou found out that Koreans were getting their hair from Jinny United. But a Jinny representative refused to sell him hair.

“’You can’t be within 5 miles of one of our customers,’” she told him.

Mohadou wasn’t convinced.

When he found several Korean stores less than 5 miles apart from each other, he threatened to sue and attempted to get other black owners to join him.

They recoiled at the idea.

Mohadou went back to Jinny. This time, he spoke to another representative who allowed him to place an order.

Then Mohadou went to a Korean store to sell the hair. When the woman told him to wait a moment, Mohadou thought she was off discussing the price.

But then the woman returned.

“Where did you get the hair? Who sold it to you?”

Mohadou froze, puzzled.

“We all worked together to make this hair, so I know you stole it?”

Mohadou then realized: “I was a little black boy trying to sell hair to Koreans. That was not possible.”

He handed the woman a business card and left.

He obtained the space in his sister’s salon and started selling the hair. Now, Koreans were popping up at his store front, hoping to find out where he got the hair.

He later discovered that someone complained to Jinny that he was selling the hair at gas stations.

Mohadou never got a chance to defend himself.

When he returned to Jinny, the representative who thought he was working for a Korean store when she allowed him to place his orders, would no longer sell to him.

Then the New York distributor, who he now called brother and to whom he often sent presents, told Mohadou he was leaving the business.

Mohadou had seen it happen before. Another Black owner had to close her store when her contact went out of business. And still, many others closed because they weren’t able to buy quality hair, he said.

“It’s a very ugly business,” Mohadou said.

Making It Grow

About six years earlier, Jinny United also refused to do business with for the same reason, Owner Robbie Conwell said.

A manager with Jinny United declined to comment on their policies in selling to beauty supply stores.

Poko with Beauty Masters said he has never had any problem getting supplies from Jinny.

“They have their own rules. I don’t know what their rule is, but I don’t have any problem with them,” Poko said.

The Korean president of the Georgia Beauty Supply Association said through an interpreter he didn’t know anything about the issue. The 12-year-old association has 50 members who are all Koreans.

When Jinny turned down Conwell, she found an Indian company that would sell her human hair. She urged other black owners to find a different path.

“They have to do something different,” Conwell said. “Show (the customers) something the Koreans don’t have.

“The biggest money is in hair. They are not going to succeed if they don’t make contacts the Koreans don’t have.”

Robinson said Korean stores dominated the business because they do better at business than Black owners.

“They do better as a group. They live together. They live their lives frugally and they are committed to long and intense labor, which is necessary for success.”

And, there was one other reason: “We give power to the owners instead of power to the customers,” Robinson said.

As a result, “There are 96 percent Black customers and only 3 percent black owners," he said.

They find the Koreans’ control intimidating, he said.

If Mohadou was intimidated by their control, he didn’t let that stop him. And eventually, he found a way inside the network.

His New York contact didn’t forget about his loyal customer who relied so heavily on him; who often asked about his family and had befriended his girlfriend. He had another contact for Mohadou.

 “How much money do you have?” he asked Mohadou.

Mohadou had $7,000. It wasn’t enough. His contact told him to get more money and don’t worry about the $900 he owed him.

Mohadou started Sou-sou, an informal savings plan popular in the Caribbean, to raise more money. He asked 12 people, including his sister, to provide $1,000 a month with each person collecting $12,000 monthly. His sister gave him her share and Mohadou was able to send the $24,000. Normally, it took about $400,000 to open an account, Mohadou said.

A week later, a sales representative confirmed the receipt of the money. They would work with him. But he had to create his own line.

“They couldn’t sell me the same brand name. So I had to think of a name, find a picture, come up with my own graphics and design.”

Mohadou, who went on to open on Lee Street with the help of two partners, designed African Poney, Compassion and Carmen.

But not many customers were willing to take a risk on an unfamiliar brand. He sold his first brand for $40 a pack and gave away the second pack.

“I had to work on the hair for a year before I made a profit,” he said.

Then, Mohadou saw a change.

“People would come to the store, sit and wait or they would come back,” Mohadou said. Some drove from as far away as Marietta. They wanted to support the Black-owned business.

 When a woman in Conyers wanted to drive to the store, Mohadou drew the line. She would be spending more in gas than on the product, he said. Still, Mohadou was touched by the support.

“I wish things work well so I can come back and help,” Mohadou said.

Beauty Supply May 18, 2011 at 01:02 PM
Beauty Supply Institute Ph: 202-684-6699 www.beautysupplyinstitute.com "Getting You in Business, Keeping You in Business"
Fred Malone May 18, 2011 at 10:15 PM
WOW wish I knew of this man and his product I would glady educate my clients and support black business as i do with ALL in ONE and Caris company. 2 asian business's have opened in the plaza i work in on Cascade and 99% of its patrons are African Americans. During build out of these business's not 1 person of any other race worked inside thier establishments down to the security system installed. constuction people were asian. Once the business opened they have young black women at the counter. We have to learn the power of the black dollar, not so much as a soda is bought in our community with profits that are made. I have worked in the beauty industry more than 20 years and will be over joyed when we stop buying over priced commecial hair from those who dont want us to make profit from it but instead buy it. Where can we start what can we do? It is up to us to educate ourselves and stop consuming and stop promoting these business's.
Kimathi Lewis May 19, 2011 at 02:09 AM
The Beauty Supply Institute has helped entrepreneurs open about 50 black-owned beauty supply businesses since it started about six years ago.
Kimathi Lewis May 19, 2011 at 02:15 AM
It does help to shop at the black-owned stores and entrepreneurs can get some of their supplies from a black-owned distribution company in N.C. It may be the only one - TWT Distributing in Charlotte, NC.
Sue Bigby May 19, 2011 at 04:10 PM
My cousin opened a salon on Campbellton Road years ago. He realized immediately that he was spending too much for chemicals and other supplies. He suggested that other black salon owners in the area form their own supply line. He found it impossible to break into the market which then, as now, was controlled by Koreans. A few brands were available by direct orders to salesmen but Koreans tried to undermine these salon-only products by stocking them illegally in their stores. The policing of the product created terrible hardships for the salesmen and they gradually gave up. I don't know what can be done to level the playing field for the black haircare market. Are there any black-owned stores in Atlanta?
Pamela Hollinshead May 19, 2011 at 05:34 PM
This is so disappointing! How is it that we allow Koreans to come into our neighborhood and sell to us and not put anything back into our neighborhood. We need to support the black owned hair cair businesses and boycott the Korean businesses. Here's and idea, let's make it so that the Koreans have to sell to the black owned businesses in order to stay in business. Or let's take them out of the equation all together!
Betty Byrd May 19, 2011 at 05:40 PM
How one beats and supercedes their competition is by having stellar customer service. At 99% of the stores there is a written and unwritten policy of no refunds or exchanges even if the products are defective. As a community we accept this as the norm even when we will not accept this from other businesses that we frequent. If we pay top dollar for weaving hair and it is defective or inferior we know that it cannot be returned even if we show them immediately what the product is doing. Is that right? No it is not and we have to stop accepting this as the norm. Remember Kmart thought it had the market cornered and look what happened, Walmart popped up and stole their thunder.
Kimathi Lewis May 19, 2011 at 07:42 PM
Yes. You can contact the Beauty Supply Institute, which has been keeping track of the black-owned stores as well as black-owned products.
Kimathi Lewis May 19, 2011 at 07:46 PM
Often, it seems that many customers turn to the Korean stores because they can't find what they need at the black-owned stores. One way to get a hold in the market is forBlacks to support a black-owned distribution company as well as come together and form their own big enough to meet the demands of the consumers.
Kimathi Lewis May 19, 2011 at 07:53 PM
I agree that Stellar customer service is a key. No one wants to frequent a store that is not professional and the service unfair.
GOLDIE May 20, 2011 at 02:21 PM
That's the problem with Black folks we don't stick together like the Asians. We get no support from no one not even ourselves we would prefer to give our money to those that don't live in our neighborhoods nor do they shop in our neighborhoods the only thing they do is set up shops in our neighborhoods and what do we do but support them. Wake up Black People this makes no sense we need to stop supporting those that show black communities no love and no respect. Stop buying weaves and wigs and love your inner black beauty go natural grow so dreads and stop supporting those people because at the end of the day black folks are not getting rich off of those products the Asians are. (GOLDIE)
Jamie Cox May 20, 2011 at 04:16 PM
Kimathi, This is an EXCELLENT story! I was reading of a black beauty supply distributor who called for a boycott of the stores in our neighborhoods because of unfair business practices and downright racism. I hope more black distributors are able to find an inroads into the business.
Kimathi Lewis May 22, 2011 at 12:49 AM
Thanks Jamie. So do I.
Kimathi Lewis May 22, 2011 at 12:52 AM
I agree. The owner of All-n-1 mentioned an attempt to bring Black owners together but that failed because of lack of committment.
jackson May 24, 2011 at 02:21 PM
Its not a problem of sticking together. The issue is common sense.
jackson May 24, 2011 at 02:28 PM
How is it that you let Koreans, tell you what to do, but will not tell yourself how to sustain a life. Get some common sense and things will work out.
Janita Poe May 24, 2011 at 03:49 PM
Thanks to everyone who has shared their view about this sensitive topic. I personally do not blame the Korean-American community for seizing on a prime business opportunity. I believe it was there for us first and we didn't take advantage of it, as we should have. I definitely believe people need to network and support each other in a community; as a former gift shop owner I learned, first hand, that the African-American community, generally, does not do a good job of that.
David Good May 24, 2011 at 06:30 PM
I believe this is the only way to dominate a market that we support the most. Support those companies that are black owned and those individuals that have the wealth, support an up and coming person that seriously wants to get into the market. We know it is possible. At one time, the black community was buying 90% of the urban clothing but represented only 1% of the owners (Karl Kani) Now look, every major store you go in, you see clothes and now suits designed by black Owned companies. The freshiest american cars like the Charger and #00 are designed by black designers. it all is possible . When you look back just 10 years, no one would have thought we would have a black President, two superbowl winning black coaches, the most recognizable stars of golf and tennis are black, the head of the RNC was a black man; 4 Networks being black owned and the list does on and on.
Tia May 27, 2011 at 02:59 PM
Yes we have to support each other and work together, but unfortunately the black culture no longer embraces that mentality. Asians do it, Mexicans do it. Community support was the backbone of our success. With that being said. I was told about ABBS a beauty supply store downtown and someone said it was black owned. I was super excited. I believe in and I know the power of the black dollar (Just recently I found a nail shop! a nail shop that is black owned on Camp Creek Pkwy!Wow). So I went to Abbs on my lunch break and I was met with this: No greeting, an employee with a baseball cap pulled over her face draped over the counter on the phone. I am not a needy customer..so I began to look around, check out the prices and products. Still no hello..no may I help you?and the employee was still on the phone. So I turned my super excited butt around and, I will go to Jin's on Peachtree or Chappel Beauty on Candler! Where hello is not optional and they don't follow you around:-) If ABBS is not actually black owned then great no problem about not going back there. I will still support, spend, and seek out black owned businesses, but if it is black owned... here is what they let walk out the door because they didn't acknowledge the power of my black dollar..On an average Iam spending 100.00 depending on what Im buying-BESIDES THAT I WORK FOR FULTON COUNTY!!! AND I WOULD LITERALLY SPEAK TO ABOUT 20 BLACK WOMEN ON MY WAY BACK TO WORK THAT I WOULD HAVE TOLD ABOUT THEIR STORE!
Janita Poe May 27, 2011 at 04:19 PM
Hi Tia, I have had the same experience in some of our businesses, too, unfortunately. Even when using mainstream businesses with young African-Americans in service roles I often received very poor customer service. What comes to mind, more than anything, are all the fast-food businesses, except for Chik Fil-A where they clearly have an outstanding training program that requires employees to treat customers with a certain degree of respect. I can't sugar-coat it; I think we have a long way to go when it comes to understanding the value of entrepreneurship and what you have to put in (as individual owners and as a community) to get something out, in the long run.
lamar June 12, 2011 at 07:19 PM
It would not be so much of struggle for a black entrepreneur to succeed if they are persistent and they live their lives frugally and are committed to long and intense labor. Frank is an example to follow and show in the community to learn from him.
Kimathi Lewis June 13, 2011 at 12:42 PM
I agree. He was persistent, and though sometimes he became overwhelmed as many struggling entrepreneurs do, he didn't give up. Thank you for sharing.
errol crockett October 04, 2011 at 08:04 PM
The easiest way to compete with Asians in the Beauty market is to develope your own brands, sell them, and be resposible for your own distribution. STOP TRYING TO SELL EVERYTHING THEY SELL!
Ruth April 12, 2012 at 07:01 PM
Why is a racial discrimination law suit (class action) not pursued?
Vickie January 10, 2013 at 03:23 AM
I too wanted an opportunity to sell hair with similar results. Fortunately a new company was established in 2012 realized the struggles many are having getting started in this business as well as the difficulty investing tons of money to start and maintain. I'm now a a distributor with them looking for others who want to purchase quality hair at wholesale, plus the company offers a warranty with hair purchases!!! Get more info at www.HairWeaveBusiness.com
Gordon Rivers July 27, 2013 at 09:09 PM
The products in question come in quantity mostly from China and Indonesia. NOT Korea. If anyone wishes to establish relationships there, contact gordon@pacificbridgepartners.com I am based in Virginia bu make regular visits to Asia. FYI I would take a % commission from whats imported but can help anyone get their own supply chain if they are funded and dedicated...
Gordon Rivers July 27, 2013 at 09:13 PM
One further comment. I noted someone discussing discrimination suits. As Koreans who are US citizens qualify as "minority or diversity business owners" I don't think anyone of any race/gender will have much luck. Going around the US based wholesalers is the Key.
Stefan Bland August 24, 2013 at 09:21 PM
my name is david i would like some help i'm trying to start a hair Distributing company here in Raleigh N.C
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