Major wig manufacturers are informing retailers this week that wig costs are about to rise for a variety of reasons. Reasons such as rising costs of production and transport, devaluation of the American dollar, economic changes in Asia and increased global demand are cited as leading causes for the price increases.
Increased labor costs in Asian countries, where many wigs and hairpieces are manufactured are partially to blame, along with the devaluation of the American Dollar. The endless supply of cheap labor in China and India, which helped flood the world market with inexpensive goods, is starting to dry up, said Diane Swonk, chief economist at Mesirow Financial. China’s Yuan has been steadily appreciating against the Dollar at a rate of just less than 7% for the year. Faster appreciation in the Yuan is likely to help offset inflationary pressures from a weaker Dollar and rising global commodity prices.
Petroleum, which has been hovering just under $100 a barrel, is also partially to blame for increased costs in the wig industry. Aside from the petroleum used to transport the goods, it is also a major ingredient in the synthetic fibers which are used in the manufacture of many wigs and hairpieces.
Human hair wig and hairpiece prices are also rising, primarily because of an increased global demand driven by a greater acceptance and availability of human hair extensions on the market today. Human hair is considered a commodity and the cost of raw human hair fluctuates as all commodities do through a direct relationship with supply and demand.
On the brighter side, at least for retailers, is the news that human hair products and alternative hair are gaining greater acceptance in the general public. Higher demand translates into higher prices and generates higher revenue at the retail level.