What is Diversion and Should I Worry?

Lotion ShoppingBack in the day manufacturers in the US would create products for the US market at one price and then sell them cheaper to overseas distributors so that they could resell them in other countries and still make a profit. This worked well but eventually a few businesses figured out how to purchase products sent overseas at their discount and “divert” them back to the US in order to make larger profits or even offer products that weren’t yet available in the US market. Nowadays most things are already made overseas so you don’t hear much about that diversion any longer though it now takes other forms.

Lotion or Beauty product diversion is another thing entirely. This is an invention or manufacturers trying to control the distribution of their products, or rather trying to keep their products from being sold online, largely because of complaints from their traditional salon retailers. Salon’s assumed that if people could buy products a little cheaper online that they would lose sales, maybe all sales.

It didn’t take long after the internet became a place to sell products for every thing under the sun to end up for sale on the net. Tanning lotions and beauty products were no exception. Ironically many of the tanning lotion websites are started by salon owners looking to make a few extra bucks but some have grown into medium sized businesses on their own.

A small number of manufacturers went to great lengths to stop the online sales. One early retailer lost a lawsuit and had their inventory seized and websites confiscated. Others who lost suits had to take the products off or get out of the business. Most who were threatened simply didn’t have the resources to fight and went away on their own. Manufacturers also made their distributors sign huge contracts containing serious liabilities in order to keep them from working with anyone suspected of selling online. All of the suspects were put on blacklists. Websites have been created to scare people that products found online are counterfeit or filled with cheap lotion. In reality the complaints I have seen online have been about how fast the product arrived rather than the quality.

You might be asking yourself at this point why you can still find every brand online. The internet being what it is, where one fell a hundred more popped up. Today there are more retailers selling than ever before including sellers on sites such as Ebay and Amazon. Salons have been shrinking in numbers at the same time so manufacturers and distributors are finding it harder to turn away business. Who can stop the internet? Seems crazy to try today.

How does this effect you the buyer? You might have to pay a little less. Competition tends to drive prices down. You also might have to choose from a much larger selection. Really what you lose is the personal touch of someone who knows you and gives you good advice at a salon. On the other hand you can browse for hours and compare products for days before making a purchase.

Fighting diversion is really about protecting traditional brick and mortar retailers, small ones. Ironically after years of fighting diversion, your favorite brand may end up at your local drugstore anyway. It seems like you can find every major beauty products there now. It should not cause you concern, unless you dislike buying your favorite products at lower prices.