2 Secret Little Black Market Facilitators

I wear a black market on my fingers. Last Thursday my friend, Carly^[1], and I had our weekly ritual of painting nails. Every few weeks, Carly gives me a manicure with her plethora of colors, glitter, and designs. She recently mentioned to me doing nails is a hobby she developed in middle school, and over the years both her skills and resources expanded. Carly’s expansion led to her giving manicures to her mom, friends, and women in her neighborhood. She charges significantly less than nail salons, so now I am a new loyal customer to her business. While doing my nails, Carly confessed that she uses illicitly sold materials to give salon-quality manicures, such as polish, special lights, and metal tools that come from a cosmetics store in downtown Indianapolis. She travels far from her home in a different town to this store because they sell to anyone salon-quality nail products that are supposed to only be purchased by those with a special license. What begins with an unlicensed sale of nail products leads to and perpetuates a greater cosmetics black market that touches my life, and this market has many intertwinings around the world. The cosmetics black market facilitates Carly’s smaller black market and prompts my analysis of hidden successful illicit business owners: children.

To begin, Carly is unable to operate her nail salon without the greater cosmetics black market, and understanding this market is crucial to discuss Carly’s smaller black market that touches my life. Tracking the cosmetics black market I participate in begins here, in Bloomington, Indiana. More precisely, in my friend’s bedroom. Under Carly’s bed, there are all the materials one can find at their local nail shop. Specifically, there is a wooden fold-out table, a motorized nail file with different adjustments, a manicure blue light, nail clippers, scissors, tweezers, and other tools cleanly organized in a small black container. Carly has glitter, stickers, jewels, glue, and little paintbrushes made especially for her tiny canvases. Most importantly, Carly has a giant bag with little compartments, each taken up by different illicitly purchased nail polish colors. Carly’s ownership of these illegally purchased polishes places her in a greater cosmetics black market.

What makes the transaction of Carly’s nail materials illicit? These polishes are not ones that are simply purchased at CVS or Ulta Beauty. Rather, they are only sold to individuals who graduated from cosmetology school and earned a license proving they are a certified nail technician. It is important that cosmetics purchasers are licensed because nail products contain chemical substances that are harmful if used incorrectly. In order to receive a cosmetology license and become a nail tech, one has to go through approximately 450 hours of classes. Either in person or online, the purpose of nail technician classes is to make sure individuals use materials essential to their careers correctly and responsibly (Aveda). Nail technicians work with potentially dangerous substances. For example, Harvard Health published that chemicals such as nitrocellulose, toluene, and Stearalkonium hectorite are all found in nail products. One thing these three chemicals have in common is they have had trouble gaining and maintaining FDA approval. Using these products incorrectly can cause “major harm… even death” to an individual (Nassim). Therefore, It is obvious why having the proper training and license is necessary to purchase specific nail materials, and why materials are sold in special stores, like the one Carly visits. However, the nail shop Carly visits does not require purchasers to show their license. Carly had these materials since she was a sophomore in high school so she obviously did not complete the prerequisites to purchase polish of this quality. Therefore, When Carly goes to the nail shop and buys what she needs without showing a cosmetology license, it is equivalent to a minor buying a pack of beer without getting carded.

This illicit exchange of goods brings us to the place Carly’s business depends on- the cosmetics shop. I asked Carly exactly where she purchases her professional materials. “I have no idea what it is called,” she responds. “All I know is that it is in a rough area and the windows are covered with paper, I have never noticed a sign in front or anything like that.” This store knows it is facilitating a black market. For example, Carly told me the store seems “intentionally hidden,” and no one would know what the building of the cosmetics store is used for unless they step foot inside. Carly explained how all of the windows are completely covered with paper, and before she walks in, she “can’t even see inside the store.” The cosmetics store displays all the stereotypes of a black market. It is hidden, sketchy, and visually secluded from the rest of society.

Determined to uncover this secret nail shop, I took to various maps apps, Google Earth, and Yelp.  After researching and speaking with Carly, we found Salon Supply is the cosmetics store she visits. Salon Supply facilitates a black market because it takes products that are manufactured for wholesale and then sold to licensed nail salons, but sells them individually like a normal retailer to anyone. The brands of materials Carly buys at Salon Supply such as DND polish, MX Tornado nail drills, and blue light-powered gel hardener are available for purchase only in bulk online. Specifically, high-quality products are sold on websites like TheNailSuperstore.com. Curious about where these products come from, I researched TheNailSuperstore.com. TheNailSuperstore.com provides all things manicure in large quantities, including the products that Carly purchases from Salon Supply and uses on me. On TheNailSuperstore.com, I clicked on a few items and found they shipped internationally from China, specifically the Guangdong province (Huynh). According to Cosmetics Bridge, an Asian online media source that provides news on the business side of the cosmetic industry, Guangdong is the largest cosmetics manufacturing province in China. The site reports that “The total output value of Guangdong’s cosmetics industry ranks first in the country” (Cheung). The province is China’s economic powerhouse and attributes this success to its manufacturing industries. Therefore, the black market I unknowingly participate in connects me to the global economy seen through tracking illicitly sold goods from my bedroom to the nail shop, to online wholesalers, to manufacturers in China.

Carly’s participation in the global cosmetics black market creates a market within a market. She uses illegally purchased materials to create her own illicit business. Carly explained that after she perfected intricate designs and techniques, she was known for having cool nail polish and received many compliments from friends and peers. She boasted, “Even strangers would come up to [her] and ask where [she] got her nails done.” Carly used compliments as motivation to start her own business. She then began charging about 10 dollars for manicures, starting at age thirteen. Eventually, her small enterprise grew from school friends to teammates, to neighborhood mothers, to fellow college students, and now, me. Currently, Carly charges 20 dollars for a manicure and has “at least 20 regular customers” (Doe). Carly’s business’s growing success is impossible without high-quality products. Therefore, the cosmetics black market facilitates a market within a market because Carly uses illicit materials to provide a service and earn profit.

Carly’s nail business has many hallmarks of a black market. To begin, the materials are bought illegally without a cosmetology license. Then, Carly uses the illicit items to provide a service as an unlicensed minor. Also, her nail business is not regulated. Nail salons must keep up with specific health laws and regulations to maintain a clean and safe environment. If certain rules are broken salons can be shut down and nail technicians risk losing their licenses, and consequentially their careers. For example, The Occupational Safety and Health Administration (OSHA) publishes various rules licensed salon workers must abide by. Specifically, employees should wash their hands before and after performing on individuals, disinfect tools in between clients, replace any electrical items once cords show any sign of fray or tear, and work in a properly ventilated environment, especially when working with chemicals. Nail salons across the United States should follow these standards or they can lose their businesses (OSHA). Carly, contrarily, does not have to abide by these rules since she performs her business as an unlicensed minor. Also, Carly does not have to pay for costs to upkeep these rules such as cleaning supplies and replacement products when materials wear down. Therefore, Carly does not face the risk of losing her business if the rules are not followed, and her revenue covers fewer expenses to maintain health and safety regulations. These factors give Carly’s black market the upper hand. Licit nail salons receive the benefits of using high-quality materials at the expense of owners and employees attending nail tech school and abiding by the rules necessary to become a licensed cosmetologist. Since thirteen, Carly received the same benefits without costs. Therefore, Carly’s black market is an example of how children engage unknowingly in foul play and reap the benefits of a black market.

One other benefit of Carly’s nail business is her black market has no income regulation. For starters, Carly has more flexibility in setting prices as she pleases without the equal pressure licit businesses have to generate revenue to cover costs. After examining her collection of polishes, brushes, decorations, lights, and tools, I asked Carly how she could afford all her materials. DND gel nail polish costs about 15 dollars a bottle, and LED nail dryers upwards of 40 dollars. She told me that for Christmas and birthdays every year since high school, she receives new items to add to her nail collection. Carly does not pay for the raw materials used to provide a service and make money. Thus, her nail business produces revenue without expenses coming from her pocket. Therefore, her profit margins are immense. Also, Carly does not need to worry about breaking even because profit immediately generates. Nail salons pay for their own expenses, thus they have to set their costs at a relatively high price to generate profit. Contrarily, Carly does not pay for expenses therefore she sets her costs at a lower price than the average salon and still manages to generate a strong profit. Subsequently, Carly’s manicure rate attracts customers, like me, because we receive the same services for a significantly lower cost. The average gel manicure is about 45 dollars, and personally, I have gotten my nails done for high costs approaching 80 dollars. Carly does my nails for 20 dollars, and since coming to college I have not stepped foot in a nail salon. Carly’s low prices exemplify how black markets attract customers away from legal markets due to their competitive advantage of low costs. Therefore, Carly’s black market has the upper hand of lenient income regulation, unlike licit businesses.

Carly’s nail business opens the door to greater conversations about overlooked illicit businesses that constitute as black markets, even though these illicit businesses appear innocent. Black markets have strong stereotypes: they are sketchy, dangerous, or immoral. These stereotypes are visible in the illicit nail supply store Carly visits in Indianapolis and the greater cosmetics black market stretched throughout the world. A small business run by an eager child does not reflect these stereotypes, even though they technically constitute as illicit businesses. Though they appear innocent, child-run businesses are black markets.

One reason why child-run businesses are illicit is because they lack the permits required in the United States. Take for example, lemonade stands. When the weather warms, children set up tables and signs to sell cold drinks outside. Lemonade stands were my main source of income as a child, and every summer I looked forward to earning upwards of hundreds of dollars as a little street vendor. In the United States, licit street vendors are required to have a specific permit to sell products in public areas. Certain areas, depending on the state, do not allow any street vending at all regardless if sellers have a permit or not. These permits are obtained through an application process. This multi-step process includes, according to the Indiana government, registering the business’s name, checking federal requirements, maintaining tax records, and many other tasks (Indiana). Small businesses must go through this process if they plan on providing a service in a public area. Lemonade stands are small businesses that sell goods in public areas, yet I do not know one child who obtained a seller’s permit. There is a parallel between lemonade stands without permits and Carly’s nail business. As discussed earlier, cosmetic businesses require licenses too. For example, nail salons need an operating license to remain in business. Yet, Carly provides manicures without a permit or license of any kind. Therefore, these child-run businesses are illicit because they break vending and operating laws in the United States, and provide services without regulation.

Another example of how child businesses qualify as black markets is that they avoid taxation. Businesses are required to file taxes, and pay the full amount each period. If taxes are unpaid, business owners are subject to penalties and fines. In certain circumstances, avoiding taxes can lead to businesses being shut down and even jail time (Milikowsky). Black markets all across the globe do not have to pay taxes because they are illicit businesses, unregulated by the government. In a similar light, child-run businesses are not monitored or taxed by the government. Therefore, these businesses are a black market, because they provide a service without government regulation.

Lastly, child-owned businesses are successful black markets because they effectively attract customers. A unique upper hand kids have is their unintentional marketing advantage. The bottom line, kids are cute. Everyone wants to support a child who is passionate about a hobby, and we are inclined to help children with strong work ethics work towards reaching their goals. Personally, I would rather give my money to a cute child over a business because the transaction is more personal and fulfilling. Engaging in this transaction is rewarding, and therefore people are drawn towards child-run businesses due to the emotional aspect. Overall, kids unintentionally provide a unique sense of pathos while trying to attract customers, and therefore child-run businesses are successful hidden black markets.

Ultimately, the global cosmetics black market facilitates Carly’s black market and prompts my insight into adolescent black market owners. Child-run black markets even have advantages over other illicit businesses. Black market stereotypes and stereotypes regarding children led to child-run businesses’ success even though they are completely illegal according to laws and regulations. Law enforcement around the globe works to crack down on illicit business and manage the flow of black markets. For example, the DEA investigates and prosecutes those who illegally sell drugs in the United States, and works to crack down on the drug black market. Black market leaders are targeted and arrested for selling goods or providing products in an illicit way. However, children face no threat of being targeted or shut down by the government. I have never seen a lemonade stand busted by the police. Similarly, Carly told me she has never been questioned about her manicure business made possible by illegal materials. There is a role of naivete- children have no idea that their businesses are illegal; they are simply turning hobbies into profit. Therefore, children remain undetected and their businesses will continue to thrive, along with my beautiful manicures.

Works Cited

Aveda Fredric’s Institute. “Manicurist Program – Aveda Fredric’s Institute Indianapolis, IN.” Aveda Fredric’s Institute Indianapolis, https://avedafi.edu/indianapolis/manicurist-program.

Cheung, Maggie. “The Largest Cosmetics Manufacturing Province in China: Guangdong.” Cosmetic.News, COSMETIC.NEWS , 28 Sept. 2022, https://www.cosmetic.news/the-largest-cosmetics-manufacturing-province-in-china-guangdong/.

Google Maps, Google, https://www.google.com/maps.

Indiana, Vendors License in. “Vendors License in Indiana.” Vendors License in Indiana, 2000, https://www.businesslicenses.com/Licenses/List/IN/Vendors-License-42520/.

Huynh, Kevin. The Nail Superstore. “Wholesale Nail Supplies: Acrylic, Gel, Nail Polish, Nail Art & More.” The Nail SuperStore, Nail Superstore, https://www.nailsuperstore.com/.

Doe, Carly. Interview. Conducted by Grace Tibshrany. 30 Oct 2022.

Milikowsky, John. “4 Consequences of Unpaid Business Taxes.” Milikowsky Tax Law, 1 Dec. 2021, https://www.caltaxadviser.com/blog/2018/08/4-consequences-of-unpaid-business-taxes/.

Nassim, Janelle. “A Look at the Effects of Nail Polish on Nail Health and Safety.” Harvard Health, The President and Fellows of Harvard College, 21 Nov. 2019, https://www.health.harvard.edu/blog/a-look-at-the-effects-of-nail-polish-on-nail-health-and-safety-2019112118231.

OSHA. “Department of Labor Logo United Statesdepartment of Labor.” OSHA Publications | Occupational Safety and Health Administration, https://www.osha.gov/publications/.