As a salon or spa owner, your inventory is one of the biggest assets to your business. However, too much or too little stock and improper budgeting can result in issues such as lost profits, loss of opportunity to sell more product, and a waste of capital.
Stock Level Quantities
While managing your inventory is sometimes overlooked, you can maximize profits by properly maintaining accurate model quantities of your inventory. So, how frequently should you order product for optimal stock levels? Consider the following questions:
- Does your distributor require a minimum order amount?
- How much do you pay for shipping?
- Do you have a stock room?
- Do you have help unpacking orders?
Deciding upon the best purchase quantity may be intimidating, and you may be asking yourself, “Are we ordering too many? Too few? How often are we selling this product?” After you have a better idea of these four questions, leverage your software to help you determine the ideal ordering schedule. Your salon or spa software should have the tools to track your inventory trends to make increasingly informed decisions on how much to purchase each time you order.
Inventory Budgeting
Creating a budget for purchasing will ensure that you stay on track. By running the MR080: Register Summary report in Millennium or Meevo 2, you can obtain the information needed to complete the fields below.
Remember, this is just a recommendation to help you get started. Make sure to create a budget outline that makes the most sense for your business needs.
Based on years of industry research, we recommend that your professional supply budget be 5% of your service sales and your retail budget 50- 52% of all retail sales. Use the handy dandy calculator below to discover your budget!
Keep in mind, successful inventory management is about adapting. Understanding how much product is utilized in each service will allow you to better gauge where your prices should be for certain services, employees, and/or clients (think: thick long-haired clients who use 3x more product). Monitoring your sales versus product usage is essential in inventory management. Furthermore, preparing for high-volume retail seasons like the holidays will help you stay on track with your stock levels.
