It’s the ultimate balancing act. You never want to run out of a product, but you don’t want to purchase so much that products are gathering dust on your shelves or in the dispensary. Three experts, a salon owner, president of a product manufacturer and a distributor marketing director, share how to get the numbers right. Read perspectives from Dawn Marie Walstrom, Jim DeBerry and Kim McMurphy on:

“What is the key to Salon Inventory Management”.

Perspectives: Salon Inventory ManagementDawn Marie
Walstrom


Owner of Finesse
Spa/Salon

Des Moines, IA


I HAVE TWO partners
in the salon. I maintain
the retail inventory and
my partners handle the professional inventory,
but, of course we work together and all know
how each inventory segment is maintained.


All of our inventory is ordered on a weekly
basis, which we find helps control costs and
allows us to make changes faster and more efficiently. Our SKUs and amounts can change
each week when we factor in higher or lower
demands that we have experienced on certain
items, seasonal changes in our product mix or
items we have decided to discontinue. In the
retail department, if we find ourselves with too
much inventory or with items we are thinking
of discontinuing because of poor sales, we try
to move product quickly with special pricing. I
begin with a 50-percent markdown and will go
to 75 percent. We also have items that we can
return to our distributor partner if it is something
new that we haven’t carried before. That
is a last resort scenario. We try to recoup our
money as quickly as possible.


We maintain a two-percent inventory investment
budget that we can play with to take on new
product lines or to reload on regular inventory.
Unfortunately, we do experience occasional
theft in the salon. It doesn’t happen often, but
the staff has been trained to stay aware of the
situation. Many of our best inventory anti-theft
solutions have come from our staff members.


Our salon has a leadership board that
meets monthly to coach and mentor staff
members. Through this program, we keep
everyone informed about principles of good
inventory management and the importance
of retail sales.

Perspectives: Salon Inventory ManagementJim DeBerry

President of Eufora International


EFFECTIVE INVENTORY management
at all levels is a function of having good
and timely information, good forecasting
and planning.


The “less is more” philosophy does play
a big role in successful salon inventory management
since most independent salons don’t
have the resources to maintain a large back
up of supplies and multiple labels. I always
recommend keeping a good “cushion” of inventory
on top sellers. Most clients are in the
salon every six to eight weeks, so chances are
if you are out of stock on something a client
wants to purchase during a visit, you will
lose the sale. Having a good stock of what
you know are your most popular items will
hedge against losing that sale.


I believe that one of the most critical aspects
of maintaining the right inventory and
sales turns is stylist education. The more stylists
know and understand about the products
they use, the more comfortable they will be
selling these products to their clients. It is
important to commit to product lines that offer
education. At Eufora, we provide extensive
product knowledge and training classes and
offer ongoing salon and stylist support.

Perspectives: Salon Inventory ManagementKim
McMurphy


Director of
Marketing, Peel’s
Salon Services


I HAVE FOUND there
are three key factors
when it comes to inventory
management.


Know your clients: What your client
wants, and what you think she wants are
often two different things. Sometimes you
just have to ask your clients and ask yourself
if you are being product- or market-focused.
Being market-focused can reduce the worry
over slow moving or excess inventory. I tell
salon owners and stylists that it’s not about
their favorite products; it’s about what your
clientele wants and is willing to pay for.


That’s the best way to ensure your supply
matches your demand.


Create a marketing plan: Marketing plans
will help the entire salon team focus on selling
through on special promotions, seasonal
items and new products. About 80 percent
of the salon’s product sales come from 20
percent of the products available on a daily
basis. Keep this in mind to avoid being overstocked
with excess inventory. Keeping your
staff motivated with clear expectations helps
them move products into the clients’ hands.


Develop a tracking system: Tracking the
performance of each product and promotion
will help you determine what products are
your best and lowest sellers and what are
your most successful promotions. This, in
turn helps you determine how much inventory
to have on hand and how to create an
appropriate marketing plan. Whether you use
a manual system, or inventory management
software, taking time to track what sells and
what doesn’t will help you control your salon’s
inventory.