Perspectives: Salon Inventory Management
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".
Dawn 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.
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.
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.