Effective salon inventory management means implementing a solid process that works to save you time and money.

What does that look like?

Simple tasks you can perform daily, weekly, and monthly that are easy enough to keep up consistently.

We understand the challenges, as juggling everything from retail merchandise to crucial back bar supplies, can be time-consuming.

Let’s go over how to maintain efficient salon inventory management.

The Basics of Salon Inventory Management

Getting a handle on the essentials and all those behind the scenes can make or break your success. You don’t want your salon to be held up by improper management of the essentials. 

First up, you’ve got to know your inventory types. There are three main categories:

1. Retail products (the stuff you sell)
2. Back bar items (what you use for services)
3. Cleaning supplies (to keep things sparkling!)

Each of these needs its own special attention.

One trick we’ve found super helpful is stock rotation. It’s all about using older products first to avoid waste. Try a first-in, first-out system—your wallet will thank you! 

Next, let’s talk about your suppliers. Building solid relationships with them is gold! Keep in touch regularly to stay in the loop about new products, deals, and any supply hiccups. Trust me, this connection will help you keep your shelves stocked and might even score you better prices. 

How often you order supplies can really impact your cash flow and storage needs. You risk tying up too much capital in stock, leading to reduced cash flow. Too infrequently, and you run the risk of running out of essentials, which could disappoint clients and disrupt services.

To strategize your ordering schedule:

• Assess Product Sell-through Rates: Take note of how quickly your products turn over. Fast-selling items may require more frequent ordering compared to those that linger on shelves.
• Track Seasonal Demand: Understand that customer preferences can shift with the seasons and stay ahead by adjusting orders accordingly.
• Evaluate Storage Capacities: Be realistic about your storage space limits. Overstocking can lead to inefficiencies and loss through damage or expiry.

Regularly review and make adjustments to your ordering processes to ensure that your salon operates smoothly.

Best Strategies for Salon Inventory Management

Effectively managing your salon’s inventory is essential to running a successful business. Your staff and clients rely on everything they need to be there.

Here are some foundational strategies that can set you on the path to success. 

Monitor Product Turnover

Begin by tracking product turnover over a few months. This will provide baseline information regarding staff usage and client purchasing habits. It’s important to revisit this data as the seasons change, allowing a few weeks to observe any shifts. 

Harness Seasonal Patterns

Understanding seasonal trends can significantly optimize your inventory management. By predicting when business will peak or dip, you’ll avoid accumulating excessive stock during slower periods, ensuring an efficient inventory. 

Reassess Your Pricing Structure

Take a comprehensive look at your pricing strategy.

Start by evaluating every aspect of your costs and ensure your pricing structure reflects the true value of your services. 

• How much it costs you to purchase
• How much you charge customers
• If you rent salon space, anything your staff is responsible for providing
• Any potential commissions

Market research is essential; compare what you charge against competitors.

Locate opportunities for price adjustments where you offer exceptional service or exclusive products. Remember to include a margin buffer for promotions or discounts to maintain profitability, and review your pricing regularly to stay ahead of market shifts. 

Cultivate Supplier Relationships

Suppliers are more than just providers – they’re essential partners in your business. Building strong relationships can lead to better deals, favorable payment terms, and even priority access to products when there’s a shortage. 

If you use a large supplier, keep up with their emails and newsletters where applicable. This will keep you in the loop when they have deals, shipping problems, missing supplies, and more.

Key Benefits of a Good Process

There are tons of benefits to doing salon inventory management the smart way. 

First off, you’ll see your cash flow improve. When ordering becomes a breeze, you’ll waste less product. Best of all, you’ll always have the right products on hand when your staff and clients need them.

We’ve seen these advantages work wonders for salon owners just like you. They all add up to a smoother, more profitable operation. You’ll be running a tight ship without tying up all your money in stock.

Here’s what improves with each strategy:

By getting smart with your strategies, you’ll strike that perfect balance between keeping your shelves stocked and your bank account healthy.

Check out these key players in the inventory management game:

Being consistent with these strategies will help you grow your profits and help you know what to expect so you can prepare your business for changes like adding a new location or seasonal dips.

Simplify Your Ordering Process

Make it easier on yourself to order products your salon needs. Salon inventory management isn’t just about counting bottles–you should work on simplifying everything so that future-you has less work to do, starting with ordering products.

Automatic Inventory Tracking

You’ll save tons of time and cut down on those pesky errors by simplifying inventory tracking. We recommend getting tech for this so you aren’t held down by paperwork or manual entry. This is where we shamelessly plug our scheduling software that has an effective inventory management system built in.

What does this look like?

When you purchase more products, simply input the amount into whatever system you’re using. Then, when you add products to an appointment that customers have purchased it automatically updates. No guesswork needed. 

Order What Makes Sense

How do we make this happen? Let’s break it down:

1. Adjust your inventory seasonally. Demand might change throughout the year and your stock should follow those trends.
2. Build solid relationships with your suppliers. Negotiate better terms and lock in reliable delivery schedules.
3. Implement a first-in, first-out system to minimize waste. Nobody likes throwing away expired products.
4. Train your staff. Make sure your team is on board and understands the new processes.
5. Listen to your customers. Their feedback is gold when it comes to making smart ordering decisions.

Reduce Waste and Shrinkage

The next exciting benefit of streamlined ordering is reducing waste and shrinkage. It’s awesome for boosting your salon’s profitability, and we’ve got some great strategies to share.

Prevent Loss

Keep a close eye on your inventory and set up security measures. Establish a system where inventory areas are only accessible to authorized staff or at least always visible.

If necessary, secured shelves or locked cabinets can deter unauthorized access, ensuring that your products are safe. Also, consider using inventory management software with access controls to monitor who makes changes to inventory records, allowing you to pinpoint responsibilities in case of discrepancies. 

By frequently reviewing stock levels, you can quickly identify and address issues like overstocking or the depletion of vital supplies. This proactive approach ensures that your salon always has the right products on hand. It also allows for timely reaction to theft. It is much easier to go back one week at a time in your security cameras than a few months.

This can really help cut down on theft and those mysterious losses that can eat into your profits. Regular stock checks and training your team are key here.

Analyze Inventory Turnover 

This is all about figuring out which products are flying off the shelves and which ones are gathering dust. By getting this right, you’ll avoid ending up with a backroom full of expired or out-of-date stock.

Product Life

Don’t forget about product life! Stay on top of those expiration dates and rotate your stock efficiently. This way, you’re always using products in the right order and minimizing waste.

By implementing simple ideas like these you’ll see a real difference in your bottom line. 

How To: Stock Rotation

Want to minimize waste and keep products fresh? A good stock rotation system is your best friend.

Here’s what we’ve done in the past to keep up:

• Conduct Regular Inventory Audits: Schedule consistent reviews of your inventory to spotlight best sellers and discontinue underperforming products. This helps keep your product selection relevant and profitable.
• Implement Customer Feedback: Encourage clients to share their preferences and experiences. Direct feedback can reveal valuable insights into which products are beloved and which ones are not. (Chilled Butter sends automatic texts and emails to your customers requesting feedback so you can get their opinions directly in your inbox. Just saying.)
• Leverage Sales Reports: Use data from sales reports to visualize trends over time. Identifying which products are consistently popular can guide your future purchasing decisions.
• Engage with Your Team: Your staff interacts with clients daily and can provide firsthand observations of what products gain attention. Hold regular meetings to discuss these insights for better inventory decisions.
• Stay Updated on Trends: Keep up with industry shifts and seasonal trends that might influence product popularity. Adapt your inventory accordingly to capitalize on current demands. 

Pro tip: Keep an eye on TikTok and Instagram. You’ll find the current popular products there.

As fellow small business owners, we know the challenges you face. With a little attention to detail and some smart practices, you’ll be amazed at how much you can reduce waste and boost your salon’s success.

Setting Goals and Benchmarks

Let’s talk about setting clear goals and benchmarks for salon inventory management. It’s all about aligning your team and driving continuous improvement. 

Pro tip: incentivize your salon staff with a product sales commission. Then, get a system to track it automatically every time they sell inventory.

Here’s a simple framework we’ve found helpful in our own businesses:

Keep an eye on these metrics regularly – it’ll help you stay on top of things and spot areas where you can make strategic improvements. For example, you might aim to reduce overstocking by 15% in the next quarter while keeping your product availability at a solid 98% for your clients.

Service Products to Stock

When it comes to stocking essential products for your salon, you want to focus on items that not only support the services you provide but also enhance your retail offerings.

So, what should you be focusing on? We’ve got some ideas:

1. Your everyday heroes: The shampoos, conditioners, and styling products that you reach for all day, every day. 
2. The VIP treatments: Think color magic, those luxurious repair masks, and the fancy tools that make your clients feel like they’re getting the star treatment. 
3. Seasonal superstars: Keep things fresh by rotating in products that match the weather. Protectant in summer, ultra-hydrating treatments in winter.

Leveraging Technology & Tools for Efficiency

Managing salon inventory can often feel like a daunting task, but the right technology can transform this challenge into a breeze.

With an efficient system or software, like inventory management software, you have the power to streamline your processes and make informed decisions that propel your business forward. 

Easily track inventory every time you sell a product without lifting a finger. Plus, always having mobile access to your inventory data means you can keep track of everything from anywhere, at any time. 

Ready to take your salon inventory management to the next level? Get started with Chilled Butter, our integrated scheduling and inventory management system, and watch your salon run as smoothly as… well, butter!