Manage Salon & Spa Inventory Efficiently

Management, Salon Software
4 minute read

Inventory is an integral part of your salon or spa’s profitability. Retail sales, when done properly, have the potential to multiply a salon’s revenue. Equally important, if not more, are your professional spa or salon supplies as these items affect your ability to provide quality services.

Beyond employee salaries or wages, inventory is typically the greatest expenditure for businesses. To run your business efficiently, it is essential to ensure that you are always well-stocked but also not wasting money on products that simply collect dust.

Ordering Products

Ordering the appropriate quantities is not a guessing game. While there may be some uncertainty for new retail products, you should always know which items are selling and how quickly. Run a report in your salon software to identify a sales trend for each product and adjust your purchasing based on this. For example, if you tend to sell 10-15 bottles of a certain shampoo per week and you order biweekly, then you may want to order enough to have 40 in stock once the shipment arrives. It will last you a couple weeks until your next order, and it leaves you with a few extra units in case sales increase or the shipment is delayed.

Similarly with professional supplies, you should be tracking the quantity used. Since it is not feasible to count the remaining quantity of each product every time you wish to place an order, some salon software programs have an inventory management system to track the amount of each product utilized for each service, even down to fractions of a tube or bottle.

Prior to submitting an order, it is advisable to set a budget. While having inventory provides an opportunity to make a profit, remember that there is a cost involved so excessive or unnecessary ordering will actually cut into your profit.

Auditing Stock Levels

Even with the best inventory management software, you should still conduct a physical audit on a regular basis. When counting inventory, it is recommended that at least two employees participate and check each other’s counts. Salons with a high level of sales should do this monthly while smaller salons may only need to it quarterly. The purpose is to ensure the quantities recorded in the software are correct and to monitor for shrinkage.

Reducing Shrinkage

Shrinkage is defined as the loss of inventory. It is a serious matter as it means you can no longer make a profit from those products. There are numerous causes for inventory loss including theft (by employees or by shoplifters), damage, expiry of goods, and even fraud. Whenever the reason (e.g. past expiry date) for writing off inventory is known, make note of it within your software program so you can reconcile the difference later. While it is impossible to eliminate shrinkage completely, steps can be taken to prevent it.


By ordering appropriate amounts more frequently rather than an occasional bulk order, you are reducing the risk of having products expire. Since you adjust your order quantity based on sales (or usage for professional supplies), you won't be stuck with boxes of products that are no longer selling.


Every time an order is shipped, you should be confirming that you received everything that you ordered. Missing a bottle of shampoo or accepting a damaged bottle every week will add up to a lot of missed revenue. Try to time your orders so that you receive them at a quieter time when you can check the shipment without disrupting any services you are providing.


With hair dye, nail polish, and other professional products, you should compare expected usage (calculated by your inventory management software as the average quantity per service multiplied by number of services performed) with actual usage (counted during an inventory audit). While some discrepancy is expected, a significant difference should be investigated. While it may seem to only be cents per service, it can add up to a few thousand dollars each year. To minimize waste, an employee may just need a gentle reminder to be more careful or perhaps extra training may need to be provided.

For retail products nearing their expiry, it's better to clear them out for something than to lose them for nothing. Discount these items, bundle them with your best-selling items, or even give them away as a promotion.


If you receive damaged products, your supplier may be willing to replace them. Alternatively, if it is only surface damage (packaging), consider using it as a professional product or put it down as a promotional cost. Even if it’s not regularly used during a service, find a way to incorporate it, explain its benefits to clients, and let them know the product is available for purchase.

Inventory Management Software

Insight Software gives you the power to manage your products and supplies with ease! Track sales and usage, build purchase orders automatically, print barcodes, and run inventory reports. Operating more than one location? Insight's multi-location option allows you to manage inventory from all locations at one time and to transfer items between them.

Experience Insight today - download a free trial

Topics: Management, Salon Software
Posted on July 7, 2016