Profiting From Your Product Lines
Effective inventory management is a function of having good and timely information, forecasting and planning. I have found there are five key factors when it comes to inventory management.
1. Less is more: About 80% of a spa’s product sales come from 20% of the products available on a daily basis. Keep a good “cushion” of inventory on top sellers. The majority of guests do not visit the spa on a regular basis. So, if you are out of stock on something a guest wants to purchase during a visit, you will likely lose the sale. Having a good stock of your most popular items will hedge against losing that sale.
2. Education is power: The more your staff knows and understands about the products used in your treatments, the more comfortable they will be selling these products to their clients. It is important to commit to product lines that offer education. Most product lines will provide extensive product knowledge and training classes and even ongoing spa and therapist support.
3. Know your clients: What your client wants, and what you think they want are often two different things. Talk to your clients and ask yourself if you are being market-focused or product-focused. Being market-focused can reduce the worry over slow-moving or excess inventory. It’s about what your guest wants and is willing to pay for.
4. Create a marketing plan: Marketing plans will help the entire spa team focus on maximizing profits from special promotions, seasonal items and new products. Keeping your staff motivated with clear expectations helps them to move products into clients’ hands.
5. Develop a tracking system: 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 spa’s inventory. Determine which products and promotions are your best-sellers. Then you can estimate how much inventory to have on-hand and create an appropriate marketing plan.