Stock is a key part of any salon, spa or clinic. However it can have a severe impact on your business if it’s not correctly managed. So here are 6 steps to help you successfully manage your stock.
1. Understanding where you’re at
Do you have any processes to keep track of your stock? Do you know how much money is sitting on your shelves? It’s important to take the time to understand where you’re at so you know what you need to do to improve your stock management.
2. Regularly stock take
To start, look at your current stock levels and the value of that stock. If you’ve got a software system where you’re already tracking your stock, that’s great! Otherwise you’ll need to a pen and paper or an excel spreadsheet.
Once you know what stock you have on hand, you need to think about scheduling a regular stock take for your business. To do this, you should think about:
- How often you’ll stock take. Once a week is recommended.
- When you’ll stock take. Setting a specific day and time helps to create a habit and introduce it into your routine.
- How you’ll record your stock take. Using your software package to automate this will save time, reduce errors, and make updating your records and ordering more stock a breeze.
- Decide how you’ll track in-salon stock use. See if your software package has a stock ‘check out’ feature so your stock levels are always kept up to date.
3. Knowing what you need
Stock management is a balancing act. From the amount of stock you have, to how often you stock take and what you order, it’s all about having the right amount of stock to meet the needs of your clients and staff.
Here’s some tips to understanding what you need:
- Run your reports and identify trends. What do you sell lots of and what doesn’t sell? Let history guide your orders.
- Don’t let discounts drive your purchasing decisions. You should purchase the stock you know your can sell at a profit and within a reasonable time frame.
- If you’re running a promotion or marketing campaign, consider the impact this could have on your stock levels.
- Don’t over order. According to the State Government of Victoria, Australia the estimated cost of holding stock is 10-30% of the stocks value. Costs include storage, insurance, keeping accurate tracking records and controlling stock to avoid theft.
- Keep shelf life in mind. You don’t want to risk stock going out of date before you get a chance to use it, so only order when stocks are running low.
4. Who’s in charge?
Assigning a dedicated person to manage stock can help in a number of ways. It’s efficient, allows an individual to become experienced in the process, gives accountability to one person and can help reduce mistakes that can occur when there’s many people involved.
5. Create an ordering system
Your in-salon and retail stock must be sufficient to meet the needs of your customers and staff without running out or tying up too much of your budget. So having a really good ordering system in place is key!
To have a good ordering system you need to consistently complete stock takes. Whether you do this manually or use a salon or spa software system, keeping a record of stock turnover will allow you to determine what your orders should be.
There’s a few different stock ordering methods. Salon Today suggests that having enough product on hand for one month of in-salon and retail sales is a good starting point. Or you could set your own minimum threshold stock levels so you know when you need to reorder products. To calculate this, determine your supplier lead times and your sale levels of each product. For example, if it takes a supplier five working days from order to delivery of products, and in five days you historically sell 10 bottles of shampoo, your minimum threshold for that product is 10.
Whichever method you chose to use, by regularly stock taking and having a clear method for ordering stock, you’ll be able to ensure you always have the products you need.
Having a strict process for incoming orders is important as you need to ensure what you’ve received matches the invoice. It also helps keep your stock takes up to date.
No matter what system you use to keep track of your stock, it’s important to correctly record every change in stock. By updating your stock take every time it changes, you’re more likely to have correct information to refer to.
6. Think about storage
There’s a few things to think about when it comes to storing your stock:
- Do you have products that need to be kept in certain conditions? e.g. not in direct sunlight.
- If you have more stock than what’s on display, ensure you have enough space to store the excess somewhere.
- Track where your excess stock is stored. It’ll allow you to keep stock organised, be quick to find and ensures stock takes can be completed fast.
- Bear in mind expiry dates. If there’s still product on your shelf don’t put the new stock in front of it, put it at the back so you’re using older products first.
We hope this helps put great stock processes in place so you can more efficiently manage your stock!