Salon owners can reduce costs by limiting the number of product lines and distributors they use. Smart inventory controls also boost your bottom line.
Every salon owner has experienced that slow burn of anger when she goes into the back room and finds a pile of acrylic powder on the counter where someone was filling a powder dish or a half-used tube of adhesive thrown in the trash because the tip was clogged. The staff looks for more product while you look at your meager profits on the way to the dump.
It doesn't have to be this way! Putting just a few systems in place can reduce your frustration and the amount of money you spend on product.
Use Fewer Lines
If you go into your back room and see a little bit of everything offered on the market, it's time to reduce the inventory you are trying to track. You are probably buying smaller amounts of lots of different products, which can double the amount of money you have tied up in table product. By cutting down to one or two product lines for each service you offer, you can buy larger quantities and save money.
In deciding which lines to keep, factor in your distributors. Which ones give you the best service with the least amount of back orders? If you stick to one or two distributors, you can reduce your shipping costs and set up accounts for payment. If your distributor won't let you set up an account, use a credit card for payment and save hundreds of dollars a year in C.O.D. charges.
If you do a sizable volume with one distributor, ask for an across-the-board discount on product purchases. This can save you hundreds, even thousands, of dollars per year and reduce your bookkeeping headaches. Ted Kossof of Teddie Kossof Salon & Spa in Northfield, Ill., says, "Because I do so much business with my primary distributor, I get most of my back bar products free. Using one or two distributors keeps our volume up [with those distributors] and our bargaining power strong."
Educate Your Staff
Choosing products should be a decision that involves your stall. Everyone needs to feel good about the products the use to service their clients. We all know that not everyone likes the same' tiling, hence the shelves full of multiple items.
Noel de Caprio of Noelle: The Day Spa in Stamford, Conn., has eight nail technicians who all use the same products. Spa director Paula Fierson says, "Our nail technicians work together to choose the best products. When they suggest a new product, we consider the distributor and the cost, then have an educator come in for a demo."
Strong product education is the first step. Your staff will have bettor success with products that they know how to use properly.
When announcing which lines will stay and which will go, let your staff know the criteria you used in selecting table product lines. Then, you can set up a research strategy involving your staff to assure everyone that the best products are being used.
Educate your staff on product costs. At salon meetings compare the cost of different sizes and lines of product, include a breakdown of shipping, handling, and CO.D. costs. Then show them where the table product costs fit into the overall operational expenses of the salon.
Incentive Programs Work
Show the staff the monthly totals of product costs for the past six months, and, as a group, set a goal to reduce the costs by a predetermined percentage within a certain time period — say, 15% within three months. Then decide what the incentive to meet the goal will be. Money always works, but it might be fun to purchase something for the back room, like an espresso machine, or plan a special event for everyone.
Make a Shopping List
It's so much easier to keep track of what you need to order when you use some sort of inventory list or salon computer software, rather than the "eyeball" method. Your goal should be to order all product just once a month to reduce shipping costs. Having a formal tracking method will keep you from having to call your distributor in a panic to order one important item that you missed on your monthly order. Also, set up your product on the shelves to match your list so that checking product in and out is less lime-consuming. When your order conies in, rotate your stock so that older product gets used first.
Appoint a Manager
If you are too busy to track inventory yourself, make a staff member responsible for the product reserve. Someone needs to keep an eye on product reserves and be available to dispense product to the staff. Your inventory manager can also write the orders and process the invoices.
Protect Your Investment
It's really for everyone's benefit to have the supply room locked. When costs are kept down, everyone's profits increase. Only you and the inventory manager should have keys to the supply room. If you have not locked the supplies up before and plan to now, be prepared for some grumblings from the staff (usually from the abusers). When addressing complaints, refer back to the new bonus plan to smooth things over.
There should be a policy in the employee manual regarding supplies being taken home for personal use. Kossof's employee guidelines allow employees to purchase product at cost to take home under special circumstances.
Having an inventory system in place will reduce waste and pilfering. We are working with a small enough margin of profit as it is in the salon business. When it comes to table product control, "every little bit counts" has a very big meaning.