It’s the dream of every salon owner to improve their profit margins. There are multiple ways to go about this. For instance, increasing your service prices, running promotions or simply improving the client experience.
However, these steps only improve profit margins slightly and not in a large way. For most beauty and hair salons, the product plays a crucial role. The business literally relies on frequent use of products (hair colour, shampoo, skincare, makeup, etc.) and retail sales.
When product use is high, it is important to control product costs and get only the right quantity of supplies. Else, you will be eating into your profits. This way, you can improve your bottom line without changing your marketing approach or raising your service rates.
Salon management software has a crucial role to play in controlling product costs. It prevents overstocking, reduces wastage and ensures there is never a shortage of your most popular products.
Gone are the days when salon owners would conduct manual, paper-based inventory counts. Today, digital systems are replacing manual processes.
Keep reading to find out how.
Role of Beauty Salon Software in Making your Salon More Profitable
A good salon management software has a built-in inventory management tool that helps with real-time product tracking. Here’s how you can start:
- Understand how Inventory Affects your Product’s Profitability
When you run a salon, product costs don’t just come under expenses. They play an important part in your services and retail sales. Every product/item you stock affects your overall operations.
Whether it’s high-end colour formulations or basics such as shampoo and conditioner, you need to understand the role of inventory in your salon’s profitability.
Hoarding too much product can result in waste especially if it has a shelf-life. Similarly, products that go unsold result in blocking cash/credit. Thus, as a salon owner, it is your duty to maintain a well-balanced inventory. It’s important to control costs in order to maintain a steady cash-flow and improve your overall bottom line.
- Real-time Inventory Tracking
When you run a really small salon business, manual tracking of shampoos and conditioners might seem doable. However, when you become a full-blown salon chain, a digital tracking system or inventory management tool is a must.
This way, you can streamline the entire process and ensure there are no errors. It helps tracking inventory in real-time. Each time a product is used in a service or sold as retail, it automatically deducts the quantity or unit respectively.
Besides this, the software also provides real-time stock counts and prompts reorders when it goes below a certain threshold. This helps you control product costs considerably.
When you’re using beauty salon software, it’s all about setting par levels. Set the minimum amount of product you need at all times to keep your salon running smoothly.
Doing this prevents over-purchasing and stockouts. When demand spikes, you know you have a backbar of products available. Real-time inventory tracking also helps you spot dead-stock or slow-moving products.
Did you know? 75% salon businesses have been able to reduce waste and unnecessary spending only by switching to salon management software.
- Expense Tracking
When you run a beauty business, you don’t just need individual systems to monitor your business. Instead, you need a blanket solution that takes care of everything.
What if we told you that Salon360 has an inventory management tool and point of sale for salons that work directly with each other. It gives you a complete picture of what’s selling and what’s not selling in real-time.
Expense tracking is very important to monitor and calculate all the ongoing costs including supply purchases, vendor management and so on. You get a clear picture of which product is moving faster and which one is near to expiry. When a batch of retail is going to expire soon, you can immediately run a mid-season promotion to quickly move it off the shelf.
This way your overall bottom line and profitability does not stand affected, and you get to control product costs at the same time.
- Keep Retail & Backbar Separate
Another highlight of using salon billing software is that it keeps retail and backbar inventory separate. It efficiently separates products sold to clients from products used in services.
This helps you analyse true service costs and helps you price your services appropriately so that you do not incur any losses.
Most shrinkage and wastage in a salon occur because these two are usually tied together. When sales and usage are tackled separately, discrepancies are flagged and theft/misuse can be detected easily.
Conclusion
Gone are the days when managing inventory was all about guesswork. Today, it’s all about control and knowing your numbers. Salon360, a beauty salon app, makes this possible. Wastage and overstocking are reduced, and you only stock what you use and sell.
Are you ready to reduce your overall product costs? Take a free demo!
