Salon Inventory Management | 7 Benefits For Your Salon

Salon inventory management is an integral part of running a hairdressing business. If retail sales are processed and tracked with the correct methods, most efficiently with the use of salon management software it can help improve your salon’s profits.

Aside from personnel, rent, and utility costs, inventory or stock, as it is called in some parts of the world, will probably be the next largest business expense in your salon.

So to make your life easier, we’ve come up with some of the key elements you need to know about regarding salon inventory management.

So let us get on with it...

What You Will Learn?

You will learn about salon inventory management and how it can help you boost retail sales, reduce stock costs and increase profitability of your salon.

Quick Chapter Links

  1. Why Is Stock Management So Important?
  2. 7 Benefits of Salon Inventory Management
  3. Don’t Guess At Salon Stock Management
  4. Manage Cashflow By Tracking Salon Stock
  5. Set Your Goals For Managing Salon Inventory
  6. What To Items To Include For Inventory Management Of Salons?
  7. What Inventory Data Do You Need To Store?
  8. Define Inventory Usage In Your Salon
  9. Use Salon Inventory Sheets To Decide How Much To Order
  10. Different Ways to Track Your Salon Inventory
  11. Track Shrinkage In Your Salon
  12. When To Audit Your Salon Stock
  13. Use Salon Inventory system To Monitor Inventory Turns
  14. Train Staff To Use Salon Inventory Apps
  15. Have Suppliers Help With Salon Inventory Control
  16. How To Display Hair Salon Stock
  17. Final Salon Inventory Management Tips To Remember
  18. Conclusion

Why Is Stock Management So Important?


Salon stock inventory represents cash being locked into your business and this can cause serious cash flow issues if not managed correctly, which results in one of the biggest reasons why salons fail according to research by the Small Business Association of America.

So you need to get it right? Right?

More importantly, having a salon inventory control system in place, either using a spreadsheet or salon inventory software will enable you to correctly manage the inventory levels of you retail and backbar products can help improve the quality of your salon's customer experience.

There is nothing worse for a client when their favorite product being out of stock or products which form part of a service not being available.

Would you like to be the member of staff to break the bad news?

Probably not!

It certainly pays off to know how to manage your inventory effectively to minimize the risk regarding these critical areas.

Stock management in a salon isn't difficult

Many salon managers or owners think good salon inventory management can be very difficult and takes a lot of time...

It doesn't...

However, this is only if you efficiently document (whether on paper, in xlsx or in the cloud), track properly and then it becomes seamless in your every day business.

7 Benefits of Salon Inventory Management

  • Improves Business Cash Flow
  • Improves Profits
  • Improve Customer Experience
  • Improves Ordering Process
  • Reduces Shrinkage
  • Reduces Overstock
  • Saves Time

Don't Guess At Salon Stock Management


salon inventory management guess

Deciding on when to make an order with suppliers and maintain good inventory levels in a salon should not be guesswork.

Effective salon inventory management is about an ongoing combination of checking salon inventory lists and careful timing of orders.

This is process of tightly controlled ordering is called "Just In Time" (JIT) inventory management...

You will be fully aware of your more established products with their predictable sales trends and volumes. But you might have a new product with an unknown sales performance.

Regardless of whether you are concerned about back bar supplies or retail supplies, you can use inventory management to help ensure that you grow your business profitably.

Several online inventory management software providers automate stock control and automatically reorder for better order management.

Manage Cashflow By Tracking Salon Stock


Any successful business owner knows that cash is king and essential to any business.

It’s important to have salon inventory management systems and processes in place to make sure you have enough money in your bank account at the end of the month, but still have enough supplies to last till the next delivery.

This isn't a science if done correctly.

Inventory Tips To Improve Cashflow

  • Keep your back bar and retail supplies separate in order to accurately track costs as a percentage of sales and find out what your net profits are.
  • Order a more restrained quantity based on the data from your inventory reporting to reduce storage and wastage costs.
  • Monitor individual item movements with data from either your salon inventory tool (i.e spreadsheet, list or software) to keep minimum and maximum stock levels updated.
  • Manage your Cost of Goods Sold (often referred to as COGS). This can cover different variable costs but generally covers costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and storage.
  • Monitor movements often to be on top of supply levels, you don't want to run out of an established popular product or overstock on an untested new product.

Set Your Goals For Managing Salon Inventory


It is essential that you set goals for yourself, as well as your team to drive efforts to achieve your objectives regarding salon inventory management.

How do you know the targets if you don't set goals?

Salon Inventory Management Goal Ideas

  • Stock loss / shrinkage target
  • Maximum cost of stock as percentage of revenue
  • Minimum stock holding levels
  • Gross profit targets
  • Cost of Goods Sold
  • Maximum category types
  • Maximum number of brands
  • Maximum length of time to hold stock before discounting
  • Maximum discounting per product
  • Product storage safety
  • Product usage for backbar
  • Number of sell out products per month
  • Transfer of goods between sites, if multi-site business
  • Control between stock room and salon or spa retail area

What To Items To Include For Inventory Management Of Salons?


It is often the question from many salon owners and managers on what items within a salon to include on the salon inventory list of items.

We believe that all items which assist you in providing a service to your clients should be included and tracked.

Basically anything that moves (including out of your salons door) or needs re-ordering, should be included.

Here is a lost of what can be included in your salons inventory:

  • Retail Products
  • Backbar Products
  • Cleaning Products
  • Towels or Robes
  • Other Products Which Support Operations

What Inventory Data Do You Need To Record?


To make life easy for you and your team, it is always best to start the right way and this includes capturing all the correct product and distributor information.

Depending on the size of your business, it is up to your as to what to include in any inventory spreadsheet or list.

Remember one of the key benefits of salon inventory management is to save time.

So lay the right foundations for the process to work effectively.Here are some inventory data items which you should include:

  • Your Reference Number
  • SKU / Barcode
  • Distributor / Wholesaler
  • Brand
  • Product Name
  • Product Description
  • Minimum Stock Level
  • Wholesale Price
  • Tax Level
  • Retail Price
  • Total Value In Stock
  • Re-order Volume
  • Stock Location
  • Product Expiry Date

Define Inventory Usage In Your Salon


It can often become difficult to track specific inventory items once they have been placed in back bars, treatment rooms, or for retail sales on the salon floor.

Encourage employees to report how much of which products they use for different treatments so this data can be held by some salon software solutions. The software can then generate reports on the material costs for each treatment and suggest further when back bar products should be re-ordered.

For example, how many shampoos on average will you get from a 34oz / 1 litre bottle shampoo?

If your salon management software allows tracking of business usage, it will enable a you to find out how much of each product you can expect to have at any given minute.

All you have to do is input how frequently each type of treatment is offered to get results accurate to a fraction of a bottle.

Although we acknowledge that this may not be the precise levels as actual usage (usually deviating by no more than 2-10%), it is a useful benchmark to use when deciding when to order new supplies.

Use Salon Inventory Sheets To Decide How Much To Order


Aside from knowing when to order, salon managers usually have the task of deciding what kind of products to order and at which quantities to order.

You can take advantage of the salon inventory tracker function available in salon software. Consider the following workflow to enable salon color inventory system to track supplies based on products delivered to the salon:

  • Make purchase orders , the manager should have access to information such as product sales and deliveries. The manager can identify how much of what to order and group orders by vendor.
  • Approving purchase orders , purchase orders provide full transparency to the finance manager or owner of the salon. They can then review and approve orders with that information.
  • Use purchase orders to verify deliveries , when the vendor delivers your supplies, the manager can check that the rich quantities of the right products are delivered, then update the records.

Different Ways to Track Your Salon Inventory


Traditionally, inventory tracking and goal setting is done by having a salon inventory list or a hair salon inventory spreadsheet which is an easy way to With inventory software, managers can see data that is automatically logged by the system and generate quick and easy reports. Computer systems can also track products that are close to their expiry date as well as informing the manager on which products have lower turnover rates.

Salon Inventory Software

Many salon management software solutions have a salon inventory app which allows you to have visibility of your inventory and allows you to carry out reporting at anytime.

An effective salon manager should look for well rounded inventory software that offers:

  • Access to real time inventory levels
  • Should be web based and in the cloud
  • Retail point of sale for ease retail stock management
  • Ability for barcode scanning
  • Project inventory depletion based on a range of service combinations
  • Compare it to physically audited stock levels
  • Remind salon managers to order products when stocks are near depletion
  • Suggests ordering products at adequate levels to cut down on storage space but ensures availability
  • Generates reports with actionable conclusions so salon owners can make effective decisions
  • Integrates with accounting software, such as Quickbooks or Xero.

Salon Inventory Spreadsheet

This is the next best thing to using salon software within your salon and allows you to electronically track your stock levels.

One of the best things is to upload your salon inventory spreadsheet to Google Sheets, as this makes it available to you where ever you might be.

Salon Inventory List

This is probably one of the least infective ways to manager salon inventory as you are unable to automate any of the processes.

If you are starting out, then using a salon inventory list template (sometimes called a salon inventory count sheet) is a good way to start. It allows you to easily understand what you need to measure within your salon.

Software can develop a report and give you a recommendation.

It will let you know which intervals you should order at to optimize delivery costs and fulfill minimum order requirements. You could even track usage of supplies on a per service basis that can break down inventory depletion down to fractions of a bottle.

In the long term deciding on which day of the week to make an order matters. Managers may even choose to use the stock alert function or be reminded regularly on when to order.

The stock alert function makes you aware of any imminent low stock situations. You can use this information to order in time before it depletes completely. If a salon is typically busy say, during the weekends, you may want the system to remind you to order on a Monday or Tuesday to guarantee shipping arrives the next working day.

Salons with multiple locations are advised to keep each branch a separate entity, so stock can be transferred if necessary.

Remember to set a budget before you order any products from suppliers. Having enough stock to serve your customers means you can take every opportunity to provide services. But excessive stock can also represent higher costs in terms of storage.

Track Shrinkage In Your Salon


The loss of inventory is a serious issue and can represent lost profit. That’s why it’s important to be able to track and reduce shrinkage.

Fraud, damage, theft, expiry, or obsolescence of goods can all lead to shrinkage. While it is impossible to reduce inventory loss to zero, steps can be taken to alleviate the situation.

By ordering the appropriate amount of products at regular intervals, you can reduce shrinkage. Product expiry is frequently a result of ordering too much stock at irregular intervals. You can use inventory tracking methods on salon software to help with ordering the right quantities.

Shipments need to be thoroughly checked for damages or missing products.

Timing orders with less busy times of the week allows you to check all incoming deliveries carefully before accepting them. Usually, if a product is damaged a supplier would be happy to replace it on the next shipment. If only the packaging is damaged, you could think about using it as a back bar item or marking it down at promotional prices.

Wastage usually occurs through bad employee habits.

Remember to check projected usage in the software with actual usage when auditing to see if there are any major differences in the numbers. Additional staff retraining may be in order if this situation persists in your salon.

When To Audit Your Salon Stock


Salons should conduct regular audits even when salon inventory management software is in place. Salons with high retail sales and a high inventory turnover rate should do this on a monthly basis, but smaller salons should be fine with a quarterly or bi-annual stock audit. The purpose of this exercise is to make sure that any discrepancies in actual salon product inventory list are reconciled with the data in the software.

Typically, two or more salon employees count the physical stock in the salon. They then exchange counts and check each other’s against their own to ensure full accuracy. Sometimes, a discrepancy may be due to a human error in counting or scanning products, so it is always wise to set a 2% allowance for any differences between the count and the software’s record.

Use Salon Inventory System To Monitor Inventory Turns


Inventory turns is the frequency at which supplies deplete or replenish. It is the crucial link to understanding the relationship between retail profit and inventory costs. The number of inventory turns are usually calculated in an annual basis, but some salons with higher sales frequencies may choose shorter intervals.

A higher inventory turn rate means that a particular product is being sold frequently and is healthier for your cash flow. You may want to order these products in larger quantities in longer intervals to aggregate shipping costs. Inventory software can use salon inventory templates to decide when to order which products and what quantities based on inventory turn frequency.

Train Staff To Use Salon Inventory Apps


Provide your staff with adequate training to inventory and supply management. Make sure they know how to interpret and use software tools such as hair color inventory sheets, salon inventory forms, and beauty salon inventory lists. Maintaining a proper purchase order hierarchy is key to eliminating duplicated efforts. If two or more members of staff are assigned to monitoring the same product, it may result in duplicate orders causing wastage and confusion.

Design the inventory oversight system so that it is strict, but transparent. You need to be able to monitor and limit loss due to employee theft or carelessness, but also able to track sales and professional usage of supplies.

Have Suppliers Help With Salon Inventory Control


Limiting your salon to just a few professional product lines, especially when you are opening a new hair salon, can help you build a healthy relationship with your suppliers. Usually, suppliers are willing to help you with in-store advertising, especially if you stock their latest products. Build a strong network of suppliers and work towards a symbiotic product offer.

Customers often rely on your professional knowledge when a brand new product is rolled off the production line. Provide them with advice on how to use those new products and give them information on the latest products available. It is worth providing promotional offers to give customers an incentive to try out the new product.

Some types of products could be specific to certain times of the year and present seasonal cycles. Make sure you stock enough ahead of peak seasons and work with suppliers to see if they are willing to take back excess stock after the season is over to avoid product expiry wastage.

In some products, certain chemical compounds are sensitive to changes in temperature. Salon owners should be reminded that certain regions might see adverse weather in the winter. Extensive shipping times could ruin some products under these weather conditions. It could be useful to stock up for winter before the cold front arrives and managers can use salon inventory management systems to predict how much to stock for the coming winter season.

How To Display Hair Salon stock


It's important to use hair salon inventory spreadsheets to keep track of supplies and keep shelves full. Customers are much more likely to buy products on a full shelf. Make sure products are place in the front of the shelf and brightly lit to appeal to walk-in customers. Here are a few tips to optimize shelf space.

Have enough products to stock shelves fully but not so much that it crushes your cash flow. Limit yourself to 2 or 3 professional product lines to observe purchasing patterns. Designate a member of staff to work as a sales representative and be in charge of retail inventory management.

Your recommendation to customers as a hair professional is the most persuasive in-store marketing tool, don’t stock brands just because they are well known.

Work with companies that are willing to take back products if they don't sell, make sure your cash can flow in your cash flow.

Another issue with product placement is theft. You may want to place more expensive products in the back of the shop where staff can supervise it and have security cameras in the front where shoplifting usually occurs. Encourage your staff to offer assistance to shoppers to deter suspicious activity.

Final Salon Inventory Management Tips To Remember

  • Audit stock levels at regular time intervals and find out if there are any discrepancies between physical stock and projected usage
  • Manage storage space by not overstocking slow to sell products and not understocking popular items
  • Know how much of which products are in store at any given time, this rule avoids wastage
  • Use salon inventory software to predict how much inventory you will need to order and keep some stock in case of delivery delays
  • Find out what the expiry dates for products are and only stock as much as needed to avoid shrinkage
  • Build a strong network of suppliers and take advantage of your relationship to secure offers at lower prices
  • Choose the right process or system for your salon, to help you with your inventory control



Salon inventory supply tracking and management is a major cost center in managing a hair and beauty business. It is important to be able to be up to date with the latest sales trends and product movements to make sure the right amount of stock is ordered. While some of these tips may lead to immediate results, others may take time to show benefits on reducing costs.

What are your tips to share regarding salon inventory management? Share them below.

And if you love these ideas or have some other ideas that you've used in the past to promote your salon business, why not share it with the Zolmi community in the comment section below. We would also be delighted to answer your questions, as well.

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