Industry • Best Practice
3 Tactics to Conquer Inventory Management
Staying abreast of inventory management for spas and salons can be challenging. There’s a lot already happening in day-to-day operations. Topping it off with trying to keep track of inventory with a pen and paper, a gaggle of sticky notes, a slew of purchase orders, and a half-hearted Excel spreadsheet is not only inefficient, but it’s also exhausting. Around 43% of small businesses are either doing it this way or flat-out pretending it doesn’t exist. Thankfully, Boulevard's Inventory Management feature set is aimed at helping salons and spas across the country conduct business as usual while taking care of the details
Here are three areas of inventory management you should know, tactics to approach them, and how Boulevard’s Inventory Management feature was tailored to assist.
1. Understanding Shrink
For those of us who’ve worked retail, we’ve heard the word “shrink” thrown around by management nearly every day. It has nothing to do with the size of the store and everything to do with inventory. According to Investopedia, “shrinkage” is defined as “the loss of inventory that can be attributed to factors such as employee theft, shoplifting, administrative error, vendor fraud, damage, and cashier error.” I’m sure you’re thinking, “Okay, but how does this apply to salons?”
I’m glad you asked.
Most retailers experience 1.8% of sales loss per year due to shrink. However, fashion and accessories retailers experience shrink as high as 2.43%. Overall, inventory shrinkage represents a $100 billion annual loss for retailers worldwide.
And administrative errors are a big part of that number—accounting for as much as 21.3% of annual shrinkage. A good point-of-sale system with inventory management options that help reduce the opportunity for human error and monitor the transactions as they happen is crucial. The ability to adjust inventory quantities at a moment’s notice and have a history of changes on command plays a major part in lowering shrink. Boulevard’s system also generates a Product Quantity Adjustments Report, listing usage, recount, damage, theft, loss, and return of items. Pretty handy, huh?
2. Creating Solid Purchase Orders
The worldwide cost of inventory distortion (that includes shrinkage, stockouts, and overstock) is an estimated $1.1 Trillion—nearly the same price tag on the entire continent of Australia. How do we fix it? Solid, preliminary planning. Reducing stock-outs and overstocks can lower overall inventory costs by 10%. Good news for your salon, great news for Australia.
Step one, have a solid Purchase Orders system—if you guessed that Boulevard has the very thing, you’re right! The Purchase Orders feature allows for integrated management of product ordering and invoicing. Step two, figure out what quantity you need and what price point you’re looking for. Step three, purchase your supplies from the best supplier on the market. Keep an inventory log and encourage employees to report products being used regularly to estimate changes and opportunities in business operations. It’s a simple, extra step that can save the salon money and reduce overhead costs.
Now that you’ve created your purchase orders, let’s talk about shipping and receiving them.
3. The Importance of Shipping and Receiving
Most major corporations and mega-retailers have a dedicated team for the shipping and receiving part of inventory management. For some franchised salons, it may be one or two people who manage the stock in multiple locations for seamless transfers. But for smaller salons and spas, the owner wears many hats, and shipping and receiving is one of them.
According to Conveyco, poor inventory management has led to 34% of retailers to deliver products late due to lack of inventory in stock. Inaccurate inventory levels make it impossible to manage stockouts and replenishment schedules that lead to a poor customer experience.
With Boulevard’s integrated inventory management tool for receiving inventory and adjusting stock, businesses can track inventory efficiently. All product sales done through Boulevard will automatically update product quantities.
Another important aspect of inventory is storeroom procedures. Whether that means a separate building or an extra closet in the back, every salon and spa has a storeroom where arriving inventory is settled—a perfect time to update the numbers to your Boulevard inventory page. And, when products are taken out, details of the person handling and removing inventory should also be recorded. All in the name of preventing the dreaded “S”-word (spoilers: it’s “shrinkage”).
The good news is, with a solid inventory management system and know-how on what to look for, you’re already ahead of 37% of your competitors. It will also improve cash flow, customer retention, and brand loyalty—all thanks to customer satisfaction and inventory recordkeeping. It takes the guesswork out of product management and allows for more accurate reporting and ordering. Boulevard will be with you every step of the way to simplify the transition to stellar inventory management. We’re excited to work with you!