Five Best Salon Inventory Practices You Should Know

If you are a salon owner, your inventory management skills can be the difference between being successful and being quite unsuccessful. You may be asking, “What exactly is Inventory management?” According to Salon Scale, Inventory management is simply defined as “the act of tracking the number of products you currently have in stock.” When it comes to inventory, your goal should be to reduce the cost of the inventory you have on hand while also being able to know how much stock to order. If you have too much inventory on hand, this may be indicative of poor ordering skills. However, you must also make sure that you keep enough inventory on hand for your clients.

Here are five of the best inventory practices that salon owners should make themselves familiar with:

  • Order your inventory on a budget.
  • Audit your inventory regularly.
  • Be sure that you avoid shrinkage.
  • When it comes to inventory, more isn’t always better.
  • Use salon management software that centralizes all of your information.

The goal of this article is to help you gain a better understanding of how inventory works, and how you can follow these five easy practices to help better control your inventory. We will take a look at how ordering too much inventory, or too little inventory can be detrimental to your salon. I will also give an in-depth explanation of each of these five inventory practices, and explain how following each one will help with your inventory management skills as well as your bottom line.

Order Your Inventory on a Budget

One business practice that any shrewd salon owner should make sure that they are doing regularly is to have an understanding of how much their salon is spending on inventory both monthly and yearly. After all, analyzing your budget regularly will give you a better understanding of how your salon is performing. If you are unsure of what you should be spending on inventory, keep in mind that a good number is to spend between 5 and 10% of your service income. By basing your inventory budget on your sales, you will be much more likely to stick to your budget. Another way to determine how much inventory you need is to baste your order on the previous month’s usage.

You should also try to avoid impulse purchases while you are ordering inventory. If you are spending money on products that you don’t need, you will only end up changing your salon on the products that you do need to have in stocks. Another great way to avoid overspending is to allow 20% of your inventory budget to be spent on retail products while allowing 5 to 10% of your budget for products that you keep in the back. You will be able to keep better track of your inventory expenses by having one part of your inventory dedicated to retail and the other part reserved for service products.


Check out this inventory list for a beauty supply store!

Audit Your Inventory Regularly

Five Best Salon Inventory Practices You Should Know

Now that you have gained a better understanding of how your inventory budget works, you need to start auditing your inventory regularly. Not only will this allow you to have a better understanding of what you are spending and how much is being used, but it will also help you to identify errors in your inventory records. Regular audits of your inventory will also help you to identify if there is any potential fraud going on in your salon, as well as identifying any theft that may be occurring. While it may be unfortunate, this does happen from time to time, and audits help to identify when this is happening, and how much is missing.

Audits will also greatly assist you in ordering inventory because they will give you an understanding of what products are being sold, and how much of them are being sold. Once you identify your top, middle, and lower sellers through auditing your inventory, you can then prioritize what you need to keep in stock versus what you do not need to have on hand. Did you know that over 40% of salon color is not being used? This is another area in which all the team will allow you to keep tabs on how much color you have in your salon, which will avoid unnecessary waste. If you are spending less money on color, you can allocate that money to another product that you may need.

There is one final area in which auditing can help you with your inventory. A regular audit will help you to keep track of any changes in expenses regarding your inventory. While I am sure that I don’t need to tell you how important it is to know how much your business is spending, sometimes increases in expenses may be so subtle that they go unnoticed. If you are auditing your inventory regularly, you may catch some of these increases in expenses before they get out of hand. This knowledge will give you the ability to adjust your inventory orders accordingly to fit your budget.

Be Sure That You Avoid Shrinkage

Shrinkage can be one of your worst enemies when it comes to inventory, which is why you should try to avoid it at all costs. Keep in mind that the products you use on your customers have an expiration date. I’m sure that most of you grew up with the saying, “Waste not, want not.” Well, this couldn’t be more appropriate than with your inventory. For example, the average shelf life of hair color that has been opened is anywhere from one to two years. The shelf life for unopened hair color is three years. One good practice would be to make sure that you are using all of the hair colors before the shelf life expires.

When you think about it, if you are losing inventory, you are losing money. I have said it before and I’ll say it again. Nobody and I do mean NOBODY, is in business to lose money. Think of shrinkage as a direct hit to your salon’s bottom line. This is where auditing your inventory can pay huge dividends, as you will have a better understanding of what is being sold, what is being used, and what is sitting in the back. When products are not being sold or used, they are slowly expiring, which can also affect your inventory budget.

More isn’t Always Better

While many people like to be prepared for a rush on products or services, one of the best policies you can adhere to regarding inventory is that more is not always better. Simply put, this means that you do not need to overstock your inventory. Keeping too many products on hand can cause an interruption in your cash flow, and can also make it seem like your business is bleeding money. This is money that I’m sure can be better spent on making improvements to your salon, or even having a “rainy day fund” in case of an emergency.

Keeping too much stock on hand can also cause you to spend more time than necessary on your inventory as well. This is time that can be better spent learning about new hairstyles or cutting techniques that can make you or your staff better hairstylists. Besides, I’m sure that there are many other things but you would rather be spending your time doing than counting inventory, like having the extra time to book additional customers, or even creating a better work-life balance by spending time with your family or friends instead of being tied up at your salon.

Use Software To Centralize Your Information

Five Best Salon Inventory Practices You Should Know

The final practice that I would highly advise putting into place is to get great salon management software for your business. This can help you to keep track of what you are using, what you are selling, and what is sitting on your shelves collecting dust. Good salon management software is capable of keeping track of the inventory you use in real-time, so it is always up-to-date and accurate. It will give you a better idea of what you have, what you need, what is selling, and what you and your staff are using. It can also let you know how much your inventory is costing you.

All of the benefits associated with salon management software will free up time as well as money, and ensure that you are ordering exactly what you need, and nothing more. This will make sticking to your predetermined inventory budget a breeze. Some salon management software can be quite pricey, but if it is used correctly, it should pay for itself several times over with the time and money that you will be able to save by putting this software to use. There are several different software developers that you can choose from, and it’s a matter of personal preference as to which one you like.


As far as inventory is concerned, we have learned that there are five basic principles that you should always practice in your salon. Determining an inventory budget, and sticking to that budget, maybe the most important of these practices. However, auditing your inventory is also a great way to stay under budget, while also being aware of when and how your products are being used. Shrinkage is the enemy of inventory and should be avoided at all costs. Remember, waste not, want not.

Keep in mind that when you are ordering inventory, more is not always better. You should avoid impulse purchases, and not overstock to prepare for a rush on a certain product. Finally, remember that technology is your friend. Use a good salon management software suite to help you keep track of your inventory. It will pay for itself several times over. Now that you know how to keep your inventory under control, you should be able to see a significant increase in the bottom line of your salon.

Related Questions

Best Operating Hours for Your Salon

What are some of the best salon management software suites currently available? Choosing the right software management for your salon is going to be a matter of personal preference more than anything. You have to find the software that is the right fit for you, your staff, and for your salon. You also have to take into account all of the things that you want the software to be able to handle. Here are some of the best salon management software suites currently available, according to Get App:

  • Squire Barber Appointment App. 4.8
  • Fresha. 4.9
  • ZENOTI. 4.5.
  • Mindbody. 4.0
  • Schedule Anyone. 4.5
  • BookSteam. 4.6
  • WellnessLiving. 4.4
  • 4.1

Is owning a hair salon profitable? While different salons will have situations that may have a drastic effect on how soon they are able to turn a profit, the average hair salon makes approximately $19,100 in profit every year. The average profit margin for a hair salon is 8.2%, while the average small business profit margin is 7.7%, and the profit margins for salons are increasing every year. On the low end, the profit margin for a hair salon is 2%, but it is 17% on the high end.


Looking to start your own Salon? Get the documents you need to get organized and funded here.

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.