How to Manage Inventory at a Beauty Salon

How to Manage Inventory at a Beauty Salon
Effectively managing inventory will help you reduce costs, optimise operations, and improve customer service. Here's how to manage inventory at your salon.
by Square Feb 06, 2025 — 6 min read
How to Manage Inventory at a Beauty Salon

In service-based businesses like beauty salons, inventory refers not just to the products sold, like hair care or skin care products, but also to the tools, disposable equipment, supplies and cleaning products used in daily operations. It might feel like there’s lots to consider when managing these resources, but with the right systems and know-how, inventory management becomes simple and seamless. Effectively running this critical part of your salon will help you reduce costs, optimise operations, improve customer service and ultimately drive profitability.

Below, we’ll explore the benefits of proper salon inventory management and some of the ways your salon can keep inventory management processes ticking over smoothly.  

What is salon inventory management?

Salon inventory management is all about keeping track of your salon’s stock of products and supplies. As a salon owner, it’s your responsibility to monitor and reorder stock. But there is more to the process than meets the eye. 

No matter the size or concept of your salon, it’s important you manage the inventory process efficiently to ensure the smooth operation of your business. With appropriate inventory management, you’ll be better able to provide services to your customers, ensuring a positive experience and increasing your chances that they’ll return. And for those salons selling retail products alongside their beauty services as an additional revenue stream, appropriate inventory management is critical at multiple touch points in your salon’s operations

The importance of efficiency in other parts of your business is often obvious, and you’ll probably know what steps to take. For example, you might already understand how Square Appointments can streamline your bookings and help build great customer relationships, but did you know it can also help with managing your inventory? This article aims to give you a clear picture of inventory management for your salon, to give you the same confidence you have in dealing with other areas of your business.

Distinguishing between retail and back bar inventory

First, it’s important to distinguish between your salon’s different types of inventory, as it’s important you track inventory levels for each.

 

Often, there will be overlap between the products a salon sells publicly and uses in its everyday business, but for inventory management purposes, it’s best to track their use separately.  

What are the benefits of proper inventory management?

With proper inventory management processes, your salon will benefit from cost savings, improved cash flow and greater efficiency across many facets of your business. Without effective inventory management, you might find yourself stocking unnecessary or slow-moving products, or facing issues such as spoilage, shrinkage and overstocking, all of which put pressure on time management, customer satisfaction and, ultimately, profits.

Efficient inventory systems will also mean less time wasted searching for inventory or having an appointment catastrophically interrupted when a product runs out mid-service. With the accurate data provided by management systems like Square Appointments, you’ll have visibility of the sales performance of each product, and you can track customer preferences and sales trends, letting you adjust your stock levels accordingly.

By adopting a best-practice approach to inventory management, you’ll be better placed to deliver the best possible service to your clients while increasing profits and minimising carrying costs. Ensuring you have all the products you need for your salon services and post-appointment retail will mean your staff and customers will encounter fewer disruptions, and your customers walk out the door looking their best.

9 tips for better salon inventory management

The benefits of effective inventory management for salons are clear. Below, we’ll explore nine tips – from inventory storage and presentation, to staff delegation and training – which will complement any inventory management software you choose to use.

1. Establish good practices for tracking inventory before it’s even ordered

To most effectively track inventory, salon owners should start considering their processes before the first order is even made. A regularly updated supplier database that lists information like products, prices, and delivery times and costs is a great way to stay across any fluctuations in your suppliers’ products and services.

You can also create purchase orders directly from your Square Dashboard to outline your order details, plan for incoming stock and seamlessly update your inventory data while taking into account any unexpected discrepancies like items missing from your delivery.

2. Create a system for keeping inventory tidy and visible

Your software is a critical part of your inventory management, but if you’re going to be able to account for your stock, you’ll need to be able to easily find and access it. You might consider using storage bins, shelving and labels to sort products and supplies, or you might categorise products by type or brand to make your stock easier to manage. 

3. Audit your inventory regularly

By regularly auditing your inventory, you’ll ensure you don’t run out of back bar or retail products and give yourself plenty of time to reorder when stock is running low. Regular audits also help minimise any shrinkage from shoplifting, employee theft, count errors and spoilage.

You should decide on a frequency that works for your salon: depending on its size and product turnover, you might audit weekly, fortnightly, monthly or quarterly.

4. Designate a trusted team member to be in charge of inventory

Unless you’re a sole trader, you might consider nominating a dedicated staff member to inventory management. Giving accountability to one person rather than multiple people might lead to fewer errors and could also serve as a training opportunity for an individual to gain inventory management experience. It might be an opportunity for you to upskill your team and show you value and trust them. 

Tip: Having two team members independently count inventory and countercheck each other’s results works for many salons. It’s more time-consuming but helps ensure accuracy.

5. Proper staff training makes all the difference

If you’ve invested in inventory management software, established your supplier database and made your salon storage easy to access and navigate, the next step is to train your staff in your new inventory processes. They’ll need to understand your systems around storage, handling and tracking, and know how to record any changes to inventory levels. This can be made easier with an inventory management system like the one in Square Appointments.

6. Use service cost tracking to understand how much each service is costing you and when to reorder necessary back bar products

It can be difficult to track specific inventory items once they’ve been placed into back bar use. Regular audits help meet this challenge. But salon owners can also calculate the cost of each discrete service by determining the products and their quantities required to deliver it. 

The aim of this type of service cost tracking is to ensure the profitability of each service your salon offers. For example, if you calculate that a hair wash uses 15 mL of shampoo, then a 1-litre bottle should last you about 66 washes. 

If you’re running out of a product sooner than you expect, then you might have a problem with costing. This might be caused by a staff member using more product than they should per service. Or, it’s possible that shrinkage from product loss, theft or spillage is having an impact. 

To stay on top of this, consider training staff on smarter product use, setting clear guidelines for handling and dispensing products, and keeping high-value items secure. Integrated apps in the Square App Marketplace can also give you even more control and insights. For example, Vish is a colour management system for hair salons that helps reduce colour waste and can eliminate the need for manual inventory management.

7. Establish reorder points

By predetermining reorder thresholds for different products based on the rate at which you use or sell them, you’ll prevent your salon from running out of key back bar stock and disappointing customers looking to purchase your retail products. Reorder points help ensure that you place an inventory order before you run out, meaning fewer service interruptions and a decreased risk of overstocking.

You’ll need to take into account your average daily usage of each product (or usage per service), the lead time it takes to receive a stock delivery, and how much of a buffer of safety stock you can afford to keep (and fit) in your salon. To simplify the process, you could use the low-stock alerts feature from your Square Dashboard, then create vendor purchase orders directly from your dashboard to reorder.  

8. Use a FIFO system for perishables

You should consider using a first-in, first-out (FIFO) system for your perishable products to ensure older stock is used before new stock. This is critical for products with expiry dates. It’s important to train staff in correct FIFO product handling to minimise wastage.

9. Keep your retail shelves looking their best

You’ve invested in your salon and your inventory management is efficient and effective. Now, you need to make sure you present your retail stock appropriately to help it look as good as your clients will when they walk out after their appointments.

You should place your best-selling products at eye level and look for other ways to optimise sales through Square Marketing, sales techniques like upselling, special offers and promotions. For example, a loyalty program managed by Square Loyalty might involve discounts on certain retail products. You might also employ these techniques to help sell any slow-moving or obsolete products, or those that are nearing their expiry date. Importantly, as a part of your salon inventory management, you should discontinue any products you struggle to sell once you’ve sold your initial batch of stock.

Whether you run a hair salon, a beauty salon, or other health and beauty services, Square Appointments makes inventory management simple and seamless. By ensuring you know how to manage your salon’s inventory, you’ll be setting your business up for success. 

 

Square
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