Salon Retail Sales: Recommend at the Chair, Price for Margin, Stock Less

Every stylist has watched a client undo a good result at home with the wrong product. Turning that into retail sales feels awkward, because nobody became a stylist to sell, and clients can tell a recommendation from a pitch in one sentence. The fix is to make the product part of the service, so the recommendation is advice the client paid for.

This guide covers what to say at the chair, how to choose and place a short range, how to price it and work out the margin, how to pay commission on it, and how to keep it from expiring on the shelf. Figures are in US dollars; the maths is the same in any currency. Every number in the examples is an assumption, not a benchmark.

#Is retail worth the effort for a salon?

Yes, as long as you know what it is for. A product earns you less per dollar than a service; in the example below, about half as much. Its value is that it needs almost no chair time, so a product sold to a client who is already in your chair adds profit to a visit whose rent and wages are already covered.

The treatment leaves about twice as much per dollar, but it took 45 minutes of a stylist and a chair. The products took a conversation. So treat retail as a margin on top of a visit, and never discount a service to move a product.

There is a second payoff. A client who keeps a good result between visits judges your work by it, and a colour that holds for six weeks says more about your salon than one that fades in two.

#How do you recommend products without a sales pitch?

Use four sentences: what I used, why it suits you, how to use it at home, and what it costs. That is a prescription. It starts from the client's hair or skin, so it sounds like the end of the service rather than the start of a sale.

1. Ask before you start. "What are you using at home at the moment?" Note it on their record.
2. Use the retail product at its step, not an unlabelled backbar tub, so the result the client sees comes from a bottle they can buy.
3. Name it as you apply it. "This is the mask I use on lightened hair. Feel the ends."
4. Prescribe at the mirror. One product a visit, two at most.
5. Put it in their hand. The stylist hands it over at the mirror and the front desk rings it up.
6. Take no for an answer. Note it, and don't raise it again until their hair or skin gives you a new reason.

When a client says they already have products at home, the best reply sells nothing: "Bring them in next time and I'll tell you which ones suit your hair." If they do, you go through the bag together, and any recommendation you make is one they asked for.

#How many products should a salon stock?

Start with ten to twelve, chosen by the problems your clients bring in rather than by brand: one or two products for each of your five or six most common concerns, all of them products your stylists already use at the backbar.

In each concern, carry an entry product and a premium one, and a travel size wherever the brand makes one. A small size turns a maybe into a first sale.

#Where should retail go in the salon?

Put a sample where the recommendation happens, at the station, and the stock where the client pays. A beautiful shelf by the door that nobody stops at sells less than a plain one beside the front desk.

Price every item on the shelf: clients who have to ask a price often don't. Group by concern rather than brand, keep the display full but not crowded, and dust it weekly. Keep the most expensive items in sight of the desk.

#How should you price salon retail?

Brands usually publish a recommended retail price. If your trade price is half of it, selling at that price doubles your cost, which retailers call keystone, and leaves a 50% margin on the price before tax. Whether you must follow a brand's recommended price, or a brand can make you, depends on your local competition rules and your account agreement, so check both before you price differently.

Markup and margin get mixed up, and the gap is large:

Margin = (price before tax − cost) ÷ price before tax × 100. Markup = (price before tax − cost) ÷ cost × 100.

Ask your accountant three questions about tax: the rate on each product, which can differ from the rate on services; whether your shelf prices must include it; and how tax you pay on stock bought for resale is treated.

What slow stock costs you

Margin is what a sale earns. Stock you hold costs you whether it sells or not: the cash tied up, products that expire or get damaged, and testers.

Days of cover is stock at cost ÷ the cost of retail sold per day: $8,000 ÷ $66.67 = 120 days. A product with more days of cover than shelf life left will expire before it sells.

#How much retail commission should stylists get?

Pay a separate retail rate on the price before tax, set from your retail margin rather than your service rate, credited to whoever recommended the product, and reversed on returns. Choose the rate by deciding how much of the margin to share:

• Credit the recommender. If Daniel prescribes a mask and the client buys it at the desk next week, the commission is his. Record his name on the sale.
• Desk sales belong to the desk. A walk-in who picks a shampoo off the shelf earns the front desk the retail rate.
• Reverse on returns, and pay nothing on staff purchases or testers.
• Reward reach. A small monthly bonus on the share of a stylist's tickets that include a product rewards recommending to more clients, rather than loading a few. Read it alongside how many of their new clients return.

Our guide to salon commission structures shows how a retail rate sits on top of service pay, with a policy you can copy.

#What do you say when a client can buy it cheaper online?

Don't race the internet on price. Sell what it can't: the advice, the certainty that it's the right product and a genuine one, and having it today. If the client still prefers to buy online, let them, cheerfully, and note what they bought so you can ask how it went.

If one product is constantly undercut, take it up with the rep, and consider a product from a brand that sells mainly through salons. A short range makes that easier: you are replacing one bottle, not a wall.

#How do you keep retail from expiring on the shelf?

Count retail weekly, sell the earliest dates first, list everything that expires in the next 60 days once a month, and take off any product that hasn't sold in 90 days. Retail leaves in whole units on a sale, so every gap in a count is a unit you can name.

• Read the jar symbol. Many products show an open jar with a number such as 12M: the months it stays good once opened. Use it to date your testers.
• Date everything on arrival, and stack new stock behind old.
• Act at 60 days, not at expiry. Recommend near-dated stock first, use it for testers, or send it back if your supplier agreed to that. Never sell a product past its date.
• Set a minimum and maximum per product and reorder at the minimum, so the shelf never looks empty and the back room never fills up.
• Watch sell-through: units sold in 90 days ÷ (units on hand at the start + units received). If a product stylists say they like sells slowly, check whether they actually use it at the backbar.

Retail share sits naturally among the salon KPIs to track each week, and the way it lifts your average ticket alongside add-ons is in how to increase your salon's average ticket.

#Write a returns policy before you need one

Put a short, fair policy on the receipt and on a card at the desk. A client who knows they can bring back a product that didn't suit them buys it more easily, and a written policy stops the desk making it up on the spot. Consumer rules on faulty goods differ between countries, so check your local rules before you write yours.

Retail is one line on your P&L, and our guide to how profitable a salon is shows where it sits among the others. More guides like this one are in Fully Booked's international edition.