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How much profit do you really make on your stock?

We all know about what is sometimes euphemistically called Stock shrinkage, which in reality is theft, either by shoplifting or employee theft. There are various things you can do to reduce such losses but it is an unfortunate fact that it will happen unless you choose to lock all of your product up, which is not always helpful in selling goods.

The Other kinds of stock losses

There are at least three other major kinds of stock losses that are less obvious. All of these losses recently came to my notice when meeting with our clients:

1. Giving Away stock – It’s so easy to do. The salon owner had several people in the salon and a regular client asked for a product and the owner under a little pressure told the client to fix him up later. About month later when visiting the salon, I asked out of curiosity, if the client had paid for the product he took when I was last there. The owner had completely forgotten he had given product with a retail value of $30.00 to a client. Money lost forever and he didn’t have any way of realising he was down in stock because he doesn’t keep records of what he has bought and sold.

2. Lost Sales – This has happened with my own, sole trader, salon. If you run out of stock and a client asks to buy the product, you can’t supply it and if it takes a week to order it in, guess what? Most clients will go and buy it elsewhere and will in all likelihood buy it from there in the future. You lost sales because you weren’t managing your stock and ensuring new product was ordered considering the resupply time. I have now bought over $400.00 of product elsewhere because of his poor stock control, which is his loss.

3. Overstocking – This one is actually the scariest and is one my business partner came across last week with a new client. The salon is carrying more than 12 months stock with a value of $100,000.00+. Not only has the owner tied up a large amount of cash in product they have also purchased it on their overdraft and are paying interest on stock that may take more than 12 months to sell. Some slow selling items may never be sold or will have to be sold at a loss.

Salon Manager is now implementing stock control into the salon. Every time a product is sold it is automatically deducted from the stock when an invoice is generated. Invoicing data will form a report as to how quickly a product is selling. The stocking system can be set as to how long a supplier takes to deliver new stock from the re-order date. Stock level alerts will immediately alert the owner to when levels have reached a minimum required before re-order.

Data analytics in our system should enable the salon to reduce the stock it is carrying to one tenth of current levels. No need for a big overdraft and loss from paying interest.



Implementing Nebula Salon Manager Stock and Inventory control, no matter how big or small will enable any salon from a sole trader to a salon chain to control and manage their profitability from product sales like never before. It takes time to set up initially but the reduction in loss and improvement in profit are enormous. Bigger salons may well more than pay for Nebula Salon Manager, just from better stock management.

One final further benefit in having good stock control is that if something unfortunate happened to the salon, you can provide your insurer with a complete breakdown and valuation when you make a claim. How many businesses can do that?

Visit www.salonmanager.com.au or email us at sales@nebula-ims.com.au or call us on 0497 002 124 to arrange a demonstration and trial.