Operating a beauty industry business can be a lucrative enterprise. To ensure the best possible outcomes as well as ensure annual growth, there are very many variables to consider. Some of these include types and quality of services, business environment/atmosphere, customer retention, marketing methods & programs, policies & procedures, management expertise, sales and buying practices.
For this blog, I want to focus on a tip regarding buying practices.
Your purchasing strategies, inventory procedures and suppliers can have a huge bearing on the profitability of your business.
Some good purchasing habits I would recommend for best possible outcomes include;
- Have a pre-planned purchasing program
- Assign one person only the responsibility of implementing and monitoring all purchases
- Select few, excellent suppliers and develop great long-term relationships with them
- Choose suppliers that are either located close to your business locale or that have well established and efficient shipping methods/rates
- Focus on quality products from suppliers that excel in customer service
- Buy smart
Let’s look at buying smart. Again, buying smart entails many aspects including choosing the right suppliers, understanding your inventory and product demand levels, selecting quality products from dependable suppliers and monitoring and reducing costs.
My tip? Watch for and take advantage of your supplier promotions whenever you can! A huge reduction in annual inventory expenditure can be accomplished if you do.
Product ‘A’ is on promotion right now at 15% off.
You require an average of 8 units of product ‘A’ every month for
implementation of your services and aftercare retail sales.
Product ‘A’ regular price is $50.00ea, and Right Now it’s $42.50ea.
The promotion ends this month and is only available while supplies last.
Let’s do the math together:
Promotion: 8 units x $42.50ea = $340.00 (1 month supply)
Regular: 8 units x $50.00ea = $400.00 (1 month supply)
Your pre-planning tells you that if you changed nothing about
your methods to improve or add to this requirement, you would
require 48 units of product ‘A’ for a six month time period.
Promotion: $340.00 x 6 months = $2040.00
Regular: $400.00 x 6 months = $2400.00
SAVINGS ($ 360.00)
Note the savings are equivalent to nearly an entire month of regular priced product ‘A’ units.
Now, multiply the full spectrum of products required for your business that you know you will turnover monthly, and you will see how this small tip implemented faithfully could save your business thousands of dollars annually.
Also, you are protecting your business from the possibility of future product price increases during those six months of inventory, plus you are assured you don’t miss out on product availability if the supplier runs out during the massive demand that is often experienced during promotion periods.
Keep in mind this same principle works for buy-one-get-one deals, gift with purchase, and many other promotional offers available.
One other quick tip; develop that relationship with your supplier. Talk to them, tell them your business buying plans and negotiate volume product purchases whenever you can. Between that and the promotions, you’ll be well on your way to increasing your business profits and growing your company.
To conclude, my bottom line for your bottom line is this, Buy Smart, Buy Now. Especially if your product is on promotion.