Managing inventory during inflation!

The theme for this article came from a client I like to call a friend. We’ve been around the block in this industry for a while together now, and I highly respect her. When she made a suggestion on writing an article on inventory control, I thought it was a great idea but wanted to do some research as to different programs which were offered in our Salon Industry.

However, in doing some further pondering, I thought “ya know what? Inventory control IS a great topic”. It is a great topic because we are in very scary times right now, and we are caught between a rock and a hard spot. How do we manage our inventory when prices keep rising and inflation is the highest it’s been in decades? And, we truly don’t know what $$$ clients will be spending to accommodate their cut backs yet…..we need inventory to work and we need retail inventory to boost our income.

I took a whole bunch of Business classes during my working career. Both in my previous life as an owner of an Office Supply Company and my current life in the Beauty Industry.

There was no better lesson however, then the lesson I learned on inventory control during covid. Dealing with rising prices, shortages and discontinued items totally and completely threw my inventory control system out the window.

I had to trust my record on determining future sales. I had to resort to a 90 day turnaround time in lieu of a 30. I had to pull resource after resource in an effort to keep my shelves supplied with the items I knew my clients needed or what I anticipated they would need.

knowing

If there is one thing I am sure about when it comes to inventory control…..know your clients!

Knowing and “anticipating” the needs of your clients before they even know it, or need it themselves, will help you maintain levels needed. And, during trying times like we are in now, we have to balance ourselves between what the Business can support and what you “think” your clients will need.

It’s tricky and scary at the same time.

The balance between your numbers, and your actual numbers and your clients is very tricky to maintain.

Any wrong move can put you in a situation with no inventory. Or, it can put you in a situation which you have excess inventory.

Covid is a great example of what can go wrong. Mask and face shields were never part of my repertoire. I over estimated and ended up with excess. However, I had no history of this inventory item. I only had my clients and what I could anticipate selling.

What I failed to take into consideration is EVERYONE got on the face mask band wagon. The market was saturated.

magic

Yet, when it came to items in my warehouse like LCN & Footlogix, I knew my numbers and I knew my clients.

Just when you think that is enough, you then realize you have to look out further for your turnaround. I run a tight ship. I turn my inventory in 30 days. I had to extend that to 90 days.  Which meant I was placing larger orders during slower times. Hence with large orders came large invoices.

It was very scary. It was a Business decision based on everything from my knowledge of Business to financial management.

Fast forward to 2021 when we still have residue from the past, we now have shortage of parts and materials. The supply chains have been more backed up than ever which causes a whole lot of price increases.

We have more jobs than people who want to work those jobs because many have been paid to stay home. All their self worth has been taken away from them.

All of the above and more cause the rise of goods and services to continually increase. Business expenses make it difficult to show a profit. Running a Business under these conditions requires a strong will and perseverance.

 

What does any of this have to do with retail?

Providing retail should be treated like a Business within a Business. It should have an inventory accounting system. This system needs to be accessible from out of office. Why? Because we are Nail Technicians, Salon owners, Hairstylist, Make-up artist. We live by appointment and then try to do everything we can  when we can.  We do it when we think about it regardless of what day and/or night or what time.

You may want to participate in our Free Freight Friday each month. Yet, you think about it the Wednesday before..right after you left the office for the rest of the week. And guess what?, you didn’t check your inventory.

If you had an inventory management system which you can access when away from your Salon, you can do you Business wherever you want and whenever you want.

Running your retail like a separate Business you can “loan” start-up monies which the retail Business pays back to you over time…with interest.

Once the retail get’s started, you know you will always have monies in that fund to rebuy and continue to build your retail.

Before you know it, your retail is providing you with more than you ever imagined.

THAT is how to manage your retail and your inventory during inflation;

  • Know your numbers
  • Know your Business
  • Know your clients
  • Trust your experience or pull in resources you trust

Lastly, you have to anticipate. Remember the #1 sign of an excellent Manager. Being able to solve a problem before it even happens.

There are many great accounting systems available for you to manage your inventory control. I know square is one of them and many of my clients use it. There are many. If you have a favorite one, please put the name in the comment box. I’m sure there are many who would benefit from knowing.

Thank you Michelle for a great suggestion. I sincerely appreciate it. When you’ve written articles for as many years as I have, any topics for suggestion are welcome.

CJ Murray, President

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6 thoughts on “Managing inventory during inflation!”

  1. The article was very helpful. Thank You for sharing your thoughts and information. This has been a trying times for us all but we’re still here. I appreciate your honesty and thoughts about what we’re going dealing with our inventory. Thank You.

    1. Absolutely, you are welcome. Business in itself can be very challenging. Throwing in many more unexpected challenges sure test us right? Thank you Karen and Happy Birthday 🙂

    1. That school of hard knocks is the BEST. Thanks for sharing a name. I hope maybe it helps someone who’s searching.

  2. Yes, I am taking my business more serious including retail. I am learning about inventory and pricing.

    I just switched to Acuity scheduling, and I like it. I may consider square in the future, but for now I am happy with acuity since it was cheaper than varago and with more benefits. I had to cut back on business expenses, and I started there among other things I am hiring a business coach soon to help me during these times owning my first business.I have find ways to cut back, become more resourceful, and see what works and doesn’t work for me.

    1. Step by step…so proud of how you have taken all your decisions slowly in managing your Business. You should be very happy and proud of yourself.

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