Thriving Stylist Podcast #416

End Of Year Retail Strategy Every Salon Should Be Using

Host: Britt Seva
Date: December 15, 2025

Overview

In this episode, Britt Seva shares an actionable, step-by-step end-of-year retail strategy designed specifically for salon owners and suite stylists. The goal: to maximize profitability, optimize inventory, reduce tax liability, and ensure the continued health of the retail side of a salon business. Britt emphasizes the importance of treating retail as a secondary revenue stream and provides practical advice to reassess, clean up, and reinvigorate your retail program as the year closes.

Key Discussion Points & Insights

1. The Evolving Importance of Retail in Salons

Britt sets the context by addressing the beauty industry's evolution:

• Reputation and referrals alone are no longer enough to thrive.
• Quote: “Cutting and coloring skills will only get you so far, but to build a lifelong career as a wealthy stylist, it takes business skills and a serious marketing strategy.” (01:09)
• Retail is a critical, often misunderstood, revenue stream for salons.

2. Retail Review: Why Now?

• End-of-year is a strategic time for retail review—ideal for tax planning and annual goal-setting.
• Four Core Benefits of This Process (03:54):
  1. Maximize tax savings
  2. Thin inventory of non-sellers
  3. Evaluate the health of your retail program
  4. Assess commission structures and program profitability

3. Treat Retail as a Standalone Business Unit

• Many salons fail to analyze retail separately, which hides problems and missed opportunities.
• Quote: “If we are able to look at retail as truly a secondary business... it allows us to make much smarter decisions about just that section of our business in general.” (06:05)
• Suggestion: Regularly conduct focused retail reviews rather than clumping everything together.

4. Step-by-Step Year-End Retail Inventory Process

a. Prepare Your Inventory List (09:28)

• Print a full inventory report from your salon booking system.
• Must include all retail products, not back-bar or station-use items.

b. Physical Count (10:40)

• Manually count each retail item on shelves and in the backstock.
• Use a detailed checklist for accuracy—get help if necessary due to the size of your collection.

c. Reconcile Discrepancies (14:52)

• Compare physical counts to the system report: identify missing, extra, or erroneous items.
• Quote: “Those five missing bottles can be counted as a loss on my tax return. So it could be a tax write off. It’s shrinkage within the business.” (16:04)
• Update the inventory system to reflect actual stock.
• Complete this process in one day to avoid confusion due to ongoing sales.

d. Address Shrinkage and Record Losses (16:45)

• Document all shrinkage for tax purposes—those are deductible losses.
• Ensure the software record is current for potential insurance claims or audits.

e. Update & Audit the System (18:00)

• Run a new inventory report after adjustments for timely, accurate records.
• Add any missing SKUs/products that haven’t yet been entered in the system.

5. Analyze Sales Reports for Smarter Stocking

a. Run Sales Reports for Three Timeframes (21:09)

• Last year
• Last six months
• Last 90 days
• Looking for sales trends, product movement, and performance anomalies.

b. Segment Inventory for Strategic Action (22:30)

• Top 20%: Fastest sellers; keep fully stocked.
• Middle 60%: Moderate movers; keep a modest, just-in-time supply.
• Bottom 20%: Slow/non-movers; phase out, discount, or return to vendor.
• Quote: “The bottom 20... become discount, kind of like foreclosure products that we’re going to phase out of our program completely.” (24:30)

c. Sales Patterns and Stocking Logic (25:12)

• Don't stock based on old trends; focus on what's currently selling.
• Avoid both overstocking (cash tied up) and understocking (missed sales).

6. Calculating and Understanding Sell-Through Rate

• Definition: Sell-through rate = Percentage of stocked retail that actually sells within a given period.

• 80%+ = Excellent
  40–70% = Moderate (needs tightening)
  Below 40% = Big red flag (retail stagnation; cash stuck on shelves)

• Application Example (27:43):
  "If you consistently have 25 or 30% of your inventory not selling, your margin gets crushed."

• Caution: Reinvesting revenue from slow-moving inventory is a common trap.

• Memorable Example:

  • Hailey Bieber’s Rhode brand launched in Sephora and sold out instantly—not because it was new, but its sell-through showed true health and demand.
  • Quote: “Do you think Sephora was mad that they sold out? I promise you they weren't. They were thrilled because what does it indicate? Health of a program, interest, desire.” (31:02)

7. Assessing Profitability: Sales, Commission, and Inventory

• Case Study Example (33:25):
  • $51,000 in annual retail sales, $30,000 spent to restock, $5,100 in stylist commissions, but $12,000 residual inventory—leaving the owner with only $4,000 real profit, not $16,000.
  • Moral: “If you consistently have 25 or 30% of your inventory not selling, your margin gets crushed.”
• Regular, honest review is necessary to ensure your retail is truly profitable.

Notable Quotes & Memorable Moments

• "Debt isn’t beautiful." (30:18)
  Britt reminds listeners that full, impressive shelves are costly if they’re not moving product.

• On shelf aesthetics vs. profit:
  “Would you rather have three full shelves and $18,000 in retail tied up or two full shelves with $11,000 tied up?” (30:48)

• On the need for business acumen:
  “What good is a license and an entrepreneurial passion without the skills and knowledge to actually make big things happen?” (01:27)

Timestamps for Key Segments

• 00:00–03:30: Opening, setting expectations, recommended previous episodes
• 03:54–06:10: Four benefits of end-of-year retail inventory
• 09:28–18:00: Detailed annual inventory process walkthrough
• 21:09–26:30: How to analyze sales reports to make strategic stocking decisions
• 27:43–31:45: Understanding and improving sell-through rates
• 33:25–37:00: Calculating real profit; the importance of honest assessment on retail
• 38:00–End: Final encouragement and key takeaways

Tone & Language

Britt's tone is encouraging, practical, and direct—empowering her stylist listeners with both granular tactics and the big-picture “why” behind retail strategy. She speaks from both her experience as a former salon manager and a coach/consultant to stylists and salon owners.

Summary Takeaways

• View and manage your retail as a unique business that deserves focused analysis and care.
• Regular, systematic inventory and sales analysis are the backbone of profitability.
• Use tax write-offs for shrinkage, phase out non-performers, and stock according to real sales—not hunches or old patterns.
• Sell-through rate and cash flow are more important than how nice your shelves look.
• Don’t overpay commissions on product that isn’t really profitable.

Britt encourages all stylists and salon owners to “take these last few weeks of the year to really take a good hard look at your retail program... make a good plan for the year ahead.” (37:45)