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by Douglas Preston
Of the many important decisions any esthetician or spa manager must make, adding a new product collection to your present inventory ranks high among them. The move poses far more significant business impact than merely finding extra shelf and storage space for the stock. This article is intended to help you understand the full implications of product expansion and how to proceed wisely when doing so.
 To begin with, let’s assume that concerns of results and efficacy with your prospective new products have been satisfied. You’ve read the information, tested the formulas, and are confident that the products will deliver on their promise. The new vendor has a solid reputation for quality and customer service. That done, the question remains: should you invest more of your money this way? As a seasoned former spa owner with a multi-million dollar service and retail sales history, my intention here is to provide you with a checklist of business-minded items to help guide your decisions. This is the same tool I use in my spa consulting practice when helping clients determine their product needs. In the end, however, you’ll have to rely on your skills in treatment method, retailing and marketing in order to make any product line successful in your spa. Good luck!
Product Evaluation Worksheet
Using a pro and con basis for guiding your product planning you can draw from the following list of considerations to help you make a prudent choice. To make this process work well for you it’s important to understand the difference between a true business (financial) and an emotional (feeling-driven) motive for making a new investment in your company. Remember: the money you spend on your business must be returned, with interest, through client and sales growth that result in increased profit. The point is—are you spending money for fun or financial gain? Few businesses have much fun money lying in their bank account.
1. Do we really need another product line?
How will the purchase of this line help my business with: |
- attracting and retaining new customers
- increased retail sales (Will it automatically make employees better sellers?)
- increased business profits (Remember, sales do not always turn into profit.)
- better treatment results
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2. What’s wrong with what we already use and sell now?
Is my current product line truly limiting our business success in some way? |
- Are customers unhappy with them?
- Have there been numerous treatment reactions to them?
- Are employees dissatisfied with them and, if so, why?
- Are customers consistently asking for something new and better, causing us to lose sales?
- Am I responding to a true need for new product or am I feeling pressure from my employees to buy them? Are they simply bored with present product and methods? What’s to prevent this from happening again later? If I am adding this product to satisfy the demands of a particular esthetician what happens if she quits? Is there a better way to respond to this?
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3. How do I justify the cost of building up more inventory?
Adding new products immediately requires locking up more of my company cash into professional and retail stock. Can I afford to do this? |
- Will we be reducing the on-hand level of our present product line?
- Does the new line fill a high-demand niche that we’ve been unable to meet?
- Do the new products offer a higher markup over cost, provide valuable training, or protect our business from expanding competition in some way?
- New products require additional employee training, service changes, and a shift in focus from our existing line(s). Will sales actually increase or will we only be turning our attention from one product to another (more inventory expense but with the same level of retail sales)?
- Will the new products build my business equity (sellable worth), or theirs?
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4. If I do buy the new line how much of it do/should I order?
It’s a large line and the product rep. recommends a big push to get the products established with employees and customers. How do I know what to do? |
- Should we build up gradually or go all-out?
- Would it be wiser to add only the anti-aging or acne portion of the line to augment our present products?
- Am I being subjected to huge minimum order requirements?
- The company has an opening order “package” but do I really want or need everything they have listed in it?
- Will the new products cause our existing stock to age and prove difficult to sell?
- Do I need to borrow money to make this investment. Is that wise?
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| 5. What are the consequences for my business if: |
- the products cause client reaction problems?
- the new products don’t result in increased service or retail sales?
- clients can find these products at a discount on the internet or at Sephora?
- the company is suddenly sold to L’Oreal, Estée Lauder, or LVMH?
- I want to drop the line at some point but have added their signature services
on my spa menu?
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 Every spa manager and esthetician must, ultimately, make a crucial product buying decision according to one’s own values and desires. Sometimes we will simply decide to buy something new because it suits our personal and professional interests. There’s nothing fundamentally wrong with any of this. But, in business, we do have an overriding financial reality that should get a serious and fair hearing before any significant buying decisions become commitments and contracts. The list of considerations I’ve provided in this article will, hopefully, help you prevent making a spur-of-the-moment or impractical investment where a more reasonable alternative would work as well or better for you. To conclude, let me offer you my principal management “don’ts” when considering heavy purchases in spa products or equipment:
1. Don’t buy on-the-spot something you’ve never seen or heard of before! Get more information, ask for references, get a “test drive”, wait a while and see if the lust for ownership sustains over the following few weeks.
2. Don’t allow employee pressure (either unbridled enthusiasm or glum petulance) force a buying decision. This is your money, your business, and your responsibility that’s at stake here. Choose coolly, and wisely.
3. Don’t feel a need to justify your caution or concerns. When in doubt, wait.
4. Don’t allow emotion to serve as your source of business wisdom. Leaping toward a positive feeling often leads to poorly considered choices, and multiple marriages.
5. Don’t allow company boredom to force new purchases. What you need now is to rekindle your interest in your career. There are many ways to get excited about your work again that doesn’t involve deep spending. Invite an inspiring speaker to address your team or attend a career-building class. That may be all that it takes to put a new (and economical) polish on your existing business and products.
There are many wonderful and intriguing new products arriving weekly in the spa world. You’ll want to explore them with curiosity and freedom from the need to buy as you try.  You’ve got a lot of years ahead of you in your ever-expanding spa career—just think of what’s out there waiting to be created and debuted. Always keep an open mind and a vacancy on your wish list. Success in business comes to those that do best with limited resources, not those that throw money at ideas and impulses.
My best,
Douglas Preston
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