Inventory ties up real cash
Product sitting on a shelf (backbar or retail) represents cash that isn't available for other purposes until it's used or sold. Overordering, even of product you'll eventually use, creates a real cash flow cost in the meantime.
Track usage, not just what's on the shelf
Understanding how quickly you actually use or sell each product lets you order appropriately — both avoiding running out (which can disrupt service) and overordering (which ties up cash and risks product expiring or going out of style). Use our Inventory Tracker to build this habit.
Do a physical inventory count on a regular schedule (monthly is common) rather than relying purely on what your ordering records suggest should be on the shelf — physical counts catch discrepancies (waste, theft, miscounted orders) that records alone can miss.
Backbar vs. retail inventory are different problems
Backbar product (used in services) is a cost factored into your service pricing; retail product (sold to clients) is its own revenue and margin category with its own inventory dynamics — track and manage them separately rather than lumping them together.
Reducing waste
Common sources of avoidable product waste include over-portioning during services, expired product, and poor storage conditions. Small, consistent improvements here directly improve your margins over time.
Don't let inventory management become purely reactive ("we're out, order more now"). A proactive system with defined reorder points prevents both stockouts and the rushed, sometimes more expensive ordering that comes with them.
Frequently asked questions
How much backbar inventory should I keep on hand? This depends on your usage rate and how reliable your supplier's delivery times are — enough to avoid stockouts without excessive cash tied up, calibrated to your specific reorder cycle.
Should retail inventory decisions be based on what I like, or what sells? What actually sells — track retail product performance and adjust what you stock based on real data, not personal preference alone.