Skip Williams has been crunching the numbers of too many spas and day spas to believe the gobbledygook most manufacturers throw out to their owner/managers clients and anyone else within shouting distance who’ll listen.

You’d have to be living under a rock not to know the party line about selling professional products. The manufacturers hound you by shouting:

• You’ve got to sell retail – because it’s an integral part of the service. It’ll finish your look…
• You’re actually doing your clients a disservice by not having them buy from you.

Then someone throws around a magic set of “statistics” about the client who purchases retail from the salon/day spa being x% more likely to return to the salon again – or that clients who buy retail are the best clients. On this I could be wrong – maybe there is a survey that shows it to be true – I just haven’t seen it. As my late Uncle Nathan said “liars figure and figures lie”. As chairman of a large beauty salon company Uncle Nathan didn’t suffer fools gladly either.

I’ve worked with plenty of salons and day spas whose retail sales were nothing to right home about, let they make a very healthy profit. Sure, every one of them perhaps make even more money by having a healthy retail program but they’ve chosen not to put their full energy behind it.

So I couldn’t agree more with Skip’s point of view - first to focus your time, energy and resources on your service business…why? Because not only can you make a good profit, but it’ll make the selling of retail products into your business a heck of a lot easier, profitable and productive…

Too many salons/day spas are looking for the quick fix, the silver bullet, and are pleased as punch to sell that balm to them. But frankly with few exceptions (Aveda is one of them & I’m happy to tell you why I believe that at another time) they’re more than happy to have you max out on your credit card by ordering their products.

Remember, I never said that you won’t make money selling retail products…you can and I believe you should. It’s just don’t buy the myth that retail is the only way out of a business that hasn’t been as profitable as you want it to be.

It does upset me though when I see major product companies pushing around unsuspecting Spa Owners, forcing them to buy far more products that then need, automatic deliveries, unreasonable opening orders, etc.

Spa Owners need to remember who is in charge of their business, and not let these companies run the Spa or dictate what the Spa “should” be doing. In my consulting I see this everyday, Owners who are afraid to upset their employees, they let vendors push them around, and then wonder why their business is in trouble.

Can we all agree to start a campaign of Owner’s to “take back control of their business”, what happens inside the four walls, and not be bullied by employees and vendors alike.

I don’t mean to sound like I am scolding business Owners, but it is high time they get back into the driver’s seat and drive their business toward success. Make that Spa the “Dream” that they envisioned when they started the business, and remember that NO ONE BENEFITS is the business struggles, not the employees, not the customers, and not your children's college fund.

There is only room for ONE CELEBRITY inside YOUR business and that is YOU!

Best Wishes & Healthy Profits
Skip Williams
Resources & Development

I focus on service sales and repeat business and I find that what I have gained is less advertising dollars spent which can equal the amount of products that I may have sold in this time period.

The idea of converting up to 50% of total sales to product sales is an invention of the skincare industry.

Skin care and nail products are a different story. With so much hype on t.v. about the latest skin "miracles," etc., it's hard to get clients to purchase products. I don't believe in making the treatment about selling so relaxation is the first order of business. At the end of the service I'll usually talk to my clients about my findings and then discuss products and usually can recommend at least one thing that they'll leave with.

So, now I'll focus on pushing my staff to get their clients to reschedule before they leave and focus later on them selling. Again, thank you for making sense and opening my eyes.

Regards,

Peter
ALEGRIA Bodywork & Day Spa
San Antonio, Texas

According to the new “Marketing Demographics or the Day Spa Goer” report, only 3.9% said they will spend 50% or more of their total visit on “home care”, 30.9% said 25% and a whopping 65.1% said the they will spend NONE.

Our experience looking at the books of scores of Spas around the country is that most Day Spas ratio of retail to service is less than 15% and Resort Spas are less than 8%. That does not mean there are not plenty of Spas doing far more than those amounts, but the reality of the matter is that very few accomplish higher conversions than that.

So why all the hoop-la about retail within our industry? The product companies would have us believe that that is where the profit is, frankly they are wrong, and I am the heretic for saying so. If you focus on the retail side of your business in hopes to make up for lack of profitability on the service side of your business you will find yourself in DEEPER trouble than before. The service side has to be well run, filled to capacity, and profitably before anyone should think about enhancing retail, and here is why:

Think of your service inventory of rooms and providers as bottles of products that you sell, in very much the same way you might sell retail. The difference is when you are selling retail products and you fail to sell a bottle on the shelf then you have not lost money, that bottle is available to sell tomorrow also. However the inventory of service capacity that you have is lost and gone forever, it is as if you threw away any inventory that was not sold and took it to the dumpster at the end of the day.

There is also a myth in our industry that “retail dollars” are more profitable than “service dollars”. Nothing could be further from the truth, if you think about it I think you will agree that wholesale product cost, plus shipping, plus retail commissions adds up to almost 70 cents on the dollar which is roughly the same as what the average Spa makes on a service dollar. The difference is that service dollars come in much greater volume and therefore the repeat service client is what we need to make our business sustainable and profitable.

An interesting point learned from the above mentioned survey is that many Clients said they were turned off by retail, they say that they went to the Spa for relaxation, and were put off with anything more than a mention of the products. Many said that next Spa visit they would go elsewhere. It should be mentioned of course that some people love to purchase products and that shopping in itself is therapy for them, particularly younger generations. The lesson here, I believe, is to design an approach to retail that is more consultative than in your face.

Folks, if you’re focusing on the retail side but your service side suffers then it is like a Doctor focusing on your hang-nail while you have cancer. And IF I am wrong about all this, and the money IS in the retail then you should close the Spa and open a beauty supply store!

Having said all that, retail is a fine supplementary business that will naturally grow as your service business grows, and when you feel like everything is running perfectly, and you could not squeeze another dollar out of the service sales then my friends feel free to focus on the retail side of your business. Until then always be thinking “Rebooking before Retailing”.

This advice has little to do with “Retail on-line” but I felt that this recent focus on retail that we are told will save our businesses is dangerous for most Spas that struggle and will only save the product companies rather than our own.

There I said my piece, many of you will disagree with me, but I see this daily with Spa businesses and see the trouble retail hath wrought.

Best Wishes & Healthy Profits
Skip Williams