Have you done a Skincare Product Profitability Audit?
Sounds boring and tedious. The word audit alone sounds like a downer.
For us creative types, we most likely skipped over this and went on to something else already.
If you are still with me, then your curiosity got the best of you or you are searching for ways to help your business grow; analyzing your skincare profitability might be your next step.
Let’s clarify what a Skincare Product Profitability Audit is:
You take an intentional look at each product you sell and rank them from most profitable to least profitable, as well as highest demand to least demand. This is a terrific way to reallocate your product and marketing costs, to help your investments go further.
How to make more money by doing a Skincare Product Profitability Audit:
Sometimes bringing on new products will generate more revenue. But sometimes you may be better served by doubling down on your marketing and sales efforts on the products you have, and sell them well instead. Taking a deeper look at your product offering helps you decide whether to invest more resources into existing products, or completely phase out low or unprofitable products.
When you streamline your product inventory:
- Clear optics into which products produce the greatest profits, revealing your marketing and sales priorities
- An opportunity to quickly increase your business profit
- A renewed focus on what problems you want to solve for your customers
- An intentional plan for which products you want to sell to help solve those problems
Evaluate and decide:
It is not just the cost of the products–you need to consider how much energy is taken up by creating, selling, and servicing each product to see if the investment is worth the return. Many business leaders don’t fully realize how much time and effort is going into certain projects, especially sales. They look at the top-line revenue numbers without truly counting the cost and time. Once you have a clear picture of costs, decide on whether to keep the product or reallocate resources to places that generate more profit.
Make a plan:
Which products are you going to invest in and focus on?
Who needs to be informed and what needs to be communicated to them?
- Informing your sales person/team
- Updating your Digital Dashboard and/or sales projections
- Creating and implementing a new and improved marketing strategy
Tips for making the process easier:
- Most vendors have cost of use sheets on each product. Ask for them! This helps give you a general guide to the cost for your professional back bar treatment products.
- Keep detailed records of product cost, shipping, commission paid out to staff or self, and the time that it takes to sell each product.
- Check expiration dates. Expiring products are a reg flag to step up your game one way or another.
For help on how you can make more money with a skincare product profitability audit and grow your business contact us at firstname.lastname@example.org.