Is Your Retail Skincare Shelf Making Money?

Many med spas sell professional skincare. Done well, retail adds margin, supports treatment results and keeps clients connected between visits. Done without measurement, it can tie up cash in products that sit on the shelf for months.

Margin by product and brand

For each product: retail price minus your cost minus any staff commission or spiff. Group by brand. Some brands carry much higher margins than others, and the brand you stock most may not be the one that earns most.

Inventory turnover

Turnover = cost of retail sold over 12 months ÷ average retail inventory at cost

Low turnover means cash is sitting idle and products risk expiring. Products that rarely sell should be reduced or discontinued.

Staff commission and recommendations

Retail commission encourages staff to recommend products. Make sure the commission is based on the margin the product actually earns, and that recommendations stay tied to what the client needs.

Sales tax

Retail products are often subject to sales tax, while many treatments may be treated differently. Rules vary by state. Make sure your POS charges and records sales tax correctly on retail and that it is filed on time. Check the specifics with your CPA.

Online and subscription options

Some brands offer online stores or auto-replenishment programs where the clinic earns a commission without holding inventory. Compare that commission with your in-clinic retail margin after carrying costs.

Signs your retail needs attention

• Large amounts of stock nearing expiry
• A few products making most sales while dozens barely move
• Retail margin lower than expected after commission and discounts
• Discounts used to clear stock repeatedly

Quarterly retail review

1. Rank products by margin dollars and by turnover.
2. Discontinue or reduce slow, low-margin products.
3. Reorder only fast movers.
4. Check pricing against current costs.

Retail should support the clinic's profit and client results, not become a second inventory problem.