How to Increase your Revenue

Posted on January, 29th, 2022 by salonlink | Posted in News

Beauty Professionals Calculate Product-Use Profit Margins

• Product use affects profitability every single service (color, facials, lash lifts, waxing).

• Small overuse (e.g., 10 g too much color!) quickly adds up to lost revenue.

• Knowing product cost per service allows accurate pricing and higher profits.

  The Core Concept

  A. Product Cost per Unit

  Example:

  • A 100 ml bottle costs $20.

  • Unit cost = $20 / 100 ml = $0.20 per ml

  B. Product Used per Service

  Record average usage:

  Examples:

  • Hair color: 45 g

  • Developer: 45 g

  • Skincare: 8 ml cleanser, 5 ml serum, etc.

  C. Total Product Cost per Service

  Add up each product cost.

  Example (hair color):

  • Color: 45 g × $0.18/g = $8.10

  • Developer: 45 g × $0.05/g = $2.25

  • Total product cost → $10.35

  ---

  Profit Margin = (Price – Cost) ÷ Price × 100

  Break it down  example:

  • Service price: $120

  • Product cost: $10.35

  Profit margin =
  (120 – 10.35) ÷ 120 × 100
  = 109.65 ÷ 120 × 100
  = 91.4% profit margin

  This helps you see that:

  • Product cost is a small % of the price

  • Overusing product kills margins unnecessarily