7 Steps to Planning and Establishing Your Most Profitable Spa Retail Merchandise Mix

7 Steps to Planning and Establishing Your Most Profitable Spa Retail Merchandise Mix


In order to achieve and maintain your optimal (aka profitable!) retail merchandise mix, you need to create an organized merchandise plan. 


Defining a clear vision for your boutique is essential to creating an efficient merchandise mix.  All the merchandise you select should tie back to this vision. What statement do you want your boutique to make?  Upon entering your boutique, it should be evident what your shop is about and who your client base is. 

For example, our boutique is located within a beachside resort.  Our vision could be described as “high-end, unique gifts inspired by the sea.”  We want to make the statement that we offer exceptional, one-of-a-kind gift items to clients who value quality and luxury.  As our guests travel throughout the shop, each display they encounter should tell the story of our vision.  Guests’ attention will flow naturally from a seaside-scented candle display, to an assortment of shell picture frames, to a casual straw beach tote, and so on.

With each purchasing decision you make, always consider how the products will fit in with your vision.  Your displays should flow easily from one to another.


Before you begin to make a merchandising plan, take a look at your budget, sales forecasts, and core product set.  Think in terms of categories (apparel, logo gifts, skincare, fragrance, candles, etc.).  First determine how much inventory you can carry.  If your target annual inventory level is $100,000, approximately $75,000 of that should be allocated toward your core products.  The remaining $25,000 can be used toward seasonal displays or experimental new lines.   Your core products (75% of total inventory) should be divided into categories. Depending on your boutique’s vision, you may have a number of categories. 

Second, make predictions for how much sales revenue each category will generate.  If you have a few years of sales history, you can use this as a starting point.  If you’re a new boutique, develop your forecast based on industry averages for boutiques of similar size (in terms of inventory and square feet) in a similar area and location. The National Retail Federation website is a great resource for researching retail sales stats nationwide.

Once you have a sales forecast for each category, then you can begin laying out your merchandise floor plan. There is a positive correlation between the amount of floor space a category receives and the amount of sales revenue that category generates.  If your skincare category is predicted to produce 30% of your revenue, it should occupy about 30% of your floor space.  Ask yourself, “How much revenue is each category producing and adding to the bottom line?  Is this the best use of my square footage?”  If a category isn’t pulling its weight, it might be time to revise your floor plan.  One thing I keep in the back of my mind: Square feet equal dollar signs!


The first step to establishing the optimal merchandise mix is defining your set of core products.  What is your boutique known for? Which items are your biggest revenue producers?  These are your core products – think of them as the backbone of your business.  It is very important that your core products have a healthy profit margin, so set your prices accordingly.  Devote the majority of your budgeted dollars to your core products. Always ensure that products are of high quality, especially if they are private labeled. Your merchandise represents your boutique.


Spend time on the sales floor and listen to your customers. What do they like? What are they asking for?  Analyzing sales reports is important, but knowing your clientele and their preferences is invaluable.   Their feedback will often help you see the bigger picture, beyond the numbers.


Sales representatives are a great resource and can provide plenty of information about their lines.  They can often give you information about which products do well in certain regions, and about any developing trends.  Remember to use their suggestions as a guide.  Ultimately, you know your boutique better than anyone.


As mentioned previously, the majority of your budget should be allocated to your core products.  However, don’t be afraid to experiment a little!  Your guests love to see new and exciting merchandise, and that’s part of what keeps them coming back.  When trying a new line, start small.  Here are a few experiments that were a huge success at my beachside resort spa location:

  • Greeting Cards:  Look around your community for artists who offer well-made greeting cards with a unique, local theme.  We were able to find handmade greeting cards adorned with starfish and shells – perfect for our seaside boutique.
  • Ornaments: Guests love to collect holiday ornaments. We’ve had great results with locally-crafted ceramic ornaments that are hand-painted with scenes of our resort. Look for ornaments that incorporate part of your logo, or another defining feature of your area.
  • Signature Candles: Being at the beach, we selected light, refreshing scents that remind guests of their time here. Choose a scent that tells your story.


Don’t try to be the spa down the street.  Have your own vision and stick to it! One of the biggest compliments that I enjoy hearing is, “Your boutique has the most unique merchandise! I can’t find this anywhere else!” Find a niche.  Know your competition and try to differentiate your store from the rest.  Select products that no one in your area has.




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