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Inventory and Retail Strategy Flashcards

7 cards from real Beauty Business practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Inventory and Retail Strategy flashcards as text

  1. A salon buys a product for $6 and sells it for $18. What is the gross profit margin?

    Answer: About 67%

    Margin = (18-6)/18 = 12/18 ≈ 67%.

  2. Which approach helps a beauty business decide which retail lines to carry?

    Answer: Match products to the client base's needs and price sensitivity

    Aligning products with actual client needs maximizes sell-through.

  3. What is 'backbar' inventory in a salon context?

    Answer: Professional products used during services, not sold to clients

    Backbar refers to professional-use products consumed in services.

  4. A store's 'ABC analysis' would classify which items as 'A'?

    Answer: High-value items contributing most revenue

    In ABC analysis, 'A' items are the high-value, high-priority products.

  5. Why should a salon track expiration dates on retail cosmetics?

    Answer: Selling expired products risks safety issues and legal liability

    Expired cosmetics can harm clients and expose the business to liability.

  6. Which pricing strategy uses a rounded figure like $19.99 to appear more affordable?

    Answer: Charm (psychological) pricing

    Charm pricing ending in .99 makes prices feel lower to buyers.

  7. A retailer wants to move seasonal stock before it becomes obsolete. What is most effective?

    Answer: Time-limited promotional bundles

    Limited-time bundles create urgency and clear seasonal inventory.