Creating a retail component to your massage business, both in-person and online, is a great way to increase your business’s bottom line.

Creating a retail component to your massage business, both in-person and online, is a great way to increase your business’s bottom line.

Adding products that you can sell to your clientele, especially when doing so online, can create revenue streams that are not tied to the hours you are physically working. Additionally, the right products can uncouple your manual labor from your income, allowing you to leverage your time for other things, both in the personal or business realm.

As massage therapists look for ways to improve their bottom line, many are looking to alternative sources of revenue through the sale of products such as facial and body creams, books, candles and inspirational products. Most massage therapists seem to believe that if the item is sold over the counter, there are no restrictions. This is simply not true.

Many individuals are intelligent consumers, and some clients will willingly purchase products recommended to them by their massage therapist, such as creams to reduce wrinkles or oils that relax the body, whether needed or not, if the massage therapist recommends it. Perhaps this is because of trust in their massage therapist’s recommendation, or maybe they’re too uncomfortable to refuse.

The first thing you must consider even before picking the product and selling retail is if your business location is zoned for a retail business and a massage practice. Once the massage business is properly zoned, some obligations and limitations need to be considered, such as:

1. Ethics

When it comes to ethical considerations, one must first factor or consider the following. Will selling the retail product create a financial conflict of interest? Does it place undue stress on the client? Does it erode the trust between you and the client or undermine the primary obligation of being a massage therapist and the role you are required to serve your clients’ interests first and foremost? These concerns usually exist when you, as a massage therapist, sell or endorse products to your clients, resulting in financial remuneration to you.

2. Legal Considerations

Ethical and legal considerations tend to go hand-in-hand, and one would be best advised to check with the local licensing board regarding selling retail products to clients. Depending on the state license limitations and state laws, certain products may be ethical and legal landmines.

Beware of state laws prohibiting patient or client exploitation. It is in your best interest to refer to your local state licensing organization about the legal pitfalls of selling any products besides your services in your business. Legal considerations will vary by state. You do not want to waste money on unnecessary legal issues. Doing research before selling retail is well worth the time.

3. Pick the Right Product

If you choose to sell retail products beyond your services as a massage therapist to your clients, make sure you pick products in line with your business values, as you want your clients to leave your business feeling their experience has been a satisfying one.

You should strive only to sell retail products that will have the most significant likely hood of providing the best customer satisfaction. Therefore, you will need to research any retail products you consider selling thoroughly.

4. Client Satisfaction

Ensure you have read and understood any client complaints associated with your products. This will help eliminate products that are likely to cause client’s dissatisfaction from your potential list of products to sell.

For example, if your product happens to be a cream, ensure you have familiarized yourself with the ingredients to answer any questions your clients may have. You should also be familiar with the product’s usage and directions of use to explain these steps to your clientele.

Communication needs to be transparent when it comes to making any sale for products outside of the services you are offering, including the benefits and risks, if any, of using the product. It is, again, important to have intimate knowledge of the product you are offering for sale within your massage business.

5. The Resale License

Depending on the product you choose to sell, you may need to obtain a resale license. Resale licenses are usually for products that are subject to sales tax. It may not be required if you are in a state that does not have sales tax. Your state-specific licensing board may have this information about resale licenses. You can also reach out to the product manufacturers, as some manufacturers may help with obtaining these for you.

6. Sales Tax

State requirements will vary regarding what sort of inventory paperwork must be kept, but some states require sending regular reports of your sales. If you sell products, you must investigate your state’s sales tax rules and register with the state. There are tax implications related to selling retail, and it would be prudent to speak with an accountant familiar with your state’s tax laws.

There are specific requirements for collecting relevant taxes from the sale of your product and submitting these to the state or federal government. As a seller of products, you are responsible for charging and collecting sales taxes and send such sales taxes to your state revenue department.

You are, in essence, are the middleman for managing the process of sales taxes. You are not allowed to keep this money. There are huge penalties and fines if you do not report and submit sales tax to your local government.

Therefore, you must ask yourself whether it is worth having money and time tied up in inventory and bookkeeping.

Most local chambers of commerce should have resources to guide you. Another good source for this information is your state department’s revenue website. Business Licenses and Permits search tool on the U.S. Small Business Administration website is another excellent tool for any business to determine what tax implications exist for various products and services they sell.

7. Pricing

Once you have cleared these hurdles and have decided on a product to add to your massage business, the next consideration will be pricing. There will be a minimum amount that you will need to price your product to account for the costs associated with getting the product. It is crucial to consider onetime costs such as those incurred procuring some of the licenses mentioned previously.

Your pricing should also consider the taxes that you must levy with the sale of your product. Most manufacturers will often have a manufacturer-suggested retail price (MSRP). Typically, when purchasing products at a wholesale, these will usually be discounted below the MSRP, which is what allows you to make a profit on the sale of the product. Another consideration in pricing may be local competition, depending on your product. If the product makes up a large part of your business sales, you can also include the marketing cost into the pricing decision.

Once you have the products you want to sell to your clients, you have to do more than speak about them. Displaying items either in the waiting room or through an online platform like your business website or your social media page gives visibility to your product. You want to ensure you are reaching the correct audience.

8. Tracking Inventory and Sales

Once you get going, you will want to have a system to monitor your inventory and sales. Inventory management can be challenging. In the beginning, it will be hard to determine what products to keep and replenish, but as sales pick up, patterns should emerge that help guides your restocking decisions.

Monitoring inventory will go hand in hand with monitoring your sales. There are numerous products and programs out there that can allow you to do so. Take your time, investigate and invest in a software program that calculates the relevant taxes associated with your sales so that you can submit such taxes to your state on or before the due date.  Paying late fees will cut into the same bottom line that you want to increase with product sales.

Due Diligence

I applaud any massage therapist for creating another stream of income. It makes a significant difference in how you manage your time. However, doing your due diligence up front will save you time and money in the long run.

About the Author:

Lozelle Mathai, MBA, CFEI, is a financial accountant with over 18 years of experience in the field of financial management and accounting. She is the owner of The Body of Accounting, a division of Closing Your Books LLC. The Body of Accounting is an accounting consultancy firm that educates massage and bodywork business owners on how to manage, maintain and understand their business finances.