This glossary defines 26 commercial terms that come up when a beauty brand, clinic, spa or studio prices, sells and plans: margin and pricing, retail and wholesale, clinic and studio measures, and what a customer is worth. Each entry pairs a plain definition with a beauty, clinic or studio illustration, and points to further reading on using the term in a commercial decision. Every example with figures is invented for illustration, so read the arithmetic, not the numbers. Terms are alphabetical within each group.
Margin and pricing
Gross margin and contribution margin
Gross margin compares revenue with the cost of goods sold; as a percentage, divide the difference by revenue. Contribution margin deducts every variable cost from revenue, such as payment charges, delivery and commission, counting each cost once. Example, invented figures: a £40 cleanser with £12 cost of goods sold has a 70% gross margin. If the £12 is entirely variable and the only other variable costs are £10 of marketplace commission and delivery, contribution is £18. More in which products and customers actually make you money.
Keystone pricing
A wholesale convention in which a retailer pays the brand about half the recommended price, then sells at that full price, doubling what it paid. It is a starting point for negotiation, not a rule every account follows, so ask for the actual split early. Example, invented figures: a body oil with a £48 recommended price, sold to a retailer at £24, leaves the brand £24 to cover everything. Its effect on direct pricing is in adding a channel without breaking the others.
Landed cost
The full cost of a unit once it is in the brand's own warehouse: the supplier's price plus freight, insurance, any duty and the handling to receive it. Check which of those the supplier's quote already includes before adding anything, so no charge is counted twice. Example, invented figures: jars bought at £1.10 each from an overseas supplier land at £1.45 once shipping and duty are spread across the order. What a border adds is in the border is part of your supply chain.
Markdown
A cut to the selling price of stock already on sale, for an event or to clear it. Before repeating a markdown, compare the margin earned during the promotion with full-price buying afterwards, and check whether customers came back at the normal price. Example: a skincare brand weighing a November markdown against an early-access offer that holds the price. The alternatives are in Black Friday without the discount.
Minimum order quantity (MOQ)
The smallest run a manufacturer or packaging supplier will produce at the quoted price. Multiply the minimum by the unit price, then map the supplier's payment dates against the launch. Example, invented figures: 3,000 units at £4.20 commit £12,600, and if payment is due before launch, that cash leaves before any sales begin. Compare a larger order's total cost and likely unsold stock, not only its lower unit price. More in how to start a skincare brand in the UK.
Premium pricing
Pricing above comparable products or services in the same category. Before setting that price, specify what the customer receives for the difference, and check whether customers can describe it back to you. Example: a facial priced well above the local average, with a longer consultation and aftercare the cheaper options leave out. The case for holding it is in the price wars.
Price ladder
The set of price points across a range, from the entry product to the most expensive, and the gaps between them. Example, invented prices: a haircare range has a £16 shampoo, a £28 mask and a £52 treatment set. A customer with £35 to spend can buy the mask but not the set; before filling that gap, check what extra benefit customers would want at that price. Pricing & Profitability looks at the whole ladder rather than one product at a time.
Retail and wholesale
Buying window
The period in which a retailer's buyer decides what goes on shelf for a coming season. Windows differ by retailer and category, so the dates have to be asked for. Example: a brand aiming for an autumn shelf date asks when ranging decisions close, then counts back through samples, packaging and production to see whether the date can be met. The count is laid out in a launch calendar that works back from the buying window.
Concession
An arrangement in which a brand or operator trades inside someone else's premises, with its own staff or stock, for a share of sales or a rent. For a product brand it can be a department store counter; for a clinic or studio, a hotel's treatment rooms. Example: a studio offered a boutique hotel's spa, paid as a percentage of treatments sold. What that asks of a small operator is in what a hotel spa contract requires.
Recommended retail price (RRP)
The price at which a brand suggests its product is sold to the end customer. If a wholesale price or a promotion is calculated from the RRP, rerun that calculation before changing it, and check separately which amounts stay fixed. Example, invented figures: a hand cream presented to a buyer at a £32 recommended price, with a £16 wholesale price and expected sales per store per week. The figures a buyer asks for are in how to get your beauty brand into premium retail.
Sale-or-return
Terms under which a retailer can send back stock it has not sold, so a delivery is not a final sale. For cash planning, keep deliveries, sales to customers, payments and possible returns as separate lines. Example, invented figures: forty gift sets go to a shop in November; twenty-eight sell and twelve come back in January, and those twelve need a new plan after the season. Costing returns into a wholesale account is covered in what a brand audit actually looks at.
Sell-in and sell-through
Sell-in is what a brand sells to a retailer; sell-through is what the retailer then sells to customers. A large opening order is sell-in. Before estimating a reorder, put customer sales beside remaining stock, expected demand and delivery timing. Example, invented figures: 600 units shipped across 20 stores in September and 210 sold to customers by the end of October is a sell-through of 35% of the stock delivered. Why a slow rate matters more for some products is in retail or direct: why shelf life changes the answer.
Short-dated stock
Stock with too little life left for its intended channel: a retailer may not accept it, and a customer may not finish it before its date. Example: a supplement batch with four months of life left, when direct customers take three months to finish a tub. What a brand can do with it, other than cut the price, is in clearing excess and short-dated stock.
Wholesale price
The price a retailer or distributor pays the brand for each unit. A brand that wants a particular shelf price works its wholesale price back from it, then checks what is left after its own costs. Example, invented figures: for a £30 shelf price on a keystone split, the brand invoices £15, which has to carry product, packaging and delivery. The pull against a direct price is in when direct and wholesale want different brands.
Rules and registration terms, such as a cosmetic product's safety assessment or its Responsible Person, are left out of this glossary: they are questions for a regulatory adviser.
Clinic and studio
Class pack
A bundle of a set number of classes or sessions, paid up front and used within an expiry period. It sits between a drop-in and a membership: the studio has the cash early and still has to deliver the unused sessions. Example, invented figures: a ten-class reformer pack sold at £220 is still valid in March with six sessions unused. Those six represent £132 of the purchase price and still need space in the timetable. The formats are compared in membership, class pack or drop in.
Enquiry conversion rate
The share of a defined group of enquiries that becomes a booked consultation or first appointment within a stated window. Example, invented figures: of 120 enquiries received in September, 42 book within 30 days of enquiring, a conversion rate of 35%. Follow those same enquiries through the later steps, consultation to plan and plan to first treatment, to find where people stop, and keep bookings from older enquiries separate. It is traced step by step in where clinic enquiries leak.
No-show rate
The share of appointments due in a period where the client did not attend and had not cancelled. Track late cancellations as a separate figure, so it is clear which problem needs attention. Example, invented figures: 12 no-shows out of 300 appointments is 4%; at £90 each, those slots carry a listed value of £1,080 before any retained deposits. Deposits and policy are in deposits, no-shows and a cancellation policy clients accept.
Rebooking rate
The share of clients seen in a period who book their next appointment before leaving. Example, invented figures: of 200 people seen in a month, 130 rebook at checkout, a rate of 65%. If it falls, record for each client who did not rebook whether another visit was needed, whether a suitable slot was offered, or whether they declined and why; the rate alone cannot explain the change. Its weight beside new-client numbers is argued in your clinic may not need more clients to grow.
Revenue per room-hour
Treatment revenue from a room divided by its available treatment hours, booked or not. For several rooms, add their available hours before dividing their combined treatment revenue. Example, invented figures: a room available for 50 hours in a week that earns £3,000 makes £60 per available room-hour. Where practitioners rather than rooms are the limit, calculate revenue per practitioner hour instead, as in the clinic that cannot grow past its founder's diary.
Room rental
A model in which a practitioner rents a room or chair and runs their own business inside the clinic or salon, with their own diary and takings. The clinic earns rent instead of a share of treatments, and gives up some say over price and service. Example: a clinic letting its third room to an independent practitioner agrees who sets prices and whether bookings run through its own system. Compared in paying practitioners: commission, salary or room rental.
Utilisation rate
Billable hours a practitioner delivered as a share of the hours they were available to work. Example, invented figures: 24 hours delivered out of 32 available is 75%. Keep booked hours as a separate figure, so cancellations do not disappear inside the total. Utilisation measures time used, not what it earned, so read it beside revenue per room-hour. The full calculation is in five operational metrics every wellness clinic should track.
Customer value
Average order value (AOV)
Total revenue in a period divided by the number of orders or transactions. It rises when a customer adds to a single basket, through a set, a larger size or an add-on, and says nothing about how often she comes back. Example, invented figures: £18,000 from 400 orders in a month is an average order value of £45. Range design that lifts it is in designing a range that lifts average order value.
Customer acquisition cost (CAC)
What it costs to win one new customer: marketing and sales spend for a period divided by the new customers it brought in. Read CAC beside contribution and the time taken to recover it, the payback period. Then check the proposed budget against available cash and other payments due before customers repay that spend. Example, invented figures: £6,000 spent in a quarter and 80 new customers is £75 each. Budgeting from it is in how much a clinic or beauty brand should spend on marketing.
Lapsed client
A client who has not returned within the interval her own treatment or buying pattern would predict. The interval belongs to the client, not to a fixed number of months: someone on a six-weekly facial has lapsed long before someone who comes once a year for a seasonal treatment. Bringing her back without a price cut is the subject of how a clinic wins back lapsed clients.
Lifetime value (LTV)
An estimate of what a customer is worth across the whole relationship: the revenue, or better the contribution, from every visit or order she is expected to make. It is a forecast, so recheck it against real behaviour. Example, invented figures: £80 a visit, eight visits a year for three years, is £1,920 of revenue, or £960 at £40 contribution a visit. Weighing it against acquisition cost is in finding new clients when you will not compete on price.
Repeat purchase rate
The share of first-time customers who place another order within a stated period. It counts a purchase already made, where a clinic's rebooking rate counts a future appointment booked. Example, invented figures: once every customer has had 90 days to reorder, 270 of 1,000 first-time moisturiser customers have bought again, a rate of 27%. Where it sits on a product brand's scoreboard is in a clinic or studio and a product brand need different scoreboards.
Questions about these terms
What is the difference between margin and markup?
Both compare cost with price, from opposite ends. Margin is the profit as a share of the selling price; markup is the profit as a share of the cost. As an invented example, a product costing £10 and selling for £20 carries a 50% margin and a 100% markup. Before agreeing a figure with a retailer, confirm which one is meant: a 50% markup and a 50% margin are very different terms.
What should go beside a metric's name in a team report?
Its calculation, reporting period, data source and exclusions. For a percentage, name both the group being counted and the total it is divided by. Give one person responsibility for each definition, and if a definition changes, mark the change beside the chart, so the team does not mistake a new counting method for better or worse performance.
What should a business check when its booking system and its spreadsheet disagree?
Export both for the same period and trace individual records before comparing totals. Check whether one includes cancelled appointments, duplicate client records or bookings created outside the reporting month, and note any filters and the date of each export. Agree which records belong in the measure, then recalculate both totals from that same list.
Which of these terms should a new business learn first?
Start with the next commitment the business has to assess. Before a product order, put the supplier's minimum, the landed cost and the payment dates beside the expected contribution per sale. Before setting a clinic or studio timetable, put the available room hours beside treatment prices and costs. Learn the terms that help compare that commitment with the cash and capacity the business has.
Beyond this list
Ask about a term in your trading report.
Kirsty Newman is Founder of The Boutique Consultancy. She spent almost two decades at some of the largest corporate powerhouses in beauty and luxury, including YSL Beauty, Giorgio Armani Beauty, Lancôme and Rimmel (L'Oréal Group and Coty). She went on to work with a number of startups as they scaled, before striking out on her own. Across this time, she has run seven-figure P&Ls and teams of 16, with direct engagement in venture capital funding and expansion.
Gaia Gabiati, Consulting Lead at The Boutique Consultancy. A decade across health clubs, private members' clubs, hospitality, wellness and multi-site aesthetics clinics, from Milan through Harvey Nichols, Virgin Active, Third Space and Soho House, to running the operational side of multi-site luxury aesthetics clinics.