If you’re looking to optimize your retail business, having access to real-time data is not just convenient, it’s essential. You need to be able to reference consistent, comparative reporting in order to know what parts of the business are running smoothly and what areas require attention. This is where our cannabis dispensary inventory management system comes into play.
Making decisions based on data will help your business run more efficiently, but you can only control your own operations – brands and distributors are likely referencing their own data to make business decisions. This lack of visibility between retailers and brands can result in miscommunication, delays, and inventory issues. Imagine trying to order a family-style meal at a restaurant, but everyone at your table is ordering off of a different menu – everyone might get what they want, but you’ll end up with a ton of extra food. This is often the situation retailers and brands find themselves in when managing orders and inventory.
When it comes to data, sharing is caring, right? In today’s environment, sharing data is on the back-burner for retailers. With a market flooded with brands and products, why would a retailer take time out of their busy day to share data with their brands and distributors? Advanced retailers know the answer to this is improved cannabis dispensary inventory management. Let’s dive into how making purchasing decisions based on shared data will reduce stockouts, lessen preferential channel stuffing, and make just in time (JIT) inventory a reality – optimizing operations throughout the supply chain.
Stocking decisions based on data shared between a retailer and a brand can reduce the occurrence of stockouts and improve inventory efficiency. Real-time data from a cannabis dispensary inventory management system tells a retailer and their brands which products are converting, and which are sitting on the shelf. Decisions based solely on relationships instead of on shared data (we’ll get to that next) can result in over-allocation of unnecessary SKUs and under-allocation of popular SKUs – both requiring time and money to fix.
When a customer visits a retail location looking for a specific product from a specific brand, it can hurt both the retailer and the brand if that product is out of stock. No customer wants to hear the words, “Sorry, we’re sold out.” That one negative experience, easily remedied with proper cannabis dispensary inventory management, could influence them to visit a different retail location next time they shop. In addition, if a retailer runs out of a certain SKU, there are likely 10 other comparable products on the shelf that the sales associate can recommend as a replacement, resulting in the requested brand losing out on that sale.
Brands and retailers can keep an eye on product days out of stock and days remaining to understand stockouts for cannabis dispensary inventory management. For example, the AskTreez Inventory Reorder dashboard shows that Wonderweed Flower has been out of stock for 8 days in the last month, which accounts for the high amount of Potential Sales Lost. Since there are zero Current Units, there is no buffer time for reordering. The Wonderweed brand and retailer should initiate a new order immediately to avoid further lost sales.
This is important because the brand has a much stronger incentive to keep popular items in stock, as retailers have the option of suggesting substitutes. However, as a retailer, if you are consistently missing products that customers ask for, they are likely to find a new channel. The retailers that are able to consistently meet customer demand will be the most popular destinations, and often times have a cannabis dispensary inventory management. Making stocking decisions based on real-time data about customer preferences and location demographics will reduce stockouts, and therefore, improve revenue for both the retailer and their brands.
Reduce Preferential Channel Stuffing
Some brands have the ability to overstock or over-allocate a shelf if they have a good working relationship with the buyer. Also known as channel stuffing, this can happen when a brand offers lucrative incentives like deep discounts or extended payment terms to persuade buyers to order more than what they are likely to sell in a reasonable time period. This could easily mean that the products a retailer has on-shelf are not necessarily the products that their customer base is looking for.
Making relationship-based stocking decisions utilizing effective cannabis dispensary inventory management creates a marketplace controlled by buyers and budtenders. Looking at real-time data and ordering accordingly instead creates a marketplace controlled by demand. A data-driven process means the retailer is more likely to have products and brands in-stock when requested, so consumers make choices more naturally, improving their experience and strengthening loyalty to both the retailer and brands of choice.
Brands and retailers alike can track slow movers in inventory with “Days Without Sale”. For example, Wonderweed Vape had 19 days without sale over the past month. This true view, for cannabis dispensary inventory management, of how quickly a product is moving off the shelf can reduce over-allocation of shelf to a slow moving product.
Allow for Just In Time (JIT) Inventory
Just in time (JIT) inventory improves cash flow for retailers by converting inventory into dollars quickly and not having cash invested in slow moving products. The less time products stay in inventory, the more money is saved. This inventory method requires both retailers and brands to forecast demand accurately using the same real-time, location-based data. When retailers use their own data to manage inventory without sharing that data with their brands, crucial details needed for cannabis dispensary inventory management are left out of the decision-making process. All brands have unique circumstances and turnaround times that retailers are mostly unaware of, including, but not limited to: testing time, batch size, case size, location and delivery logistics, and other nearby stores with deliveries. When retailers and brands create a standard process for sharing data and constraints, they can work together to forecast demand, putting inventory management in the hands of both parties and making JIT inventory a reality.
Before a retailer or brand creates a purchase order, they can inform order size per product with each products’ recommended purchase quantity for cannabis dispensary inventory management, which is based on a brand’s lead time as well as the retailer’s sales rate (Daily Avg. Units Sold). Wonderweed Flower had a Suggested Reorder quantity of 162 units (See: Image 1). This order quantity allows for the most optimal level of inventory in store, at just the right time.
The JIT inventory method for cannabis dispensary inventory management also brings retailers and brands closer to signing stocking agreements. A stocking agreement allows a retailer to maintain only enough inventory to stock the products they need in the near future. As they need more inventory, their suppliers will deliver a new shipment. Generally, stocking agreements allow for weekly, even daily deliveries as long as the retailer has established schedule arrangements with suppliers. These long-term contracts also give brands financial security since the retailer is expressing their level of commitment by signing the agreement. As a result, the brand is more likely to make the necessary efforts to deliver high-quality products on time.
Retailers and brands on Treez know that the real-time cannabis dispensary inventory management data they have at their fingertips helps them optimize their operations and grow their businesses. For retailers, AskTreez provides analytics that are helpful for improving operations. For brands, AskTreez provides a window into how they are performing at retail, providing an apples-to-apples view of how the retailer uses the tool to manage their business, but filtered down to the brand’s individual products. AskTreez reports can be shared through the dashboard with partners on Treez, or exported and shared with any and all supply chain partners. This proactive sharing decreases the number of requests from these partners who constantly need to ask retailers for sales numbers and inventory levels, thereby improving cannabis dispensary inventory management. Establishing processes and schedules for sharing data between retailers, brands, and other partners will ensure that purchasing decisions are driven by demand, improving inventory management and communication efficiency throughout the supply chain.
Interested in adding AskTreez to your account? Reach out to your customer success manager for details! If you’d like to learn more about AskTreez, click here to access a recording of our latest insights webinar, 'AskTreez: Dominate the Competition with Real-Time Market Insights'.