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240 Logistics: Weekly - October 8 2024

240 Logistics

发布日期: 2024年10月8日

Knowing how long product has been sitting on the shelf is a MASSIVE indicator for how well a product sells. It could be an indicator that maybe that SKU just needs a little extra love, in the form of a discount! ??

Discounting is a great way to sell slower-moving products that are taking up vault space and precious open-to-buy dollars. There's certainly a fine line, however.

After all, we want to make sure leaving money on the table with customers will lead to overall profitability for the store in the long-run. We have the answers to the questions you have!

Let's get into it! ??

Over the last few weeks we have seen changes to our consumer insights - here is what we found:

?? Basket size: No Change
?? Average basket price: Increase by $0.78 - Last week we saw a increase of $0.03. This week's increase is a huge spike from the $0.28 decrease from two weeks ago! What do you think has changed? ??
?? Flower prices: Decrease by $0.10 - The influx of new crops from Croptober seem to be making their impact. Flower prices have dipped $0.10 from last week's increase of $0.04. ??
? Top 3 performing categories: No Change

Overstocking occurs when dispensaries or cannabis brands carry more product than they can sell within a reasonable timeframe. The main reason overstocking persists in the cannabis industry include poor demand forecasting, inefficient inventory tracking, and failing to anticipate market trends.?

The consequences of overstocking are severe:?

Reduced Cash Flow: Overstock ties up capital that could be better invested elsewhere in the business.?
Inventory Aging: Products such as flower or pre-rolls lose freshness, leading to reduced potency and quality, making them harder to sell at full price.?
Profit Erosion: Constant discounting diminishes profit margins and trains consumers to wait for sales.

To combat these challenges, cannabis retailers need to adopt a more data-driven approach to cannabis inventory control and cannabis sales performance dashboards.?

How to Avoid Overstocking in Cannabis Retail?

1. Accurate Demand Forecasting with Cannabis Analytics Tools

One of the key ways to avoid overstocking is through accurate demand forecasting. FlyWheel’s cannabis inventory forecasting software uses historical data and market trends to predict future demand, allowing retailers to order the right quantities.?

How FlyWheel helps:?

Analyzes sales trends and seasonal demand.?
Tracks consumer behavior to ensure you’re stocking the right products in the right amounts.?
Helps predict the best-selling categories and strains, avoiding over-purchasing lower-demand products.

By using an advanced cannabis analytics and reporting dashboard, retailers can stay ahead of trends, ensure their inventory aligns with consumer preferences, and avoid purchasing excess stock that won’t move.?

2. Implement Cannabis Inventory Management Best Practices?

Establishing inventory management for cannabis retailers requires a mix of technology and strategic planning. By setting up systems that continuously monitor inventory levels, retailers can prevent over-ordering and unnecessary stocking.?

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Best practices include:?

Regularly auditing your inventory to ensure stock accuracy.
Segmenting inventory into categories like high-demand, medium-demand, and slow-moving products.

. . .

Interested in learning more? Read the full blog here.

If products aren’t selling within the desired time frame, you’ll need to take steps to move inventory before it becomes a loss. Here are some dispensary inventory optimization strategies:?

1. Implement a Discount Strategy?

One of the most common methods for moving aging inventory is to offer discounts. However, the key to a successful discount strategy is to time it right. Here’s how to approach discounting:?

Early Discounts: Offer small discounts (10-15%) on products that are approaching the end of their ideal shelf life. This can help spur sales before a significant markdown is necessary.?
Bundle Discounts: Group slower-moving products with popular items to encourage higher volume sales without steep markdowns.?
Limited-Time Offers: Create urgency by offering time-limited discounts, prompting customers to act quickly and clear out older stock.

2. Optimize Inventory Turnover Time

Effective inventory turnover is the cornerstone of profitability. Regularly assess your product sales with tools like the cannabis sales performance dashboard to determine which items are selling too slowly. A good rule of thumb is to aim for inventory turnover rate that allows products to sell within 90 days. This helps you maintain fresh stock and reduces the need for heavy discounts.?

3. Adjust Purchasing Based on Data?

Rely on your cannabis inventory management best practices to make data-driven purchasing decisions. Too often, dispensaries over-order products that don’t match customer demand, leading to aging inventory. Use data from cannabis inventory control systems to forecast demand accurately and avoid overstocking products that are slower movers.