Top 3 Things Cannabis Purchasing Managers Overlook
January 9, 2023
January 9, 2023
Deals, Sales Trends & Promotions in the Dispensary Purchasing Mix
Retail cannabis procurement is a tricky job. It is easy for buyers to overlook facets of purchasing in such a complex marketplace. Here are three areas of purchasing considerations that often get missed:
The Real Value of a Deal
Oftentimes a buyer will come across a deal that seems too good to be true. This is the best time to put a bit of extra effort into running numbers and asking the right questions before locking in a big deal. Factoring in vendor motivation is a great starting point for any equation when purchasing wholesale cannabis.
If a buyer is offered a really good deal on a large quantity of product, they should be asking many questions.
Is there a quality/expiration concern? If a product is hard to sell, that saved margin might go out the window having to discount the item in store.
Is there enough vault space? Overloading your vault with inventory should only be done if the gains are high as vault space is the most limited resource in most dispensaries.
Is this a product that customers truly want? Solid run rates are important for the success of a product, and it is important to align your product mix with your customers’ purchasing habits, so make sure to have data as a backup.
Can a middle ground be met? If a deal has a minimum unit stipulation, it’s important to ensure the quantity is viable and if it truly isn’t the buyer must go back to the negotiating table, a smaller discount for less units is a sufficient middle ground.
It’s important to ensure that the deal is not going to be a burden – it is supposed to work for both the retailer and vendor – so getting creative in negotiations is the best route here. It’s also okay to say no to a deal if it doesn’t feel right. At the end of the day, a buyer is making important decisions that affect their company so none of it should be taken lightly.
The “Why” of Dispensary & Product Sales Trends
Market and internal data sources are important tools for a cannabis retail purchasing managers. Oftentimes a buyer will make their decisions directly from the data trends they see. This makes sense at the surface level, but there can be many reasons for a sales trend, and they aren’t always sustainable or long-term.
It is important to ask why when an anomaly is noted so that the correct action can be taken.
Maybe a certain season or local event has affected sales of specific products. Maybe the newest batch of vapes has an unusual coloration and the sales floor staff doesn’t feel comfortable selling to customers.
There are a wide variety of reason for sales trends and it’s vital to use anecdotal resources from budtenders and vendor partners to ensure the buyer makes the correct decision.
Discount and Promo Involvement
In many instances, the cannabis retail management team handles planning of discounts and promos separately from purchasing planning. We suggest dispensary purchasing managers to not only be a part of these discussions, but to be a leader when planning discounts and promos in store.
The purchasing manager is most in tune with market trends and knows where they can leverage deals to support promos. They should be working with vendors in advance to plan a promo calendar and be an ideal partner for their vendors and a hero for their stores.
Reach out to our savvy team of dispensary purchasing experts to explore how to consider all factors for an effective inventory and purchasing strategy.