Ask any successful retailer what the key to a healthy, profitable business is and they’ll tell you: proper inventory management. Without it, sales suffer, customer satisfaction tanks and your bottom line takes a serious hit.
Cannabis retail is no different. In fact, in our industry, inventory control is not only inextricably linked to profitability ($$$), but also mandated by regulation; an #0excludeGlossary compliance infraction can incur fines or even license suspension, among other penalties.
So how can you run a profitable cannabis dispensary or retail store while ensuring your operation remains compliant with the inventory control and reporting requirements of your market? Thanks to advances in cannabis retail technology, it’s actually not as hard as you might imagine – and we’re going to show you exactly how it’s done in this comprehensive cannabis training.
The truth is that inventory management is the heart of any retail operation, regardless of industry. But particularly when dealing with perishable and highly valuable products, understanding exactly how much inventory you have becomes even more critical to the success of your store. Keeping too much stock on hand can lead to storage issues – not to mention profit losses via product expiration and damages.
On the other hand, constant backorders and lack of inventory can drive customers away and cost you lost sales. Of course, with compliance concerns looming large over the cannabis industry, dispensary and retail owners must be even more diligent in their inventory control measures. As a cannabis retailer, you must track and report your inventory according to the laws and regulations of your market; fail to do so, and your business could take a big hit in the form of a compliance violation.
It’s also important to understand that the inventory management regulations of our industry weren’t designed arbitrarily. The intention behind the #1excludeGlossary tracking systems is to prevent product diversion and accessibility to minors – a responsibility cannabis industry operators shouldn’t take lightly.
Finally, smart inventory management helps enhance customer service, which can lead to increased customer acquisition and retention. Cannabis patients and consumers who are particular about their preferred strain or solution won’t hesitate to ditch your store for another one that routinely has what they’re looking for in stock. The term #2excludeGlossary gets tossed around a lot these days.
“Seed-to-Sale” vs Retail Software
Since the start of the regulated #4excludeGlossary cannabis market, government traceability programs have required licensed operators to track and report all cannabis products as it moves through each stage of the supply chain – literally from seed to sale.
As a cannabis retailer, it’s important to understand the distinction between true #5excludeGlossary software and retail software that is #6excludeGlossary compliant. The intent, of course, is to account for every gram of cannabis so as to prevent diversion to the illicit market and help manage product recalls.
In the earliest days of legalization, when most cannabis businesses were vertically integrated and only operating from a single location, #7excludeGlossary #8excludeGlossary software made sense. This software helped those operators manage their entire operations – from cultivation to processing to retail – in one system. Today, thanks to advances in government traceability systems and cannabis software, retailers who are not vertically integrated no longer need #9excludeGlossary #10excludeGlossary systems in order to be compliant with regulations.
They simply need a dispensary #11excludeGlossary (POS) and inventory management system that can integrate with the government’s traceability system for tracking and reporting. On the other hand, while vertically integrated retailers can choose to use vertically integrated software, they can also simply connect a capable retail POS with their cultivation and processing software programs for a unified system.
The fact is, your dispensary relies on your sales and inventory reporting system to stay in business – because if your compliance reporting is compromised, so is your license. However, a #12excludeGlossary cannabis POS will help you streamline the compliance process and safeguard your operation. Here’s how a two (2) way integration helps retailers and dispensary owners simplify compliance:
- Cannabis cultivators and processors are required to report cannabis sales and inventory data to government traceability systems (ex. METRC, BioTrack, etc.).
- Because different POS systems are fully integrated with the traceability systems in every market we serve, those wholesales are #13excludeGlossary in the manifest.
- Retailers can simply log in to their POS system to receive their manifests from the cultivators and processors.
- All retail sales to consumers are automatically tracked and reported back to the traceability system, closing the loop of #14excludeGlossary tracking.
With that, let’s dig into the meat of inventory management for cannabis retailers.
Point-of-Sale (POS) & Inventory Systems
As we’ve seen, inventory management is the key to a successful cannabis retail operation – and good inventory management begins with a proper inventory management system.
But with so many options on the market, choosing the right solution can be overwhelming. Not every system will suit your specific needs, so it’s important to consider your dispensary’s goals and strategies and pick a #16excludeGlossary (POS) that will support them.
For example, if you run a #17excludeGlossary store, you’ll definitely want to look for system reliability, swift transaction times, and an offline mode for backup in case your #18excludeGlossary connection drops. Extra bells and whistles will be worthless if your system is slow or, even worse, crashes on a major sales day like April 20th (aka #19excludeGlossary).
If a unique customer experience is what sets your dispensary apart, then you’ll want to employ a system that facilitates a variety of different sales flows and enables dispensary technicians to provide impeccable service – for instance, having product and stock info at their fingertips, and being able to send orders straight from their tablet to the cashier for expedited checkout and to the backroom for product prep.
Another consideration is mobility. As a busy executive or store manager, you may need an inventory system that provides a mobile dashboard so you can monitor your operation’s performance on the go. Additionally, you’ll want to think about your customers’ mobile experience then you need to make sure your solution plays nice with #20excludeGlossary systems like Leafly, Weedmaps, etc.
Of course, it’s also important to think beyond your current needs and consider future possibilities. For instance, if you’re running a #21excludeGlossary store and are thinking about expanding to multiple locations, you’ll want to know that your chosen system has the capability to scale with you.
Knowing your needs from the #22excludeGlossary will enable you to narrow down the field of choices and ultimately make your search less overwhelming. Here’s a brief list of questions to consider as you begin your search for an inventory management system:
- Is your inventory system integrated with the popular #23excludeGlossary like Weedmaps, Leafly, etc.?
- Does your inventory system have available Application Programming Interfaces (APIs) for easy integration with current or future services and apps at a low cost?
- How easy is it to perform an inventory audit on the system?
- Can the system track batch Identifications (IDs) and manage product recalls?
- Have you implemented a barcoding system to track and label inventory?
- Do you offer delivery or sell in multiple channels, and if so, are you able to track and manage your inventory across different stores and channels?
- How robust is the system’s inventory reporting? Does it give you insight as to when and how much inventory to restock?
As you can see, there’s a lot to think about when choosing a cannabis retail inventory system.
Let us know what you think.
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