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By Claudia Post
As the cannabis industry grows increasingly competitive, lean and smart operating is critical to the success of any dispensary business. In the end, it doesn’t matter how great your sales might be if your operating expenses are through the roof. Streamlining your wholesale purchasing is a great way to reduce costs and maintain liquidity in your dispensary.
The process of streamlining your wholesale cannabis purchasing combines old-school practices like relationship management with novel technologies and B2B services. No matter how you cut it, a well-developed inventory and purchasing program at your dispensary will increase efficiency and improve customer satisfaction. Both of these elements will provide stability in the sometimes volatile waters of the cannabis market.
Develop Inventory & Purchasing SOPs
Getting organized is the first step in streamlining your wholesale purchasing. Creating Standard Operating Procedures (SOPs) will ensure that all inventory and purchasing activities in your organization are organized and choreographed. No matter the size of your business, SOPs will increase efficiency in the supply chain.
Important things to include in your wholesale ordering SOPs include:
● Stock management
● Product replenishment
● Order fulfillment
● Reorder points
● Vendor communication
● Stockouts & overstock situations
● Quality control
Please note, your SOPs will change in time with factors like new product demands and novel business technologies.
Implement Strong Employee Training
The next phase is to implement employee training programs that put your SOPs to work. With your SOPs as blueprints, you can create uniform processes with inventory and ordering that reduce errors and increase efficiency. Proper training also makes it easier to delegate wholesale ordering duties to the appropriate team members when needed.
Since cannabis is a highly regulated industry, small errors with product counts can have major legal implications for dispensaries. Ordering errors can also result in stock outs where customers leave unhappy because they are unable to purchase their favorite cannabis products.
Develop Good Relationships with Your Vendors
Developing strong relationships with your key vendors is always a good idea. Whether it be an extract manufacturer or commercial grower, communication, transparency, and commitment to quality are all important elements of a fruitful vendor partnership. If you properly manage your vendor relationships, it can also lead to exclusive deals and priority access to new products.
When you have strong vendor relationships, it also puts you in a stronger position to negotiate for better terms. If your dispensary does high-volume sales, you are likely in a position to ask for bulk ordering discounts on your best-selling products. Similarly, relationships based on trust can also pave the way for more flexible payment options – such as NET 30 terms.
Formalize Dispensary Inventory Management
Robust inventory management is the foundation of any efficient wholesale ordering operation. In fact, all inventory management procedures should be clearly laid out in your SOPs so employees know exactly how to handle your products. A lack of organization with inventory can easily lead to major issues with stockouts, overstock, and more.
No matter the size of your dispensary, you should utilize inventory tracking software that provides real-time data on product levels, sales trends, and popular items. This is a far cry from the early days of legal cannabis when dispensaries were forced to keep tabs on their inventory with extremely basic platforms like MS Excel spreadsheets!
Utilize Wholesale Ordering Technology
As seen in virtually every aspect of the cannabis business today, new technologies can also greatly help improve the ordering process. Modern SaaS platforms like LeafLink allow for streamlined communication between dispensaries and each one of their vendors. In fact, such platforms allow you to order all of your favorite cannabis products from one central hub.
Before products like LeafLink hit the market, dispensaries were forced to manage wholesale orders from vendors through disparate methods such as phone calls, text messages, and emails. Needless to say, it’s tough to keep your shelves stocked and maintain liquidity in your business when forced to juggle ordering with such confusing and rudimentary tools.
Work with a Wholesale Delivery Service Provider
In certain state markets, you also have the option to partner with a wholesale delivery service provider. When customers walk into your dispensary, they expect that their favorite products will be available on the store shelves. Yet, when you are forced to rely on a disorganized mix of wholesale vendors to deliver products on their own schedules, it can be tough to avoid stock outs.
Working with a 3rd party provider allows you to bring all of your deliveries together within a single organization that operates according to your calendar. Not only does this give you better control over your inventory, but it also frees up your team from the hassle of taking deliveries multiple times a week.
Prioritize Compliance at All Times
While streamlining your product supply chain to increase profits is always a good idea, it’s also important not to forget about compliance. For example, each state market and municipality hasunique laws that regulate who can legally transport wholesale quantities of cannabis. Similarly, it’s important to be sure that your chosen inventory software integrates with your state-mandated seed-to-sale software – such as METRC vs BioTrack.
On the internal side of things, it’s recommended that you give your employee team regular training updates on the latest compliance protocols in your given market. The cannabis industry is always changing and laxity with compliance practices can lead to serious problems for any dispensary business. While your SOPs should help keep your business compliant, refreshers on
inventory, ordering, sales, and tracking are never a bad idea.
Conclusion
In the dynamic landscape of the cannabis industry, dispensaries must continually adapt and refine their wholesale purchasing methods to remain competitive. By staying organized, training employees, building relationships, and leveraging technology, dispensaries can maximize their wholesale purchasing power and ensure sustained success. Even better, taking each of these
organizational steps will make your dispensary more scalable. When your cannabis business grows, you will be ready to seize the day and expand.
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