For most dispensaries, maximizing ROI comes down to proper inventory management. Too much of a product can lead to overstocks and excess product being thrown out, while stockouts can lead to lost revenue opportunities and upset customers.
In the case of inaccurate reporting, dispensaries can also have heavy fines levied against them by authorities or even have their licenses revoked. To avoid these and other potential consequences, try implementing some of these best practices.
Standardize your audit process
Every cannabis organization should be conducting regular inventory audits to reduce theft and fraud, recover losses, and meet compliance guidelines. On top of streamlining internal company operations, it’s critical that your business catches any discrepancies before an official auditor does.
Businesses should ideally conduct a full inventory audit at least once per week to reduce the risk of falling out of compliance. In order to reduce the load of counting all their inventory at once, many dispensaries are now opting instead to measure certain portions of their inventory at scheduled intervals. Once you’ve cycled through your entire stock, you then repeat the cycle the following week.
Implement the FIFO method
The FIFO method—or first-in, first-out—is a commonly used asset management system in which products are sold in the order they’re received. Considered the industry standard in food production safety, it’s also useful for preventing cannabis products from drying up, expiring, or becoming otherwise unsellable.
Similar to grocery stores, this requires organizing your stock appropriately. To best utilize the FIFO method, dispensaries should:
- Identify products with the earliest use-by or expiration dates
- Discard products damaged or expired products
- Place oldest products on the front of your shelves with newer products in the back
- Fulfill orders with the first available product (the oldest)
With the FIFO method, dispensaries can reduce waste and ensure that they’re maximizing their inventory ROI.
Use an inventory management software
Unsurprisingly, one of the best ways to optimize your cannabis inventory management is by utilizing a software designed specifically for that purpose. When integrated with a point of sale (POS) system, inventory management software can drastically reduce both the time wasted from manually tracking inventory data as well as the risk of human error.
On top of usual inventory benefits such as batch tracking and automated product equivalency, inventory management software can also streamline compliance reporting by integrating directly with government reporting systems.
One of the most important integrations for inventory management software is Metrc, the leading provider of cannabis regulatory systems within the United States.
Analyze your data
Making the most of your inventory and ensuring your dispensary is meeting customer demand requires insight into when, how, and what your customers are buying. By analyzing your data, your dispensary can determine when and how much of a product you should order as well as minimize the risk of stockouts and overstocks. Maximizing your business’s ROI depends on always having the right product at the right time.
With Dimensional Insight’s CannaBI application, dispensaries can view all of their business’s data in one place in real time. This ensures that not only are your users always working with reliable and accurate data, but also reduces the risk of providing outdated information to compliance tracking systems.
Furthermore, with CannaBI you can compare the results of your hard audits to what’s recorded in your system to quickly determine what products are unaccounted for. In such a heavily regulated industry, accurate and timely reporting are crucial for long-term success and sustainability.
To learn more about what data analytics can do for your cannabis tech ecosystem, check out our white paper—”Cannabis Technology Landscape—Bridging the Gap with Analytics.”
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