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Few, if any, dispensary owners are 100% confident in the accuracy of their business’ data.
Staying on top of data hygiene at a dispensary is a full-time job on its own. However, it’s one of the most important elements of keeping your cannabis inventory tight and business operating well.
Differences between actual stock levels and recorded data can lead to mixed messages, misplaced investments, missed revenue, and customer dissatisfaction.
It’s tough to make time to outline processes and run audits when you’re working non-stop to keep things running. Even the most experienced operators have a tough time keeping their data in line.
The saying goes, “garbage in, garbage out”; you’ve got to keep it clean from the jump to get clean results. By understanding the root causes of why your data isn’t telling you the truth about your business, you can set a better course.
We’ll run through best practices for keeping inventory data clean from the start by identifying the problems, root causes, and solutions. Then, you can improve inventory accuracy and avoid the very real costs associated with poor data management.
What Do You Do When Your Data and Actual Inventory Levels Disagree?
It’s not uncommon for discrepancies to crop up between what’s documented in a system of record and what’s actually on the shelves or in storage.
These inaccuracies create a cascading effect on operations, leading to inventory mismanagement, wasted resources, and potential regulatory risks.
Here are some ways bad data ends up costing cannabis retailers time and money:
When the system overestimates actual stock levels a business may keep reordering products they don’t need, tying up cash flow and creating storage issues.
If inventory records understate actual stock levels, popular products may run out of stock when they are in demand, leading to missed sales.
Compliance Risks
Cannabis regulators require retailers to precisely track all inventory movements. Inaccurate data means you aren’t being precise. The result is non-compliance, straight up. That puts you at risk for penalties, like fines or even loss of licensure.
Smoke and maintain a solid business by prioritizing the accuracy of your data and inventory records.
The Causes of Bad Data in Retail Cannabis Dispensaries
When stock values don’t match between your system of record and what’s on shelves, you have to find out why.
Here are the most common causes of inconsistent cannabis inventory data:
Human Error
As the saying goes, Nobody bats 1000. Manual data entry is a guaranteed source of data entry errors and a leading cause of inaccurate inventory records. For example, incorrectly logging product quantities or forgetting to record a sale or promotional giveaway can lead to mismatched data.
Shrinkage
Shrinkage, whether due to theft, spoilage or mishandling, can throw off inventory records. Being able to account for product loss and implementing measures to minimize it are a must for every retailer.
Outdated Systems
Relying on outdated or siloed inventory systems (i.e. don’t exchange the same information back and forth) increases the likelihood of errors. Systems that don’t track inventory changes in real time or don’t integrate with POS systems result in mismatched data.
These root causes highlight the need for modern tools and processes to ensure accurate inventory tracking.
How Bad Data Costs Retailers Money
Your data impacts every aspect of business, for better or worse.
Inaccurate inventory data creates a cascading effect, the outcomes of which are resoundingly bad for your business.
Here are just a few ways bad data breaks down a business' bottom line.
Lost Revenue
Stockouts lead to missed sales opportunities, while overstock ties up capital in products that may not sell, reducing overall profitability.
Customer Dissatisfaction
When customers can’t find their favorite products it weakens their loyalty to your brand and they are more likely to turn to your competitors who may have what they’re looking for.
Operational Inefficiency
Time spent reconciling inventory discrepancies or addressing stockouts takes away from more strategic business activities. In short, it costs you and your staff valuable hours you could be spending on more valuable projects, like getting more customers in the dispensary.
Non-Compliance Risks
Inaccurate records can cause compliance breaches, potentially resulting in fines, audits, or loss of your operating license.
Bad data doesn’t just cost you money. Sure, a financial hit will hurt but hits to operations and your reputation compound issues further and make it harder for you to get the business back on track.
How Happy Buyers Solves Retail Cannabis Inventory Challenges
Our core focus is on improving inventory accuracy, optimizing stock levels, and simplifying purchasing workflows for cannabis buyers.
Here’s how Happy Buyers supports cannabis retailers in getting data right on top of their ordering activities, every day:
Real-Time Inventory Tracking
This one is pretty straightforward, when recorded data and actual inventory don't agree you're making decisions based on bad information.
Happy Buyers tracks inventory at the SKU level hourly, ensuring accurate stock visibility just about any time you need it.
This approach accounts for out-of-stock events in real time, avoiding misleading calculations for sales velocity based on missing inventory data.
As a result, retailers can trust their inventory data, enabling informed decision-making and eliminating manual efforts it takes to double and triple-check the numbers.
Demand-Based Reordering
Overstock and stockouts are caused by inaccurate demand forecasting. Check out our series on demand forecasting for more detail (part 1, part 2, part 3)
Happy Buyers uses an advanced run-rate algorithm that calculates demand more accurately than POS systems, providing automated reorder recommendations tailored to each store’s sales patterns and desired days-on-hand.
This ensures the right products are always in stock without tying up capital in over-padded orders.
Simplified Purchasing
How many hours a week are buyers spending on time-consuming manual calculations and cumbersome purchasing processes? Too many.
To minimize errors and do away with overly complex ordering processes, Happy Buyers generates optimized purchase recommendations based on your store's actual stock requirements, removing the need for pivot tables or complex spreadsheets.
The result is a streamlined reordering process with all the data you need displayed in intuitive reports that are specifically tailored for retail buyers. This saves inventory managers 5-8 hours per week on reordering so they can do, well, just about anything more valuable with that time.
Accurate Sales Velocity Tracking
Stockouts and product rotations can give retailers misleading sales data when tracked through a home-brewed stack of spreadsheets.
Happy Buyers allows retailers to account for anomalies like sales spikes during promotions or holidays, normalizing run rates for precise forecasting. As a result, product sales velocity is tracked with 20-30% greater accuracy compared to standard POS reports.
With that off their plate, buyers can avoid costly errors and confidently make data-driven purchasing decisions to cut waste and save time.
The Only Tool Built Specifically for Cannabis Retailers
Generic tools fail to address inventory challenges specific to your store(s). Even cannabis-specific BI tools don't give you the data needed to run your store the right way because they provide generic insights for markets as a whole.
As the only tool built specifically for cannabis buyers, Happy Buyers optimizes inventory for cannabis-specific complexities, such as rotating strain-specific SKUs and managing high-margin, fast-moving products with a focus on your business.
With multi-location support and store-specific recommendations for reordering and days-on-hand targets, any retailer can utilize these game-changing solutions that address their unique operational and needs to remain competitive.
Clean Inventory Data is the Foundation for Success
Accurate inventory data is the backbone of successful retail operations.
By addressing the root causes of inaccurate data, investing in purpose-built tools, and implementing best practices, cannabis retailers can:
- Reduce errors
- Upgrade operational efficiency
- Increase revenue
- Improve the customer experience
Start building a foundation for accurate inventory management today and watch your business thrive.
Want to see how Happy Buyers takes inventory purchasing to the next level? Schedule a demo today.
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