This post was originally published on this site.
This guest column is from Colin Decker, owner and founder of 7 SEAZ, New York’s first legacy-to-legal adult-use cannabis brand, and owner of Hudson Valley-based Sensei Growth Consulting. The views and opinions expressed in this article are those of the author, and do not necessarily reflect the views or positions of NY Cannabis Insider.
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I get calls daily from dispensaries that are either preparing to open their doors or are currently operating to advise them on what products they should carry on their menus.
Helping store owners succeed helps all of us in the market, and making the menu is definitely one of the key, make-it-or-break-it aspects of running a successful dispensary, not just here in NY but anywhere cannabis is sold.
Too many products not selling and the dispensary can slowly fold; too little and you won’t attract customers due to lack of variety.
Since the beginning of the NY market, I’ve been watching things play out. For me, it goes back 18 years knowing how weed has always and will always be sold. It’s intuition and wisdom at this point based on experience.
I’ve been operating in the NY market since day one and have seen stores and products come and go, geographic differences, diverse consumer bases and retail layouts, and one thing that will always hold true is that data or any program marketed to help guide your buying will never account for ambition, hustle or the human spirit.
I have been very vocal since the beginning about the necessity for unique products that shake up the marketplace, disrupting the stagnation of consumer choices. I truly believe that is one of the biggest reasons my brand 7 SEAZ™ Premium Cannabis has come to the forefront, leading the pack in the NY market for the infused pre roll category with our “TSUNAMI” and “TIDAL WAVES” triple infused pre-roll products. We believe in innovation, not stagnation. Many brands make the mistake of marketing directly to the consumer when in reality as a brand your audience is not the end consumer who will be purchasing your product but in actuality it’s the retail stores themselves.
Thinking about the consumer’s experience is top priority and must be mastered and perfected first and foremost, but this is not who you sell to. That is the dispensary’s customer base, not yours. Both vendor and retailer must work in tandem together for the retail and supply side cannabis ecosystem to flourish and continue to prosper long term.
When stores ask me about product offerings for their customers and how they can differentiate themselves, it becomes a balancing act between selling many of the same products as other retailers while still maintaining a fresh perspective on product allocation of SKUs that many seem to overlook or are unaware of.
I personally prefer to build a menu based upon quality and average customer basket size. However, stores can be proactive by instituting certain aspects of purchasing that can both protect them, their vault, their AP department and cast a wider net to attract and please their undefined or existent consumer base while continuing to further fine tune the menu, which in itself is a never-ending process.
Here are some tips to consider:
- The best mentality possible is to go low and slow with ordering by keeping SKU counts reasonable and case quantity low while utilizing a variety of vendors.
- Try not to have too many duplicate products on the menu. For example, many of the vapes on the market are the same exact thing in different packaging: distillate with terpenes.
- Temper your expectations regarding opening a store and your staffing needs.
- Please stay away from using “suggested orders” by vendors to your store as this is just a recipe for disaster. I get it! You took a gamble to be in this business and now you have to gamble again on what to order and that can be frightening to some. Remember, nothing is guaranteed, but it is possible to mitigate some risk.
- When opening your store DO NOT take in 1,000 SKUs or $80,000 orders from one vendor. I repeat DO NOT do this. If your goal is to have this much variety over time, that of course is your choice. I have yet to see any quantity of budtender staff that can memorize or accurately depict 1,000 SKUs from memory at any given moment fluently to consumers. You also will run the risk of “menu overload” by doing this and deter customers from confidently ordering. Instead, they’ll be staring at a menu while drooling on your retail floor.
- More products mean more inventory management, catalog and menu management, more returns, more inventory audits, etc., so be prepared for this. The amount of time and effort spent to get rid of products and SKUs that don’t sell and to try and return them to vendors makes no sense. Work your way upward with SKU counts, not down in order to find your balance.
- You never have to fill your vault, you want inventory moving constantly in and out with the need to have reorders coming in on a frequent basis. Many owners believed that opening the doors and making their first sale would lead to millions in revenue overnight so they overbuy for day one.
- You have to work hard every day to educate, market, and build your own consumer base like any other business.
- I am seeing that the momentum really picks up for most dispensaries across the state around the six-month point after opening.
- You want steady organic growth with your store to reflect a consistent trajectory upward of new consumers that supplement your existing consumer base. Synthetic growth means you can only go in one direction, which is down.
- Some products are a given and can confidently be ordered to fulfill certain categories on the menu, such as the drinks category where only a few brands exist and it is not difficult to see which one your store should carry, I’ll give you a hint: it starts with “A.”
- Don’t underestimate consumers’ desire to purchase quality product that has a matching price point. Cheap joints don’t always equal good sales numbers. And the same can be said for ridiculously priced products that lead to stagnant inventory that – even discounted – doesn’t move.
- Many of the customers going into stores have tried products on the market over the last year and want quality, with pricing becoming secondary. Of course, price shopping exists, and some consumers will gravitate towards the cheaper flower and vape products but when they regret buying something that will inevitably sting them worse than spending a few extra dollars and being happy with the quality of their purchase.
- I have seen a changing tide of retailers building their menu around quality lately with an increased desire to move away from “value products” that are bound to create a two-star Google review for your store, or bring around the angry reddit review post garnering negative attention. It was one thing in the beginning to have to carry mid-quality outdoor along with many other sketchy items due to market availability, but this isn’t the case any longer and retailers are realizing it.
- Build your relationships with vendors. They are your lifeline as much as we are yours. Long term relationships are key, as the market grows you want to know those you work with have your back and don’t forget about you along the way. This is already an issue with some this early on in the game.
Lastly, try and enjoy the process. You are, after all, selling cannabis legally, and it’s about damn time.