Jessica Jansasoy

3 Tactics to Reduce Slow-Moving SKUs at Your Dispensary

Having less flexibility with money, getting slim profits from discounts, and topping it off with customers expecting a discount every time they step foot inside your dispensary are just some issues that come with slow-moving SKUs.

But understanding why slow-moving SKUs are a bigger problem aside from occupying space on your shelves it’s just the first step. The real challenge comes when you ask yourself, “how can I deal with slow-moving products?” Or going a step further, “how can I prevent slow-moving inventory?”.

Well, here are three tactics to prevent, or clear out, slow-moving inventory and free up the cash flow at your dispensary.

#1. Trial New SKUs for 30-45 Days

If we’re realistic, you may already have tons of SKUs on your shelves. And that may be because a lot of inventory managers and purchasers rely on market data and haptics to buy inventory. The problem with these haptics is that they leave buying decisions to chance.

When we talk about haptics, these are some of the most frequent ones you should avoid:

Rather than using haptics to end up with inventory worth 60+ days of supply, buy enough products from a brand to last up to 30 or 45 days by SKU. A month's worth of supply it’s enough to help you test a new SKU and understand its sales metrics while ensuring a quick turnover rate.

Once your 1-month trial for a new product ends—and you have collected enough data—you can decide either to re-order it or try again with a new product. But to ensure your new SKUs have a good chance of being sold, you should develop a launch cadence.

A launch cadence for a product is what you would call a scheduled marketing momentum. This technique is effective to keep your audience engaged with your business, as they’re waiting to see what comes next.

Here are some tips to develop an effective launch cadence:

#2. Evaluate Currently Held SKUs That Are in Low-Supply

When you get a notification informing you it’s time to re-stock, it doesn’t necessarily mean you should do it. Rather than re-stocking products that have less than 14 days of inventory, use these notifications as a reminder to evaluate your SKU and see if it’s worth to re-stock.

Otherwise, you could be re-stocking unsellable products that you’ll have to deal with—again—during the next 60+ days. And as a result, you’ll have money on your shelves you can’t use, carrying more cost or expiring.

To make sure you get alerts about low-supply SKUs, use your POS system PAR level notifications. As you may already know, your PAR level is the quantity of product you want to keep at a minimum and maximum. So when you get a notification that you’re at your minimum, it’s time to evaluate that SKU.

Another option is to use Happy Buyers to identify low-stock products. Rather than just sending you notifications about the number of products you have left in stock, it accesses historical sales data and gives you recommendations about which products to stock and which ones to remove.

Now, data points that will prove useful to evaluate your SKUs are the percentage of sales, sell-through rate, share of total basket, average discount, and information about your customers. These paint the full picture of how your products are performing.

Percentage of sales, sell-through rate, and share of total basket tell you if the product has a high turnover. But average discounts make sure the high turnover isn’t biased by the urgency of discounts. And your customer data it’s something you should focus on to offer better deals and better your chances of making a sale.

#3. Run In-Store & Digital Campaigns without Over-Discounts

If you already have slow-moving SKUs and have been reading through this post looking for a solution rather than how to prevent them, this is it. The best way to clear out your slow-moving inventory is to run a digital campaign (to promote these products harder) and offer discounts (to make them more appealing).

Here are the steps to create a discount campaign:

Remember that creating urgency for any of your products comes down to how you engage with your customers. There’s more than one touch point your customers have to go through to buy from you and if you don’t offer something targeted, your customer experience is affected negatively.

Key Takeaways