Marijuana Business Magazine September 2018

SOLVING THE INVENTORY DILEMMA S ean Dollinger’s career in e-commerce spans more than two decades and has involved moving tangible products in four different industries. The job of manag- ing inventory has been one of his biggest challenges – until now, thanks to technology. Several months ago, Dollinger’s company, Namaste Technologies, shed the tricky task of inventory purchasing – and became more profitable because of it. “You have so many challenges,” Dollinger, Namaste’s CEO, said of inventory purchasing. “Keeping stuff in stock, that’s No. 1. Then, No. 2, do you overbuy? What do you do if you’re forced to buy colors, which do you choose? What about accessories? Do you buy all of them, or only some? Where’s the line in the sand? And then there’s theft – stuff goes missing in the mail.” Toronto-based Namaste sells vaporizers and smok- ing accessories via more than 30 websites in 20-plus countries. In the past year, Namaste was able to invest more in its technology, which allowed the company to utilize application program interfaces (APIs) to solve the problem of inventory purchasing. API allows software applications to communicate. In Namaste’s case, the company uses the technology to log in to partners’ ware- houses and display inventory in real time on Namaste’s own customer-facing websites. “It’s a set of routines and tools that allows our software to grab other people’s software,” he explained. “We’re able to go into your inventory and make it look like what you have in stock is on our website, so when you run out of the black pair of sunglasses, instantly it marks those black pair of sunglasses as out of stock on our website.” “You always think you’re going to end up having more money than you have, and that’s one of the biggest challenges – whether you’re starting a restaurant, an e-commerce store, any- thing. … If you don’t properly prepare, it can get really bad really quick.” He recalled when Namaste was starting, “we thought X amount of dollars would be enough to help us. But then a new product comes in, and you want to add it. Then all the money you’re making is being rolled back into the business, to the point where you’re spending more money than you started with.” Going public, he said, helped miti- gate the costs that came with growth. Even though Namaste has acquired the moniker “Amazon of cannabis,” Dollinger keeps in mind the lessons of failed companies such as Blockbuster and Kodak as a reminder to stay para- noid and open to new ideas. “No matter how busy I am, if some- body sends me an email to look at their company or to explore some- thing, I never just shut something down,” he said. Dollinger also advises business owners to keep an eye on the big picture. “From a capital-markets perspective, no matter what you might think, you have absolutely no control of your share price.” He warns against the distraction that can come with obsessing over the markets. “If you look at your company over a 30-day period, has it changed that much?” Small dips can cause dispro- portionate mood swings in the office. He admits, however, that it can be difficult to follow his own advice. “I still check in on our company’s share price at least twice a day,” Dollinger said. “You just have to remember to stay balanced and work hard at what you’re building out.” ◆ With API, Namaste plans to increase its inventory from 4,000 products to 10,000 by the end of this year and 100,000 available for purchase by the end of 2019 – all without the company needing to hold a single piece of inventory. It’s a decision that takes money and a certain amount of size and experience to implement. “You have to make sure that the systems are working properly, or else it can become a nightmare,” Dollinger said, “like if the code isn’t right and everything that’s supposed to be in stock is out of stock, or if there’s a delay in the API and something sells out and the customer buys it.” His advice to other companies implementing API to get away from product inventory: “Take your time and make sure everything is operating. Don’t be scared to keep testing and testing and testing.” – Claire Zulkey 100 • Marijuana Business Magazine • September 2018

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