This is a note from our sponsors.
What do you get if you combine the inventory challenges of a pharmacy, a grocery store, and a fashion retailer? The cannabis industry. The overlap of stringent regulations, product perishability, and demand volatility makes managing inventory uniquely difficult for both cannabis vendors and retailers. But there’s a solution — vendor managed inventory, or VMI.
VMI is a collaborative strategy between vendors and retailers that makes inventory management more accurate and less stressful. With VMI, vendors are responsible for maintaining inventory levels at retail locations based on continuously shared sales and inventory data. Stock is monitored and replenished in real-time based on current demand, which is especially important in the cannabis market where product demand can rapidly change due to consumer preferences and regulatory changes.
Basically, VMI moves inventory management responsibility from retailers, who may have fewer resources to devote to it, to vendors, who can more efficiently manage restock decisions. Everyone wins.
How does VMI work?
The most important aspect of VMI is data exchange. The vendor monitors the retailer’s inventory levels, either through direct physical inspections or via electronic data interchange (EDI) systems that provide real-time data on stock levels, sales, and even forecasted demand. Both parties agree on minimum and maximum levels of inventory for each product, reorder points, and the quantities to be replenished. This agreement ensures that inventory levels are maintained within specified limits, optimizing the stock levels to meet demand without overstocking. Finally, the vendor generates orders based on the agreed parameters and the real-time data received.
How does VMI benefit cannabis vendors?
Cannabis vendors have a lot to gain from vendor managed inventory, from enhanced supply chain efficiency to customer satisfaction. Let’s take a closer look at everything VMI has to offer:
Avoid stockouts
VMI enhances forecasting and minimizes stockouts for vendors by leveraging real-time sales data from retailers. This access to timely data allows vendors to refine their inventory management by closely aligning production and stock levels with actual market demands, ensuring they can respond rapidly to fluctuations in consumer preferences. Also, VMI systems automate reordering processes, setting triggers for replenishments at defined inventory thresholds to prevent critical shortages.
PRO TIP: Headset Bridge’s dashboard puts real-time inventory data, from quantity on hand to percent days in stock, at your fingertips so you never have a stockout again.
“I tell every brand who walks through this door, if you don’t have Headset, you need to get Headset and connect with Bridge. … Especially if you have five or more stores, get Headset because it’s easier to track inventory.”
— Jesse Roberson, Housing Works Dispensary director of cannabis procurement/operations
Boost sales
With up-to-date sales data from retailers, vendors can dynamically adjust their inventory to align with current consumer trends and preferences. Customers stay satisfied, and vendors sell more by capitalizing on popular products before trends shift. Vendors can also use the detailed insights gained from real-time data to fine tune their marketing strategies and introduce new products that meet the evolving needs of the market. By ensuring that product offerings are aligned with consumer demand, vendors not only increase sales but also strengthen market presence, making VMI a critical tool for driving revenue growth in the competitive cannabis industry.
PRO TIP: Headset Bridge shows you which products are doing best at which retailers, so you know where to focus your resources.
Avoid compliance breaches
No matter which system a vendor is using, surprises happen. When they do, having real-time retailer data allows vendors to quickly identify and solve problems. This ability to rapidly respond is especially crucial in environments like the cannabis industry, where regulatory compliance is tightly monitored. Real-time data not only aids in regular business operations but also serves as a critical tool in maintaining legal compliance. It ensures that all transactions are accurately recorded and that inventory levels are consistently updated, thereby safeguarding against potential legal issues that could arise from inventory mismatches or inaccuracies.
PRO TIP: Headset Bridge’s triage report flags problem situations like stores with no SKUs in stock or no sales.
All this and less stress with Headset Bridge
This all sounds great, you might say, but how could anyone track and analyze that much data? The answer is Headset Bridge. Headset Bridge directly accesses data from over 3,500 cannabis retailers across the US and Canada (the most complete market picture available) and compiles it into easy-to-understand dashboards and reports that take the guesswork out of inventory decisions. You get exactly the information you need, when you need it. It’s all of the data and none of the stress.
“Bridge’s VMI software has allowed us to track sell through and inventory in real time with our dispensary partners. With this data, we’ve been able to optimize reorders, identity SKUs to target with marketing, and to inform future product development. Ultimately, this has led to significant efficiencies for our brand and partner stores, all while strengthening our wholesale relationships.”
— David Craig, Illicit Gardens / From the Earth chief marketing officer
How does VMI benefit cannabis retailers?
It’s not just vendors who benefit from vendor managed inventory. Retailers can increase sales, cut overhead, and lower risk. Here’s how:
Increase sales
With traditional retailer-driven inventory, it takes a lot of work to make sure shelves are always stocked with the products customers want the most. VMI ensures inventory is adjusted based on current consumer trends and demand — no work required from the retailer. This adaptability not only prevents lost sales due to out-of-stock items but also helps capitalize on the popularity of trending products, increasing overall sales.
PRO TIP: Headset Bridge integrates directly with more than 30 cannabis POS systems, making it a cinch to switch to a revenue-boosting VMI approach.
Reduce overhead
Managing inventory is expensive and time consuming, especially for smaller retailers. VMI systems reduce the costs associated with managing inventories by putting responsibility for inventory management with the vendor. With vendors directly replenishing products, retailers can streamline their operations and focus more on customer service and other core business activities.
PRO TIP: Headset Bridge automatically transfers data to vendors in real time, so retailers can put their brain power and time toward marketing and other essential business tasks.
Lower risk
Overstocking and stockouts are costly mistakes for retailers. VMI’s proactive inventory management means that retailers aren’t left with unsold stock that ties up capital and don’t miss out on sales due to insufficient stock levels. This careful balance is crucial in the cannabis industry, where consumer preferences can shift quickly and inventory can become obsolete or exceed legal stock limits.
PRO TIP: Headset Bridge lets retailers rest easy knowing vendors are restocking based on up-to-the-minute data.
Get the most out of VMI with Headset Bridge
None of this is possible, though, without the right VMI platform. Headset Bridge is a hands-off solution that frees up retailer owners and staff to concentrate on other important business needs while inventory and sales data zips over to their vendors via POS integrations. Basically, you never need to think about inventory again.
Make the switch to vendor managed inventory
Whether you’re a cannabis vendor or retailer, Headset Bridge gives you the many advantages of data-based inventory decision-making while eliminating the stress and resource load of traditional inventory management. It’s the best version of VMI. See for yourself — schedule a chat with one of our cannabis inventory management specialists today.
“Headset Vault is our favorite. The ability to access the data quickly using a Snowflake connector and use the clean normalized data in our processes and systems is a feature we couldn’t live without.”
— Casey Rash, Sr. Director of Warehouse, Logistics, and Commercial at Kiva Confections
