Master Inventory, Increase Loyalty, and Win Back Customers

Moreover, Inventory is by far the largest area of lost (or at least locked) dollars for cannabis retailers.

In fact, the average store currently holds about 56 days' worth of inventory.

This excess inventory is causing a lot of businesses to flat out fail because their cash is tied up in inventory and they can’t pay their bills.

So ultimately, the key question is: Are you stocking the right products, in the right quantities, at the right time? Retailers who master inventory management while leveraging strategic marketing will gain a competitive edge.

To help you achieve this, here are actionable strategies from our partners at Happy Cabbage that you can start implementing today to reduce costly inventory mistakes, optimize margins, and build long-term customer loyalty.

1. Prioritize Smarter Inventory Purchasing to Avoid Overstock and Out-of-Stocks

Maintaining the right inventory levels is crucial for cash flow and customer satisfaction. If you’re overstocked, cash is locked on your shelves. If you’re out-of-stock, you’re missing sales.

- Overstock leads to excessive discounting, which crushes Marketing’s efforts and ability to use strategic discounting to maximize margin, while undercutting loyalty and lifetime value.

- Use data-driven tools to track real sell-through rates and get automated ordering suggestions to stock perfectly to demand.

- Optimize inventory turnover by maintaining a 14–21 day supply, preventing financial strain and reducing excess working capital tied up in unsold products.

2. Reduce Gut-Based Buying Decisions to Improve Profitability

Many dispensary buyers rely on intuition, a necessity in many ways, but which can lead to costly inventory mistakes.

- Replace gut instinct with real-time inventory insights and actions to ensure smarter purchasing backed by real data from your store(s).

- Track sales velocity and run rates at a group level when working with strain-based products to determine when and how much to reorder.

- Avoid reordering slow-moving products that lead to unnecessary markdowns.

3. Manage Vendor Relationships to Get Better Payment Terms and Exclusives

Nurturing vendor relationships can lead to stronger purchasing power and more favorable terms when negotiating contracts or orders.

- Negotiate payment terms to align with your inventory turnover cycle, keeping things orderly, on your schedule, and reducing financial strain.

- Include elements like margin protection or buybacks for products that don’t sell, so you aren’t left holding the bad on schwag.

- Use sales velocity data to justify lower minimum order quantities for slow-moving products.

- Partner with vendors for exclusive drops, allowing you to differentiate from competitors and stand out to customers.

4. Standardize Reordering with a Consistent Buying Process

Ad hoc purchasing leads to inefficiencies and cash flow problems—establish structured processes whether you operate one shop or dozens.

- Use a centralized purchasing tool to track demand and prevent overstock and out-of-stock issues.

- Set clear guidelines on how often orders should be placed and how stock levels should be monitored.

- Determine useful KPIs, like days on hand or # of SKUs, to hold yourself to account and ensure inventory health is optimal.

- Ensure multiple staff members are trained in the purchasing process to avoid disruptions if key personnel are unavailable.

- Purchase products based on actual sell-through rates. Relying on POS reports can misrepresent demand due to out of stocks, seasonal spikes, and holidays or promotional events.

- Use demand-based reordering—Tools like Happy Buyers provide automated reorder suggestions based on accurate sell-through data, helping retailers make informed purchasing decisions. Buyers can then generate purchase requests with the recommended quantities, ensuring data-driven purchasing while maintaining control over final orders.

5. Win back Lost Customers with Strategic Re-Engagement Campaigns

Not every customer who stops shopping is lost for good—many just need the right reason to return. Remember, send the right message, to the right customer, at the right time. 

- Identify customers who haven’t purchased in 30+ days and reach out with a compelling offer.

- Avoid deep discounts—instead, focus on exclusive product drops, VIP events, or limited-time deals. Think FOMO, but show these customers you are actively reaching out to them as individuals rather than just casting a wide net.

- Use direct messaging tools - like Happy Marketers or Dynamic Push Notifications, to automate re-engagement campaigns using customer data to create personalized win-back messaging. 

In a market as competitive as cannabis, efficient inventory management and customer loyalty are the key to long-term success. Implementing these strategies will help you minimize costly mistakes, optimize your cash flow, and create a loyal customer base. 

But, it doesn’t have to be a solo journey.

To bring these strategies to life, reach out to Happy Cabbage or Digital Awesome. Together, we’ll streamline your inventory management and design personalized marketing campaigns that foster engagement and lasting loyalty.

Take the next step toward boosting your cannabis retail business:
Learn more about Happy Cabbage x Digital Awesome’s Dispensary Loyalty Launch System here.