How much of a Discount Should Your Dispensary Offer on Black Friday?

Black Friday is one of the largest Holidays for retailers which includes cannabis dispensaries. Black Friday is known for the anticipation and door busting deals that customers cannot get throughout the year and many cannabis dispensaries have over the years begun to take advantage of the plethora of shoppers by offering the best deals on this day. There is also small business Saturday, which is the day after Black Friday for the smaller Mom and Pop dispensaries. One of the biggest mistakes that a dispensary can make in preparing to offer door busting deals is not taking a look at the inventory aging report. This can help you determine what you can give the biggest discounts to, and how long inventory has been sitting.

Before deciding what kind of deals to offer to your cannabis shoppers, your company must ensure that:

  1. A low discount can be afforded
  2. Older inventory must go

First, an inventory aging report will show you the length of time your inventory has been sitting. Black Friday is a great time to get rid of unsold inventory and increase profit of inventory that has been otherwise sitting.  Bundling some of the unsold inventory with a better selling product can be a great way to increase sales. This can mean including it in a Buy one Get one Deal.

For discounts, the best strategy is to begin with your loyalty members. Offer better deals to customers that are a part of your mailing list or loyalty programs. This will not only increase customer retention, but can give people an incentive to join your programs. Customers that receive loyalty discounts tend to feel more valued which is great for getting them to return.

Another great strategy is to offer Buy one Get one deals or volume discounts. Volume discounts can be offering larger discounts for customers that purchase 2 or more packs of rolling paper. Be careful with volume discounts on cannabis as each customer’s limit on medical or recreational cannabis purchases differs from state to state. For some states customers are limited to 3 ounces every 30 days. So when offering volume discounts, it is best to offer it on accessories such as rolling paper or tobacco pipes.

In discounting the general rule of thumb is to start smaller and increase gradually. The best starting point is between 10-20% but on Black Friday customers can be looking for larger discounts so it is best to look at what your dispensary can afford specifically as it is not a one size fits all. It is best to talk to an accountant to see what your business can afford to do. If you do not have an inventory aging report implemented, CBS & Co. can help set it up and assess your inventory to see what you can afford to do on Black Friday. In most cases, once we see the businesses financials, we can see your most profitable days, and help implement reports that can help you set up weekly deals that help increase profits over time even past Black Friday. It is best to assess inventory weekly. To ensure the maximum sales and profit.

Reach out to CBS & Co. for help on your businesses financials before Black Friday.