In such a regulated industry it can be hard to break above a certain threshold per transaction. When the state puts a cap on the amount of cannabis can be purchased, how do you add to the sale?
We can look to other industries that have limitations in other forms, like gas stations. While they are not limited by the state, they are limited by the customer's gas tank. So what do gas stations do? They have a wide range of impulse products in their “convenience store”. This is actually where gas stations make most of their money.
Let’s take this philosophy and look at our industry. Now, I am not going to suggest that you have an aisle of chips and soft drinks, even though this may not be a bad idea. But rather looking toward what sorts of products can be complimentary. Smaller items like lighters or papers can be good add ons, but those don’t do a great deal to increase the ticket. Who hasn’t enjoyed smoking a fresh bowl of flower out of a new clean pipe? There is nothing like the clean pure taste! So why not suggest adding a new piece to your patient/customer? This could turn into an easy $8 added to the total purchase on the low end, and upwards of $100 on occasion. What about suggesting, with their purchase of their tasty concentrate, a new banger? That’s an extra $10 added to their transaction.
So $8 here, $10 there, the random $100 additional purchase. What does this all add up to? Without getting too over the top, let’s use the $8 add on. If we assume a 500 transaction per day average for 7 days that is 3500 transactions a week.
- If only 10% of those transactions have an $8 item added to the transaction that would be an increase of $2800 a week, $12k a month or $145k a year. With a 50% margin, those numbers aren’t too shabby. Keeping in mind, this is only at $8.
- What if another 5% add a $20 pipe? Well that’s another $3500 a week, $15k a month, $182k a year.
- Okay, we are on a roll, what if just .1% added the $100 rig or bong? Well, that’s another $3500 a week, $15k a month, or $182k a year
Adding all this together, $145k, $182k and $182k that is $509,000 added to your annual revenue. Well there is the extra $500k, if your dispensary has 1000 transactions a day, and these numbers are used as the baseline, we can simply double that $500k to a cool $1M a year.
These numbers are just to illustrate what sort of affect your non-cannabis products can have on revenue. They may not be your main focus of course, but it is hard to look past the substantial effect they can have on your top line, and your bottom line at a 50% margin.