Unpacking Repurchase Rates for Wholesale CannabisInsights • March 26, 2020
Understanding retailer purchasing decisions is essential to any cannabis brand's success - and LeafLink Insights is here to help.
In order to be successful as a cannabis brand, it’s essential to understand retailer purchasing decisions. Brands not only have to keep track of what retailers are buying, but they also have to keep track of how much and how frequently retailers place orders, so they can strategically manage inventory and update their menus.
LeafLink Insights wanted to help brands get a better understanding of how quickly they’re selling through inventory. We analyzed over 658,000+ orders made through LeafLink in 2019 and broke the data into three key metrics: total orders, average order volume (AOV), and average days between orders.
Wholesale Cannabis Categories at a Glance
Of the six major product categories in the LeafLink marketplace, Edibles & Ingestibles had the fewest number of days between orders: 8.42 days. What does that mean? On average, retailers are re-ordering Edibles & Ingestibles products every 8 days, so brands who sell these products should refresh their menu weekly.
Flower products, on the other hand, had an average of 16.04 days between orders, meaning retailers purchase new Flower roughly every two weeks.
When comparing the average order value for Edibles & Ingestibles and Flower products, though, there is a clear difference in the way retailers are buying these products. For Edibles & Ingestibles, the AOV is $1,037.74; for Flower, the AOV is $4,582.29. So, while retailers restock Edibles and Ingestibles twice as frequently, they tend to spend more when ordering Flower.
Breaking Down the Power of Flower by State
How does Flower’s national average of 16.04 days between orders translate to specific markets?
States like California don’t stray far from the national average. The average time between orders here is slightly below the benchmark at 15.48 days, about every two weeks. The AOV is similar to the national average as well — $4,275.34.
Ohio retailers, on the other hand, order Flower every week — every 6.77 days to be exact. They also spend more on Flower when they order; the AOV for Flower here is $8,219.03. This could be either because retailers are ordering more Flower at a time, or because Flower products are more expensive here, a trend we have seen in newer markets due to lower supply.
Alaska falls on the other side of the spectrum in terms of time between orders. Retailers here order Flower every 24.23 days, or just under once a month. However, their orders are similar in size to the national average – their AOV for Flower is $4,326.72.
Repurchase Rate Takeaways
How can brands use this data on repurchase rates to their advantage? Knowing how frequently retailers tend to buy specific products can inform how often brands should refresh their LeafLink menu selection and update their inventory. LeafLink Insights tool myBI can help track inventory changes and alert sales reps when it’s time to reorder.
Brands can also look at this data to understand how markets change as they mature. Generally, newer cannabis markets tend to gravitate towards Flower; as a market matures, product diversification increases and we see a greater variety of product offerings. This could be why younger markets like Ohio are buying more Flower and re-ordering more frequently, while more mature markets purchase with less frequency. In California, where Flower was ranked as the “Most Competitive Product”, product selection and variety likely plays a major role in the way retailers order.
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