How to turn $50 into $1,500
The average cannabis dispensary spends an average of 1% of the sales price on their product on packaging. While that may sound like a small percentage, it’s actually a really small percentage.
Packaging of products generally run 3% to 7%, with some industries spending as much as 10% of the purchase price on packaging in order to stand out on the shelves.
So, we posed the question… what would happen if that 1% average was increased to 2% and branding and custom packaging was used?
Based off some loose unofficial math it looks like the below.
Sales Price: $50.
Current Packaging 1% average: $0.50
Studies show an increase of 32% of new/return & referral purchases with custom packaging/branding.
So if a 100 customers spent $50 each ($5,000) and 2% budget on packing was used ($100); there should be an estimated increase of $1,600 in sales.
What does this all mean?
It means that by spending 1% more on packaging $5,000 x 2% = $100 ($50 more than current)
a dispensary should see an increase in sales of $1500 (after increase packaging cost). That is 3,000% return on investment.
It's pretty amazing what $50 can do!