-When hiring sales teams…commision only or base salary with commision?
We landed on base pay+commission until their commissions are way bigger than their base pay. Then it is commission only. My approach is to give our sales team as much pay as the company can possibly afford. Drop some Amazon Gift Cards too. Happy sales people sell more.
-Hiring full time staff or on boarding with brokers/sales teams representing multiple brands?
We are somewhere in the middle of these two options, mostly due to resource limitations. The excellent guidance we received on how to approach a Sales Team at our small company was to “think outside the box” and to “get creative” so we paired up with another non-competing family-owned cannabis company in Oregon and we share a small sales team. This cuts the HR/Sales Team costs in half for both small companies and increases commissions for the sales team. It also creates opportunities for additional discount incentives when a dispensary purchases both company’s products, instead of just one company’s products. My suggestion is two or at most three companies sharing a small sales team, or this will become very complicated very quickly. One word of caution here: it is important that there is not a huge difference in possible commissions from each of the two companies because it will bias the sales team efforts (naturally), and then this approach will not work.
-Going direct to distributor and ditching the traditional door to door sales model of dropping samples and following up?
We interviewed six different distributors in Oregon and we came within a few days of signing on the dotted line with one of them. We changed our mind at the last minute when someone explained to us that paying a distributor to establish new dispensary relationships for our company does not work. When you hire a distributor, your small family-owned cannabis company will end up with fewer dispensary relationships than you had before that distributor, because the distributors usually take over all your relationships, and then you are no longer personally maintaining those relationships. If you want to build relationships, go shake hands. Drop sample packs. Talk to the budtenders. You don’t get to outsource relationships; that is oxymoronic.
IF you decide to go with a distributor for your cannabis products, you should insist that the sales targets in your contract with the distributor be (purposefully) at the very high end of what they can likely achieve. Best case scenario is that they meet your very high sales targets. In addition this approach gives you the option to quickly terminate the contract (assuming they are not meeting your contractual sales targets), in the event you come to realize that this distributor is not a good fit for your company.
-Hiring marketing agencies?
Marketing agencies require large budgets. If my company could afford a marketing agency, I would definitely give that a try.
That said, hiring a very good branding agency to help you define and polish your brand, and design your packaging, etc, is worth every penny of the $15K to $25K it will likely cost. It is far more difficult than I expected to get onto dispensary shelves with a crappy looking brand or an ugly product package. The only way to get an unpolished, poorly-executed, product package onto dispensary shelves in Oregon is to discount your wholesale price so much that you—literally—can’t turn a profit. I made that mistake and it has taken us over a year, a ton of stress, and too many 80-hr work weeks to recover from it. My prediction is that exactly 0% of the cannabis companies that ultimately survive in Oregon will have a crappy looking brand. In other words, poorly executed branding will prevent your small cannabis company from being successful. DM me if you want the name of a stellar cannabis branding company in Portland.
-In-house content creator on full time staff?
For us bootstrappers:
Phone a friend. Final answer.
-Attending trade shows and mingling with distributors and retailers?
Mingle with local budtenders and their Purchasing Managers for your local products. When you have a product that could be sold to other parts of the country, it might be time to invest in a booth at a few trade shows.
-Dispensary demos and cannabis cup exhibits?
I am surprised at how many budtenders tell me that Vendor Days are definitely worth every penny they cost me. They all say that they drum up interest in our products with customers that did not previously know about our products. Vendor Days have increased our sales, and that seems a pretty good reason for us to keep doing them. Vendor Days can be outsourced, if you can find the right team to run them for your company. DM me if you want the name of a great Vendor Day company in Oregon or Seattle.
Brand awareness drives sales up. Cannabis Cups and local cannabis associations are excellent opportunities to get your company logo up in front of other decision makers in your state’s cannabis industry. I now budget a few thousand dollars a year to be a co-sponsor for these types of gatherings.