Lower your prices without sacrificing margins.
Sounds like a dream, right?
In the cannabis industry, this is a crucial focus because:
1) The threat of competition is high.
2) Many licensed operators are struggling with razor-thin margins.
Pre-roll manufacturers are especially vulnerable here because pre-rolls are such a labor-intensive product, where quality and consistency are everything.
Competitive pricing can make or break your business, and if you’re bogged down with high production costs, you’re at a disadvantage.
This is the reality for many pre-roll manufacturers. They overpay on labor, struggle with production bottlenecks, and all they can think about is surviving, let alone scaling.
Are Your Labor Costs Sinking Your Business?
First, let’s talk dollars and cents.
If you’re a manufacturer attempting to mass produce anything manually, your business model is already compromised.
Either you find a co-packer that is properly equipped to manufacture pre-rolls at scale (which may give you slightly better margins), or you invest pre-roll automation yourself (for exponentially better margins).
Either way, if you’re not willing to invest in proper manufacturing, you’re dealing in half-measures – which is the opposite of strategy.
In essence, automated systems – at least the reliable ones – reduce the need for manual labor, lowering wages and benefits expenses. They also minimize errors, reducing waste and rework costs.
When Forbidden Farms adopted pre-roll automation, they reduced production costs by 90 percent, and they became the top producer of pre-rolls in Washington State.
With lower production costs, you can maintain healthy profit margins while lowering prices. It’s a win-win.
Market Competitiveness
Now, onto market positioning.
If you’re dealing in half-measures and production bottlenecks, you won’t get far in the market because you’re too busy putting out fires and dealing with headaches.
But what happens when an operation makes the choice to align with a reputable pre-roll automation partner?
The lower production costs give you the ability to offer lower prices for the end consumer, which will make your pre-rolls more attractive to a broader audience in any competitive market.
However, pre-roll automation isn’t just about operational efficiency. If you want to avoid that race to the bottom, which has capped the profitability of other industries, you’ve also got to differentiate through product quality, consistency, and freshness.
The right pre-roll automation can make a huge difference with this as well.
Like Printing Money
Imagine that you do invest in pre-roll automation. You’re enjoying the boost to production, the lower labor costs – it’s like your pre-roll business has some real muscle.
And once you get that pre-roll machine paid off, your margins will be higher than you could have imagined.
As Hefestus clients tend to say – it’s like printing money.
Ready to Lower Your Production Costs?
Check out the Hefestus brochure today.
