TL:DR Version for Expired Shisha Tobacco Solutions
- Order the right flavors in the right quantity to avoid expired shisha
- Monitor your inventory and the dates
- Promote, discount and bundle soon to expire shisha
- Liquidate expired shisha quickly, don't let it accumulate
- Check all expiration dates on each shipment when you receive them
Every hookah retailer has come across hookah tobacco in their inventory that is coming close to the expiration date, if not already expired. hookah tobacco isn't cheap, and then add the state tobacco taxes on top, every box of shisha you lose to expiration dates hurts. I am talking about your bottom line, but even emotionally and mentally, these issues can cause a lot of doubt and frustration with the industry, especially when you get blindsided by large quantity of old product that you did not know was near its expiration date.
Preventing Expired or Soon to Expire Shisha
First, we need to talk prevention. There is an old saying that "An ounce of prevention is worth a pound of cure." Buying hookah tobacco wholesale from a reputable, licensed shisha distributor will help prevent purchasing already expired or soon to expire products. Second, you need to take regular inventory of your expiration dates. It's all to easy to get into the daily grind of work, work, work and forget to keep tabs on which flavors are coming to their expiration dates. Make sure you have your staff do regular checks on the product dates, and notify you if anything approaches 3 months or less to expiration. That is when we recommend taking action to move product out and avoid getting stuck with dead product.
Use Tracking Systems to Order the Right Quantities
I have had too many calls over the years from customers who one day looked at their inventory and realized they had hundreds of dollars of expired shisha that was years old on the shelf, but they had been buying these same flavors. So what happened? First in and first out is a phrase that references how to rotate your new and old inventory. You would be surprised how often old stock can get lost or pushed back on the shelf, and when the new stock comes in, you sell through the new stuff, while you have perfectly good product getting old in the back.
Another thing to consider is velocity. Do you need to order all the flavors in the same quantity? We both know that your mint flavors and blueberries will sell 10X faster than that specialty cardamom spiced banana blend you have on the shelf. It's too easy to order all flavors by the case to keep things simple, but wouldn't it be better if you got 3 cases of Blue Mist and just a few jars of Arabian Coffee? Many new POS, Accounting or Inventory software programs can help you keep track of sales velocity and the appropriate ordering levels. Take advantage of those features if you have them, and you will save and make more money in the long run. If you don't have and automated system, make sure you keep track of your sales in some way to prevent over-ordering slower specialty flavors, while under-ordering you best selling money makers.
3 Tactics for Turning Idle Capital (Old shisha tobacco) into Positive Cash Flow
When it comes to moving out aging stock there are a few strategies that can help get things moving. You want to free up that idle capital that is locked up in slow selling inventory and put it into faster moving products that flip over and over again. This multiplies your capital and cash flow as you buy and sell items repeatedly each month. On the other hand, you are paying rent for shelf space on slow movers that are crippling your cash flow and ultimately increasing your overhead each month. Here are a few ways to turn that idle inventory into positive cash flow.
This might be too simple, but it works better than you might think. The slow moving flavors are often way off to the side or pushed to the back. Put these flavors front and center on the shelf in easy view of your customers. This makes every customer consider buying they flavor as they scan the racks. Every shisha customer must subconsciously decided yes or no before moving on to the next flavor to make a decision. If the flavors are out of sight, most of your customers are making a buying a decision before they ever get a chance to consider the flavors that are not easily visible.
Free Shisha with Additional Purchases
Combo packs are my favorite way to move out old stock because it's a win/win for you and the customer. My favorite combo is "Free" shisha with any hookah purchase. Take your 2 or 3 oldest shisha flavors in stock, and when a customer buys a hookah, or spends a certain amount on other flavors and coals, let them choose an additional free flavor from your older stock. You are using the older stock you need to move as leverage with customers to spend more money on supplies, or decide to buy a new hookah. Having a couple options to choose from elevates the value and gives the customer the illusion of more choice and thus a higher perceived value, instead of feeling like you are sticking them with your old, left over Licorice shisha.
When it gets down to the wire, it's time to get aggressive. As a retailer, it's hard to sell shisha past the 2 year date. Taking a small loss while it's still viable is much better than waiting too long and having to trash everything. If you have flavors that are not moving, a 10% discount probably isn't going to make a difference. Put the flavors front and center with a 25-50% discount and get what you can while you can. As it comes down to the final month, even $1 a unit is better than nothing. If it makes you feel better, consider it a marketing cost for customer acquisition. One more happy customer now, can turn into many future visits and transactions. When you are in this position, don't be penny wise and pound foolish. Consider the big picture and give some of you good customers a great deal to keep them coming back.
What Can I Do with Shisha Tobacco after the Expiration Date?
First off, don't panic. The expiration dates on shisha tobacco are mostly arbitrary. Shisha isn't milk. Milk has a date, it goes bad, ferments and rots....Gross! Shisha, just stays pretty much the same. As shisha gets older, it may get a little more dry and the flavor will get more mild, but it's not poisonous. To get in the groove while writing this blog, I am smoking some shisha that expired over 1 year ago and it's totally fine. Now, in terms of retail sales, your options are limited. You can probably get away with a discount $1 and under bin for people to buy super cheap hookah tobacco. Get what you can, while you can, but don't hold on to it forever. You have to move on.
It's still OK as a freebie sample to toss in with other purchases, but I do not recommend trying to sneak old shisha under the radar to your customers. You definitely don't want the customer finding out they paid full price for expired product. You can lose that customer and bad word of mouth will spread 4-8X more than positive word of mouth. People love to share their horror stories, so don't be villain in your customers' next complaints. Don't let your expired shisha area accumulate, and accumulate and build and get dustier, and dustier without just dealing with it. When shisha customers come in to a retailer, and the shisha section is just a dusty shelf with lots of expired hookah tobacco, they will probably not return. We have toured retailers all over the USA, and I cannot tell you how common this is.
Another option is to work with a local hookah lounge. See if you can work out a deal with them to buy your soon to expire flavors. They can quickly liquidate them in the hookah lounge, and if you come to good pricing arrangement, it will be a win/win for everyone!
Can I Ship My Expired Shisha Back to Hookah Wholesalers for a Refund?
We cannot take back shisha after the expiration date. If you ship it back to us, we will just have to throw it away. We don't need anymore old product around here! Hookah Wholesalers cannot resell your expired products to another retailer. If at any time your receive shisha tobacco that is already expired or going to expire too quickly, please contact us immediately. We will replace any expired product or accept returns on shisha if you receive it with only a few months before expiration. Once the shisha is expired, the retailer will need to use the tips and tactics in this article to maximize its value for sale or as a bonus item with other purchases.