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10 Steps to Begin Selling CBD

It seems to be everywhere these days….because it is. All sorts of CBD brands are popping up and the market is growing fast. Retailers that sell CBD products from trusted brands include, but are not limited to, health food stores, gyms, yoga studios, smoke shops, and especially online.

Here we have broken down 10 steps that will help you on your way to starting your own CBD brand and getting a slice of this growing pie.

Get Your Licenses

Selling CBD begins with a few simple licenses. For one, you will need a business license. Most small businesses will register as Limited Liability Corporations (LLC). You can do some more research and sign up on your local government website. Registration usually incurs a cost of $100 or more.

Next, you will most likely want a Resale License. Again, more information about the specifics of your state can be found on your local government website. Having the Resale License will allow you to purchase products from wholesalers.

Research the Market

The recent legalization of CBD with the Farm Bill (2018) has opened the floodgates to CBD businesses. High levels of competition in the market require that newcomers be educated in what products are already out there, what can be improved or done cheaper, and how can you bring value to the customers of the CBD market. Sales are expected to exceed $20 billion by 2024 and knowing the market inside and out can give you and your company a competitive advantage.

Pick Your Products

The reasons people take CBD range from pain to sleep and from anxiety relief to calming their pets down. Understanding why people take CBD products can help you develop your own products to provide the customers’ value.

To begin with, there are several types of CBD extract and different methods of extraction. Knowing the differences between isolate, full-spectrum, broad-spectrum, distillate, and nano extractions. Each has its own properties and some extracts are better suited for certain products than others. Each has its own level of cost as well. Checking to see what competitors are using may be of use. Once you have decided what products you want, whether it be CBD oil wholesale or CBD flower wholesale, now it is time to find your source.

Pick a Supplier

Once you know what products you want to sell, determining where to get them is the next step. On one hand, you could source raw materials and make them yourself. On another hand, you could do what is called white labeling or private labeling products. This is when you purchase another brand’s products and put your own label on it (with the permission of the parent brand of course). This is a very common practice and you will eventually run into some options when searching for your CBD wholesale supplier. On the third hand, you can dropship or sell other companies’ products through your own platform. This method of selling is popular because it usually does not require you as the seller to purchase any products from the company. When a sale is made on your platform, the brand whose product was sold ships out the purchased item and you get a cut of the sale.

Determining which companies to work with takes a bit of detective work on your part. Working with a transparent company you can trust is highly important if you want to sell quality products that bring value to your customers. Besides looking for pricing, certificates of analysis (COAs) should be easily accessible for every product, and raw material. These COAs should at the least tell you how much CBD is in the product as well as how much THC. Make sure the levels of CBD are what is advertised and the levels of THC are below the legal limit of 0.3%. After finding a trustworthy supplier and your products/raw materials are purchased, it is time for some product lab testing of your own.

Time for Testing

With product in hand, it is time to send for lab-tested results.  The extent of your testing is up to you, just keep in mind that the customer should be looking to your company for transparency and quality assurance. Potency tests usually cost about $75 and they will tell you exact levels of which cannabinoids are present in your product. Additional testing includes terpene levels, small metal detection, and pesticide testing. The prices of these tests vary, so expect a price tag of several hundred dollars for a complete testing package. The testing of your products should occur with each batch. So every time a new batch of your product is packaged, that batch should be tested and the results updated for the customers to see. Never release a product with above the legal limit of 0.3% THC.

Create a Brand

Identifying your target audience is a great way to start building your brand. This can help you customize the content you create to please whoever your audience may be. Developing the look for your brand is not as easy as it may sound. Your logo will say a lot about your company. It is important to design a logo that your audience can connect with and relate to. Simple, easy to understand, and staying on the message are some good tips to follow.

When it comes to packaging, there are so many options out there. Mylar, glass jars, plastic containers, white lids, black lids, wood lids. Then you have to consider the sizing of the packaging and if it needs to be child resistive. Is the label printed on the container or are they applied as stickers? And speaking of labels, the information printed on there has a few items customers and regulators want you to have. These are including, but not limited to, an FDA warning, dosing, nutritional facts, ingredients, certifications, the location where it was packaged, any disclaimers, a barcode, and a QR code. Having a QR code may not be so obvious, but it can be used to direct customers to the lab results for each product.

Build Your Website

Selling CBD online is not as easy as posting your products on Amazon or eBay. The sale of CBD and CBD products is not allowed under the current regulations of these companies. Building your own website is the way to go, but be sure to use a website builder that does not have any CBD restrictions. The CBD Sales Suite by BigCommerce caters directly towards the needs of CBD and Hemp companies. The platform offers specialized tools with the marketing potential to aid in your company’s growth. Shopify is an immensely popular platform and many small and large companies use it to sell CBD. The setup is straightforward and many consider it quite easy. Using the WooCommerce Plugin with WordPress is the most customizable way to set up your website and the results can be stunning. This platform requires much more time and effort to build and maintain.

Designing your website to find your brand is important to maximize your connection to the customer. Pick a color scheme and theme that compliments your logo and packaging. Add high-quality product photos to the product page and make sure to link the lab results. Quality content such as an ‘About Us’ page or a blog section help make your site appear more professional in the eyes of the customer and search engines. Linking social media accounts and having a way for customers to contact you helps connect your company to the customer. One thing to avoid is making any sort of medical claims on your site. These are a big no-no and could have negative effects on your company’s ability to sell CBD products.

Open a Bank Account & Find a Payment Processor

Not every bank is going to welcome you and your CBD business with open arms. Because of the restrictions in cannabis banking, some banks may refuse to open an account for your company. National chains are hit or miss. You may also focus your effort on local banks to your area.

With an account set up, you next need a payment processor to start accepting payments for sales from customers. Again, this can be tricky as CBD products are considered ‘high-risk’, and many payment processors will not take you on. When searching for a high-risk payment processor, you will want to consider several things. For one, how much experience do they have in high-risk processing? Experience means protection of your assets so this is of the utmost importance. Other high-risk industries include gambling, pharmaceuticals, and online dating. Integrating the payment processor to your website should hopefully be smooth and easy. And if there are issues, having a helpful customer service line is a big plus for any payment processor to have.

Marketing and SEO

Now it is finally time to let the world know about your superior CBD products and where to find them, buy them, and share their experiences on social media. It is time for marketing! But guess what? You can’t just advertise on Google, Instagram, or Facebook because of their ad restrictions.

Some ways you can market include creating high-quality content for your site. High-quality articles such as “CBD: 101” or “CBD Dosing Explained” will help the customer to better understand your product and to connect with you. It will also help boost your site ranking with google (domain authority).

Genuine interaction on social media is the best way to gain followers. Commenting on posts, using relevant hashtags, and sharing relatable content will yield positive results. Getting influencers to rep your brand on social media can help boost your online image. Many online shoppers find products via recommendation from an online personality they follow. Offering these influencers 10-20% of each sale they generate may be a way to get them interested in promoting your product. Choosing who promotes your product is important because you want them to have a following with your target audience and to not already be working with many competing brands.

Working on your search engine optimization (SEO) is a long-term marketing strategy, but it pays off. Implementing targeted keywords to your site and blog articles help your site rise in the google search result listings. When someone googles, “CBD online”, they are very likely to click one of the top results. Getting your site to the top of this list is a result of strategic keyword implementation, website structure, and a few other tricks.

Attending events or shows allows you to connect to your customers on a personal, face-to-face level. Having a welcoming face accompanying high-quality products instills trust in the customer and helps them remember you next time they want to buy a CBD product. These events can also be great places to connect with others in the industry and build contacts.

Fulfill Orders

Orders are rolling in and now you have to get these products to the customer. But how? Managing inventory, packing orders, and shipping the orders are all part of the process. Many smaller companies do this in-house, but as you grow, you may find it necessary to use a fulfillment center. Companies such as ShipBob can help you manage fulfillment so you have time to work on product development and marketing.

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