How to Get Started Selling CBD [Online & Retail]
Due to the recent research and personal testimonials surrounding CBD, the market for CBD oil has expanded substantially.
According to The Hemp Business Journal, the CBD market is estimated to grow to a $2.5 billion market in consumer sales by 2022.
$1.3 billion of those sales will come from hemp-based CBD sources.
Whether you’ve experienced the benefits of CBD oil firsthand or you see an opportunity in the industry, you may be considering a jump into the CBD market. From our five years of experience in the CBD industry, we have gathered valuable information that will help guide you through the opening of a CBD store.
The two major opportunities for CBD retail are online and in store. This comprehensive guide will discuss both. Consider the benefits of each:
Benefits of Selling CBD Online
There are many benefits of running an online business that are not exclusive to selling CBD. In comparison to a retail storefront, an online store saves money in set-up and operational costs. After an initial a start-up fee, you have access to a broad audience. Customers who may not have found your retail business have access to your store and you can target your preferred audience (more on that later).
By becoming an online CBD oil distributor, you can cater to those who prefer to purchase CBD oil from the comfort of their own home. If CBD oil is not accepted near your place of residence or if you do not think CBD oil will sell well in your area, you still have access to other customers nationwide who are seeking CBD products.
Benefits of Selling CBD in a Retail Space
In a retail space, you have direct contact with your customers. This is beneficial when selling a natural supplement such as hemp oil, as the product often prompts many questions. In a retail space, the customer can see the product in person and have access to immediate service. Your customers are likely to require your attention and will appreciate the interaction a retail space can provide.
In a retail space, you can build customer loyalty with a knowledgeable staff and quality products. A retail space is a great opportunity to introduce the community to CBD or cater to a location where CBD is not yet available. With a retail store, you can reach the audience that prefers shopping in person. CBD products also make a great addition to a store focused on natural wellness.
Before You Begin
If you are contemplating becoming a CBD oil distributor, there are a few items to consider. To begin, we’d like to provide answers to the questions we most frequently receive regarding CBD.
Frequently Asked Questions About CBD Oil
Is CBD oil legal?
The CBD oil we are discussing is derived from industrial hemp and contains less than 0.3% THC. If sourced in this manner, CBD oil is legal to sell in the United States.
Will CBD oil show up on a drug test?
Most drug tests check for the presence of tetrahydrocannabinol (THC). Properly sourced CBD oil contains less than 0.3% THC, which is a trace amount. For that reason, it is unlikely for CBD oil to show up on a drug test. However, the results of a drug test cannot be promised. To cater to all customers, you can consider carrying THC-free products, such as our THC-free vape oil.
Does CBD get you high?
As mentioned previously, properly sourced CBD oil contains 0.3% THC, which is a trace amount. Therefore, hemp-derived CBD oil will not get you high.
Does CBD oil have side effects?
Research on CBD is ongoing, but the reported side effects of CBD oil are minor. When taken in high quantities, some have reported drowsiness while others have reported stomach discomfort.
Finding a Reputable Supplier
As a distributor, you’ll need to find a CBD wholesaler to purchase products from. Finding a reputable seller will be of benefit to you and your customers. To ensure that you are providing a quality product to your customers, you should look for the following from a wholesaler:
- Sourcing: the location of where the CBD oil is sourced from can be telling of its quality. Many reputable wholesalers source their CBD oil from the US or Europe, where farmers have had years of experience growing hemp. If a wholesaler grows their own hemp, be sure to research their farming practices to confirm that they are performing at or above standard practices.
- Extraction method: there are several ways to extract CBD oil from hemp. Some methods use harsh chemicals that can be difficult to fully remove from the final product. The highest standard of extraction is CO2 extraction, which can be complicated but is a safe and clean method.
- Certificate of analysis (COA): a COA is a report that confirms the levels of CBD, THC, and other compounds in a CBD product. This report will ensure that your customers are receiving a pure product that contains exactly what is on the label. With any supplier, you can send for a third-party test to confirm the purity and potency of the product.
- Claims: although there is research that supports the benefits of CBD, suppliers cannot make medical claims about CBD oil. If a wholesale company makes any health claims about their product, be aware that these claims are not supported by the FDA. The FDA’s disclaimer should be visible on the website. (This is required of retail stores as well.)
- Price: be wary of products that are available at an incredibly low price. When it comes to CBD oil, you get what you pay for.
- Services provided: while not an indicator of a reputable seller, it is beneficial to know what additional services a wholesale business provides. Services such as drop shipping and private labeling can be to your advantage.
Now that you are equipped with the right information to get started, we will discuss the details of selling CBD online and in store. [Click button to jump down to section]
How to Sell CBD Online
Selling CBD products online is a common and viable option for getting started in the CBD industry. Although legal, selling CBD oil is considered high-risk and there are a few items to be aware of before getting started. We will discuss the obstacles you may face while offering tips to help you set up and market your online store.
Getting Started with a CBD Oil Online Store
Register Your Business. To become an online CBD oil distributor, you must find a supplier and set up an eCommerce store. First and foremost, however, you will need to register your business. Having a registered business name is professional and limits your personal and tax liabilities. This step also provides you with the opportunity to hire employees, apply for loans, and find investors. Information for state or federal business registration can be found online.
Apply for a resale license. Many wholesalers will require a resale license to proceed with a partnership. To apply for distribution with CBD Goldline, we require a resale license or EIN.
Choose a website building platform. To begin the process of creating a website, you must first choose which website platform you would like to build your website on. Different platforms have different functionalities and the one you choose will be dependent on your business’ needs. Keep note: there are website platforms that do not allow the sale of CBD. You will need to do your research to find which platform will suit your business and allow the sale of CBD.
Currently, our wholesale partners are having success with several website platforms, though we strongly suggest WordPress. If you partner with CBD Goldline, we suggest you consider using WooCommerce, an eCommerce platform that can fully automate your sales to our system.
Find a merchant processor. Securing a merchant processor allows you to charge your customers for products. Though selling CBD oil is legal in all fifty states, banks and merchant processors consider our business “high-risk” and getting approved for a merchant account may be difficult. Our wholesale partners have had success with merchant processors overseas in countries that have legalized CBD, such as in the United Kingdom.
To learn more, call us at (844) 387-4367.
Recap: Getting Started with a CBD Online Store
To sell CBD online, you first must register your business. Then, if you are looking to distribute CBD oil, you will need to find a wholesale business and obtain the information required by the business, such as a reseller’s license. Once you are approved by the wholesale business, you will need to find a compliant website building platform and merchant processor. Once these tasks are completed, you can move forward with setting up an eCommerce store.
A Note About Third-Party Sellers
Rather than set up your own website, you may be considering selling CBD oil through a third-party seller, such as Amazon or eBay. Third-party sellers each have their own policies for selling CBD. For example, “Rich Hemp Oil containing concentrated cannabidiol (CBD)” is listed in Amazon’s examples of prohibited listings under Drugs & Drug Paraphernalia. It’s best to check with each party’s policies to confirm whether you can sell CBD on their platform. Currently, it is to our knowledge that Amazon, eBay, and Etsy prohibit the sale of CBD oil. If you search on Amazon, eBay, Etsy, etc., you may see CBD oil listed. We encourage you to keep in mind that these products are prohibited and are quickly taken down.
If you find a third-party to sell CBD oil products on, you will need to confirm with your wholesale partner that they allow their product to be sold on third-party platforms.
Setting Up an eCommerce Store
While we are not in the business of web development, there are a few eCommerce best practices that we find it important to mention.
Search engine optimization (SEO) will serve as your main method of garnering online traffic. For this reason, it will be in your interest to learn the best practices of SEO marketing. This will affect your content from the beginning, so learning SEO at the beginning stages of development will be of benefit.
Writing Frequent and Original Content
It is important to write original content and to do so frequently. Useful content that makes use of a strong SEO strategy will increase your visibility on Google and attract customers. Many of our wholesale partners have found success by frequently blogging educational information that customers are searching for. Our wholesale partners have access to our library of pictures and brochures and can reference the content on our product listings. We strongly advise you to not copy another website’s content, including our own. Google will recognize this and penalize your website for it.
When writing content, keep in mind that a business selling CBD oil does not have the authority to make claims that prevent, treat, diagnose, or cure a disease. Do not mention specific health conditions by name. Doing so will put your business at risk by the way of the FDA.
In November 2017, the FDA issued a warning letter to four CBD companies that claimed CBD could prevent or cure cancer. In a press release, a representative of the organization stated, “Selling these unapproved products with unsubstantiated therapeutic claims is not only a violation of the Federal Food, Drug and Cosmetic Act, but also can put patients at risk as these products have not been proven to be safe or effective. The deceptive marketing of unproven treatments may keep some patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.”
Be cautious with the language on your website. The best practice is to avoid making any medical claims and stray from using terminology that would be used for medication.