In the last several years, cannabidiol, more commonly known as CBD such as CBD self-care, has become a household name worldwide. The main reason behind its growing popularity lies in the wide range of health benefits this substance offers to its users. Given the buzz this oil has created, the fact that more and more people are considering entering the CBD industry is quite normal and expected.
If you’re thinking about dipping your toes in these business waters, there are certain things you need to know and be careful about. With projections of surpassing $22 billion in sales by the year 2022, this business sphere is attracting increasing numbers of entrepreneurs who want the piece of the booming market for themselves. However, the road of becoming a successful CBD retailer is not without its challenges.
Let’s take a look at what are the appropriate steps for those who want to make names for themselves in this industry.
Understanding The Legal Aspects of the Industry
When it comes to laws and regulations regarding cannabidiol, they differ from country to country. The European market is incredibly complicated, with rules varying from one member of the EU to the other. In the USA, the situation is better defined, but there are still clear rules you need to follow if you want to sell products containing CBD.
You need to learn about the difference between hemp and cannabis CBD and why they have different statuses in the eyes of the law. Both of these plants are closely related, but the distinction is important for legal reasons primarily.
CBD oil can be extracted from both of them but the levels of THC. Industrial hemp has less than 0.3% of THC and as such is legal to cultivate and use in all sorts of products. However, the case is not the same when it comes to cannabis. It contains much higher THC levels and is considered illegal to sell by the federal law.
So, if you want to become a retailer in this market, you need to do these things first:
- Gain knowledge about the CBD products
- Obtain a necessary business license and EIN/TIN number for your company to avoid any legal problems
- Learn about the local marijuana laws. In the case that it’s illegal in your area, make sure your products are containing oil extracted from hemp
- Ensure total transparency regarding the products you offer
Create a Strong Business Plan
To develop a successful business, you need to have a solid plan for your company. These guidelines will allow you to navigate the competitive market and stay focused. Although this is a growing industry, you still need to be able to understand who your customers are and how to reach them.
There are multiple factors you can and should take into consideration when creating a business plan. These factors will be instrumental in securing and insuring your success in the market. You need to know what sorts of products your customers are looking for and if they have any specific demands. Also, you need to make a decision about what market niche you will be concentrating on (beauty, health, food, etc.).
With any business, finances are a huge part of this plan. You need to define the sources of money you will use to fund your enterprise and make sure you also have alternative options in the case of any and all emergences. The strategy also includes coming up with a brand name as well as packaing that will be recognizable and easy to remember.
Try not to make overly optimistic sales projections. Stay realistic and promote your products to the targeted audience. This step demands a lot of research on your part but the time and energy you invest in creating a good business plan (as well as a marketing and communication plan) will help you get to the desired goal.
Partnering with Right Suppliers
Starting a CBD retail company also requires finding suitable suppliers, unless you want to grow hemp and processing it on your own. To select a wholesales partner that will be able to meet customers’ needs, you have to keep in mind things such as the quality of product manufacturing and testing. After all, you want your brand and your business model to be the synonym for first-class goods and impeccable customer service.
When choosing a partner, make sure they are using certified labs to test their products. Don’t just ask for the name of the partnering lab, go to their website, and see if they are transparent with their work. The majority of testing facilities as well as wholesale suppliers, will make their results readily available to the public on their website as well as their social media platforms.
You want to know if the supplier is testing its products for hemp contaminants such as heavy metals, mycotoxins, and pesticides, among others. Selling goods that can potentially cause harm to other people can potentially run your company into the ground. Pay attention to the manufacturing procedures your providers are using as well. There are multiple ways CBD can be extracted, but some of them will leave undesired contaminants, making them unsafe for human consumption. An organically grown hemp would be the perfect solution.
Setting Up a Shop
Most of the time both CBD suppliers and retailers use online platforms to sell their products. The online shops are not only convenient in the sense that you can purchase the product you want and have it delivered right to your doorstep but also in a way that they provide customers with a certain level of privacy.
An experienced web developer will know how to create a user-friendly online store, allowing visitors and potential buyers to have a hassle-free experience. Make sure all your merchandise is properly displayed in the catalog and don’t forget to add product descriptions. You should also provide contact information like email an consider offering live chat so that customers can reach you with any questions they might have.
Starting a CBD retail business makes sense given the growth predictions for this market but establishing a successful company still requires a lot of hard work. These are some of the necessary steps you should consider taking if you want to create a recognizable brand and a large community of frequent buyers and repeat customers.