Cannabidiol, or CBD, is a compound derived from the cannabis plant. 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 $2.1 billion market in consumer sales by 2020.
$450 million 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.
Selling CBD products online is a common and viable option for getting started.
From our five years of experience in the CBD industry, we have gathered valuable information that will help guide you through the opening of an online CBD store. If you are contemplating becoming an online CBD oil distributor, there are a few items to consider.
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 have the ability to 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.
With the high demand for CBD oil and the benefits of selling online, becoming an online distributor may seem like a no-brainer.
However, selling CBD oil is considered high-risk and there are a few items to be aware of before beginning.
We will discuss these obstacles while offering tips to help you set up and market your online store.
Frequently Asked Questions About CBD Oil
To begin, we’d like to provide answers to the questions we most frequently receive from new CBD distributors.
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. Learn more.
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. Learn more.
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. Learn more.
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. Learn more.
Getting Started with a CBD Oil Online Store
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.
Finding a reputable supplier
As a distributor, you’ll need to find a CBD oil 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 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 a number of 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.
- 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 dropshipping and private labeling can be to your advantage.
Applying for a resale license
Many wholesalers will require a resale license to proceed with a partnership. To apply for distribution with US Hemp Wholesale, we require a resale license or EIN. Applications for a resale license differ between states and can be found online.
Choosing 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 many website platforms, though we strongly suggest WordPress. You will also need an eCommerce platform for your online store. WooCommerce, is a great option because it will give you what you need to sell online, and will eventually be able to automate into our system.
Find a merchant processor
Securing a merchant processor allows you to charge your customers for products. High-risk businesses, such as a CBD oil business, may have difficulty getting approved for a merchant account. Our wholesale partners have had success with merchant processors overseas in countries that have legalized CBD, such as in the United Kingdom.
If you are looking to partner with US Hemp Wholesale, we would be happy to provide our merchant processor recommendations. To learn more, feel free to give us a call at (844) 387-4367.
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 or not 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.
Recap: Getting Started with a CBD Online Store
In order 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.
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.
Focus on search engine optimization
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.
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. 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 that you use on your website.
The best practice is to avoid making any medical claims and stray from using terminology that would be used for medication.
Marketing your Online CBD Business
Once you have your merchant processor set up and your content loaded, you’re ready to begin selling. The next continual steps are to market your online store.
Marketing for CBD products can be challenging because common methods of eCommerce marketing do not allow for the promotion of CBD products.
Currently, our distributors have found that Google does not allow paid advertising for CBD products. Even when derived from industrial hemp, CBD oil is considered a product of marijuana, which is listed under Google’s list of dangerous products or services.
In addition to content writing, social media is another method for garnering organic traffic. While you cannot use paid social advertising, you can build a strong social following to market to.
A paid form of advertising that is viable in the CBD market is display ads. Displaying ads on high-traffic sites can build your traffic and generate new customers. Keep in mind only certain sites will allow CBD ads, so you’ll need to research this as well.
Search Engine Optimization
Again, since you cannot take advantage of many forms of paid advertising, your main marketing strategy will revolve around search engine optimization.
This will have an impact on the quality and quantity of your website’s organic traffic.
This is so important that we’ve mentioned it twice.
Keep in mind, SEO can be challenging because it takes time to see the results. Work done today may not be recognized for six months or more. Keep at it!
In this industry, in particular, you are likely to encounter many questions. It is best to be well-prepared by educating yourself on all things surrounding CBD. While, again, you cannot make claims to prevent or diagnose disease, you can lead your customer to the right place to find the information they need.
With the obstacles that come with the industry, you may be wondering why you should pursue the high-risk business of selling CBD oil.
For many, a passion for hemp is the driving factor. Those who have experienced the benefit of CBD are passionate about sharing it with others.
We encourage those who are interested in selling CBD to take a personal interest in the product. As a CBD oil distributor, you are helping people on their wellness journey, which can be a daunting, yet rewarding, task.
Do you have more questions about becoming an online CBD oil distributor? We’re here to help! Simply fill out our partner form or give us a call at (844) 387-4367.