Starting your own CBD business is a great way to be a part of the growing hemp industry, which is expected to grow to a $23.7 billion industry by 2023. There are many ways to get started ranging from wholesale to private label but, int his post, we will primarily be talking about creating a CBD business by partnering with a CBD supplier who offers white-labeled products. Partnering with a CBD producer to create products under your own private label allows you to get started without all the costs associated with growing, testing, processing, and producing the product itself.
It is critical, however, that you set your business up the right way. You also need to do your homework and make sure you partner with a quality-minded supplier that offers value, saves you time and money and shares your values.
To help you out, we’ve put together our top ten tips for starting a CBD business.
1. Hone Your CBD Expertise
CBD is a complex topic, but if you’re going to sell it, you should know everything there is to know about it, including:
- The legalities in your state and anywhere you want to ship product to
- How CBD is produced and processed
- Quality control/quality assurance best practices
2. Understand The Market
Getting into the business of CBD is a good idea, but it is a highly competitive niche. You will be successful, as long as you are well-informed and understand what you’re up against. Know your competition, know your audience. Just like any business, it’s essential to write a detailed business plan so you can forecast your business potential and plan accordingly. It’s also important to understand how you plan on marketing your products. Because of the semi-legality of CBD, it makes it that traditional advertising platforms like Facebook and Google Ads are not available. Our friends over at The Shelf have put together an exhaustive guide about CBD marketing. We highly recommend taking a look as it will help you understand the reality of CBD marketing.
3. Pick a Good Name for Your Company
You will want to choose a name that is catchy and easy to remember. Avoid names that have CBD, cannabis, hemp, or anything marijuana-related in the title. Even though it is legal to sell hemp-derived CBD in all 50 states, you might have a problem with some payment processors and banks. The name shouldn’t tie you to a single product, either. You will want to diversify at some point, so think about the future.
4. Register Your Company
Once you’ve decided on a name, register your business and your web domain right away. Structure your company as an LLC as it gives you some protections without the tax burden of a c-corp.
5. Create Your Brand
Your branding is symbolic of your company’s personality and should reflect the tone you wish to strike with your audience. Branding encompasses your visual collateral (logo, labels, website design, and so on) as well as your message. If you don’t already have a designer you want to use, there are plenty of freelance sites like Fiverr, UpWork, and 99Designs where you’ll have hundreds to choose from.
6. Get Your Website Happening
You don’t have to be a web developer to have a great website. Sites like Weebly, Wix, and Squarespace make it easy for you to make a great-looking site. Use WordPress if you have some web design skills, or hire a freelancer to fill in the gaps. Whatever platform you choose, be sure to select a template with an e-commerce module.
7. Choose a Supplier You Trust
This might be the most important step of all. Be sure the supplier you choose is quality-minded and can supply detailed product testing results. Your supplier is your partner, so they should be someone you can trust to do right by you and your customers. Look for a company that offers quality-assured products, responsible business practices, and a customer-focused approach.
8. Set Up Your Bank Account
Choose a bank and set up your business accounts. It is advisable to do a lot of research before choosing a financial organization to be sure you’re getting the right terms and options for your needs.
9. Choose a Payment Processor
Although this is lower on the list, it is important you find a payment processor as soon as possible. Very few modern payment processors such as Stripe, Paypal, or Authorize.net don’t offer payment processing for CBD sales. Only recently have certain companies like Square started to accept the processing of CBD payments but you need to apply for their program and it could take up to a couple of months to be up and running. Payment processing fees vary from one company to another, so it is critical to ensure your rate is as fair as possible, but because of the “high-risk” nature of CBD processing, fees will always be higher than traditional processing.
10. Focus on Your Flagship Product
Even if you have a hundred awesome products in the pipeline, don’t dilute the waters by releasing them all at once. Focus on one product at a time and build an audience for it. Once you’ve gained some traction, roll out new ideas one at a time.
In conclusion, starting a CBD business is a smart idea. You’ll be master of your own destiny – and you’ll be helping others live their best life ever.