The hemp compound CBD receives a lot of attention in today’s market. CBD oil and other wellness products containing CBD have rising popularity in consumers looking for natural health remedies. If you want to tap into this emerging market, you need to do your research. This guide will give you an overview of the online CBD industry and how you can make a profit as a CBD online business.
An Overview of the CBD Industry
According to the Hemp Business Journal, the CBD market will reach a value of $2.5 billion by 2022. Online CBD businesses sell a variety of products, including infused food, edibles, concentrates and oils. Since legal CBD products come from hemp and have insignificant amounts of THC, customers across the country appreciate its health benefits. Joining the CBD industry means becoming part of a new wave in the American market.
The overall market prospects for CBD cover a wide range of industries, including wellness, beauty, food and beverage. If you’re planning to start an online CBD business, you could try to capitalize on various product types — tinctures, topicals and infused edibles are just a few notable ways CBD oil has emerged into the marketplace.
How to Sell CBD Online
So, you want to sell CBD oil online — or some other CBD product — but you aren’t sure how to sell CBD on the internet. Do you need a license to sell CBD? What are the challenges of getting involved in the CBD industry? What are the benefits? The CBD sector has become one of the fastest-growing segments of the hemp industry. As its popularity continues to rise, you want to be fully informed before starting your online CBD business.
As with any online business, a shop selling hemp online must follow particular procedures like generating a business plan and getting a regular business license. If you’re looking to purchase CBD from wholesalers, you may also need a resale certificate from your state. However, before you write your CBD business plan, you must understand the additional regulations and laws surrounding CBD. It’s crucial to remain informed of the shifting regulatory conditions, as the hemp industry still faces some challenges in banking, insurance, payment processing and advertising.
What Are the Laws Surrounding Online CBD Sales?
Near the end of 2018, hemp-derived CBD became a federally legal product under the 2018 Farm Bill. Businesses may sell CBD from hemp plants that contain 0.3% or less THC, the psychoactive component of marijuana. Since hemp-derived CBD has legal status under federal law, you may sell it online across states. However, we recommend keeping informed of Federal Drug Administration (FDA) regulations and reading any applicable laws in detail before finalizing any sales.
While no federal laws require a license to sell CBD, it’s vital to note that particular state and local jurisdictions do have this requirement. Some states may also have established licensing requirements for hemp growers, processors and manufacturers. We recommend that you familiarize yourself with all legal obligations, including state and local laws. Stay informed of new developments in FDA regulations and state requirements, so your CBD online business remains compliant.
At present, the FDA has approved one CBD-based prescription drug. Epidiolex is the only CBD-based product that can make health claims, meaning your marketing strategy can’t involve the health benefits of your CBD products. As long as your products are high-quality, obtained from a reputable source and marketed according to regulations, you should be able to sell CBD online.
The Benefits of Selling CBD Products Online
You may consider selling CBD online instead of in retail for advantages such as:
- More affordable set-up: Setting up an online store involves building and paying for an online presence, which both cost less than getting a physical storefront.
- Lower operational costs: Website fees and the other expenses associated with eCommerce tend to have a lower price than those required for a storefront.
- Larger audience: An online store empowers you to sell products to customers across the United States, giving you a vast and diverse marketing audience.
- Digital marketing: Finding new customers is easier and more effective with organic search strategies that help draw in consumers looking for your product.
- Sell product 24/7: An eCommerce store allows consumers to shop for your products 24 hours a day, which can open the door for even more potential sales.
- Increased scalability: Many online businesses are capable of rapid growth due to having a smaller overhead, larger customer base and improved inventory optimization.
Thanks to eCommerce technology, you have an accessible option for selling CBD.
How to Start a CBD Online Business
Beginning your online CBD business involves the following steps:
1. Register Your Business and Web Presence
Complete the necessary forms to become a business under federal and state law. First, you’ll need a regular business license to sell CBD online and may require a more specific license depending on your state laws. A resale certificate could be vital if you need to buy products wholesale to avoid paying sales tax. Once your documents are in order, you can establish a website or selling platform account.
2. Choose a Reputable Supplier
Look for a reputable CBD supplier to become your partner. Remember to research their pricing, sourcing and extraction processes — you want to validate the product’s quality to your customers. Reputable wholesalers typically provide lab testing results detailing the product content. Ask to see any additional pesticide testing, residual solvents testing and microbiological testing results.
3. Set up Your Inventory Management Software
Install a CBD inventory management solution like Finale Inventory to automate your operations. As a cloud-based inventory management system, Finale Inventory will scale with you to accommodate the growth of your business. For fast-growing industries like hemp, the ability to expand your storage space as needed is essential. Finale Inventory offers better control of your inventory without spending time and money to upgrade your devices.
4. Market Your CBD Business
Marketing CBD products is challenging, especially since typical avenues like Amazon or paid ads can’t be applied as they usually would. To successfully market your CBD online business, you must build lasting relationships with your customers. Leverage SEO by publishing well-researched content and using organic search strategies to attract and convert customers who are already interested in your CBD products. Meanwhile, customer loyalty programs can help you retain new shoppers.
With proper research and due diligence, you can start a profitable, reputable and legal CBD business online.
CBD Inventory Management Software From Finale Inventory
When dealing with the cannabis, CBD and dispensary industry, it is important to closely monitor your inventory to avoid major fines, revocation of your license or arrest. Finale offers one of the best solutions for CBD & Dispensary inventory management. Our cloud-based integrated WMS system gives your business the necessary tools needed to meet your regularly enforced inventory audits.
- Preventing Stock Outs: Prevent costly stock-outs by setting reordering thresholds. Or, save time with Finale’s dynamic reordering features to handle the numbers for you. Finale can calculate reordering points based on the product’s sales velocity to make smarter purchasing decisions for restock forecasting, allowing you to keep your carrying costs low.
- Lot Traceability: Track your CBD inventory by unique lot ID or serial numbers, location, created date or strains. Finale ensures clear traceability of your products and makes it easy to track lots from the time when you receive products into your inventory to the time you actually sell the particular product. Leverage the mobile barcode scanner to scan the lot ID quicker.
- Robust Compliance Reporting: Finale allows you to perform daily, monthly and yearly inventory audits. Compare physical counts with inventory records. Consistently reconcile your cannabis inventory and run sales, accounting, stock and variance reports to ensure there are no discrepancies.
- Integrations: We understand inventory tracking is useful for many aspects of your business. Finale offers numerous integrations with industry-leading marketplaces, shopping carts, POS and shipping software to reduce the need for file transfers and manual processes.
- Barcode Scanning: Finale offers wireless barcode scanning capabilities to automate shipping, receiving, picking and packing. The application is available on Windows Mobile and Android OS handheld barcode scanners. You can also install the Finale Inventory barcode scanning application on an Android phone by downloading it from the Google Play store.
- Pick, Pack & Ship Solution: Our product’s pick, pack and ship functionality ensures that warehouse workers pick the correct items, leading to improved overall accuracy, efficiency and accountability which increases customer satisfaction.
- Data Security: Rest assured, your cannabis inventory records and data are encrypted both to and from the web browser. We have provisioned capacity across tiers significantly beyond what is required for regular operation. Our secure cloud-based system can save you time and money while storing necessary records required by local governments.
Finale Inventory makes managing your store’s CBD inventory management simple. Coordinate customer orders, selling platforms, reordering points and more through our easy-to-use solution. When you count on Finale Inventory, you can organize your products in one space that updates across your online stores. With a customer representative helping you set up your software to suit your needs, you can lead your online CBD business to success.
Discover a Personalized CBD Selling Inventory Software
To find out what Finale Inventory can do for your business, try our free 14-day trial today. Our personalized approach to customer service helps you craft a solution that meets your specific business needs.