Creating Your CBD Product Line
The CBD products craze is on, bringing in lots of “entrepreneurs” of all persuasions. Here are some things you need to know when thinking of starting your own CBD product line.
We have been at CBD private labeling for some time now. The inquiries we get from people wanting to offer their own CBD products are all over the map in terms of business scale. This post is geared more towards the startup CBD product company. Consider it free advice. It’s by no means meant to discourage anyone (we want more customers!) but these are things that need to be though of. Luckily we can help!!!
1) There is a lot of aspiring competition. Little Ol’ Us currently (as of 11/17/2018) receive about 15 email inquiries and 5-10 phone calls from folks wanting to start their own line of CBD products. It still boggles my mind. Its exciting, but it also shows there are a ton of people out there wanting to do the same thing.
2) You need to have a creative marketing plan. I come from a digital marketing background, I consider myself kind of an expert as I owned a web development and marketing firm for 12 years. As of today, you cannot do much, if any, paid search (SEM) on Google, Yahoo or Bing. Just about all of your online CBD product line’s presence needs to be with SEO (organic search engine rankings) or whatever social media platforms will have you, Instagram is by far the most popular. Not to mention CBD product e commerce websites are shut down all of the time. Either the platform they are built on will not allow CBD products, or the merchant process won’t either. Shopify told me they absolutely allow it (they even directed me to a merchant), but I have an associate that was recently shut down. Squarespace is out for e com as well. Most people go offshore for their payment processors, although i have heard of a few domestic companies.
If you are going to rely on SEO, then you need to work with someone that knows what they are doing. SEO is about a properly built/structured website that continuously pumps out relevant content (there’s more to it, but no time here to explain). It’s certainly not rocket science, but it is time consuming. It will be hard for you to run your business and focus on all of the digital creative.
Brick and mortar stores are the other option. I don’t have a lot of experience with retail so can’t help you much here. I’d imagine its a lot of knocking on doors and cold calling into stores.
3) Banking is still difficult. We use a local credit union that tailors to medical cannabis caregivers and allows for hemp and CBD products. The large majority of entrepreneurs across the country do not have this luxury. There are private banks domestically that anyone in any State can use, you just need to find them. The fees are high, but they got ya.
You cannot accept or send wires in a lot of banks that even allow CBD products. If you setup a wire account, you need to tell the sender to not put hemp or CBD in the notes. PayPal can shut you down if they think you are selling CBD products. I have seen websites blatantly using PayPal as a payment gateway, its just a matter of time. Again, you need to be vague and no one mentions CBD. The good news is I’m hearing more banks coming on board. And if the new farm bill passes I’m sure this will open up more.
4) Everyone wants to be an Amazon superstar. Half of the inquiries we get are from companies that want to sell a ton of product on Amazon. I get it, its Amazon. But its not that easy. If all of the companies that inquiry with us actually sold CBD products on Amazon then it would be ridiculous. People don’t seem to understand that AMAZON DOES NOT ALLOW THE SALE OF CANNABINOIDS. Yes, people still do it but it does not say Hemp or CBD anywhere. Its not allowed. So most of these companies are making their products with NO CBD at all and using hemp seed oil. Its a rip off.
There is more, but its late and I’m tired. If you want to do this right, then reach out to us. We can provide you with the amazing product and guide you along the way including all of your marketing needs. But be prepared to spend some money. We have a low MOQ of 500, so the initial investment in bottled, labeled and insurance covered products is only $10 -$15,000 for 500 units for a small starter CBD product line. You will then need a website & SEO among other things. Be serious and be persistent and you can do amazing!