Ever dream of a career as a CBD oil distributor, and opening your own store?
Why not? Commercially, cannabis is high as an elephants eye and there's money to be made in cannabidiol (CBD) industry that's expected to hit $20 billion in 2020 and $22 billion by 2024.
The demand is high among the burgeoning number of users who have turned to CBD products for various health and wellness reasons, and against chemical-based bio-pills turned out by the big pharma companies.
What's in it for a fledgling CBD oil distributor and what's the best path to cashing in on the CBD craze?
Plenty, industry insiders say. But you have to know where to look and what specific steps to take if you're going to land on top of the heap as a CBD oil distributor.
How to Become a CBD Oil Distributor in 7 Steps
With all of that opportunity and wealth-creating opportunity at hand, how do you actually become a CBD operator?
Like most small businesses that are just getting started, you need to get the basics right, and go from there. Take these steps to get going on your own CBD retail business:
1. Create a Business Plan
Any small business, especially one in a "wild West" industry like the CBD business, needs an action plan upfront.
That means writing up your own business plan, which should focus on the following themes:
- What is the cost? Financing is the number one issue for a new CBD retail business owner. Starting that business online will be less expensive, although you'll still need a quality distribution channel to get the right products to your customers.
While figures will vary depending on location and whether you open a physical shop or an online shop, you'll need at least $5,000 up front to get up and running with your own CBD outlet.
- Who are your customers? You'll also need a marketing plan to attract customers before you open up for business.
Fortunately, CBD products cover a lot of ground, health and wellness-wise, so you can market your CBD oil products to a wider audience of consumers. You'll need a good, educational website where customers can peruse your product line and figure out what product works best for them. You'll also need to establish a solid social media presence, and get the word out on Facebook (FB - Get Report) , Instagram, Twitter (TWTR - Get Report) , and LinkedIn (for business support.)
Getting out and meeting your customers at local festivals, block parties, sidewalk vendor outings, and at special health and wellness events in your community is a must. Chances are that your best customers will be the people you meet in your own community.
- Figure out how long will it take for you to make a profit. Like any small business, your CBD retailer will need to plan out your company's financial future, so you'll have a good idea how much money you'll need to keep the business afloat during its first year or so.
That means engaging in some small business financial forecasting, using your budget, your recorded and estimated cash inflows and outflows, and your own financial picture to see how long your company can last as it gets on its feet.
Use a good small business digital financial package like Quicken, Norton Small Business, Wave, or Xero (XROLF) that specialize in tracking new small business financial performance, while offering the capability for estimating future revenues and expenses.
2. Choose Your Business Name Selecting a name for your new cannabis business is a big deal. A good name sends customers a message that you're an expert in the CBD field, and you have the products and customer service they expect when doing business with you.
By and large you want a name tied specifically to your industry, that sounds good when it's spoken aloud, and that conveys a unique benefit to your customer. Be specific and don't use initials (which typically don't stand out to customers.)
Test your name on Google AdWords to see how it might play for keyword usage and make sure you're not using a name that's already in use. Check with GoDaddy (GDDY - Get Report) or other internet domain sites to make sure the coast is clear for your CBD company's new name.
3. Get a Business Bank Account For tax purposes alone, it's not a good idea to merge your business and personal finances.
Your bank or credit union will be happy to set up a business banking account for you. Make sure it has low fees, the ability to move money around, offers a business credit card, and even has access to a line of credit or personal loan attached, in the event you'll need the money.
4. Pick a Shop Depending on your unique goals and needs, that means deciding to open a brick-and-mortar CDB store in your city or town, or rolling out an online CBD oil products site.
The pros and cons are many. Just know that a brick-and-mortar store adds rental and upkeep costs that far supersede the creation and maintenance of a CBD oils sales site. Going online will also mean you have a larger audience for your wares.
On the plus side, a physical store gives you direct engagement with repeat customers - people you'll get to know and build relationships, which is the cornerstone of any good small business.
Of course, you can do both and open an online an offline CBD oil outlet, but that means extra work and extra cost. Again, check with business owners who've done both, and ask about their experiences opening their CBD businesses.
5. Get LicensedWhile selling CBD oils is perfectly legal, and you won't need any special business licenses, you will need a standard business reseller's license, and that's mainly for selling CBD products online. Check with your state, city or town to see what, if any, other licenses you'll need to open your CBD oil retail business.
6. Decide What Products to Sell Lastly, you're going to need a diverse array of CBD products to sell, even beyond selling CBD oils.
Adding gummies, tinctures, and vaping products and accessories will give you more opportunities to earn revenues, and will also help you build a bigger and more diverse CBD clientele - which is the idea when you open your own CBD business.
7. Partner With a CBD Distributor There are thousands of companies across the globe that wholesale cannabidiol products and treatments. Job one is to winnow those numbers down to choose the CBD company that best meets your distribution needs.
When managing that distribution process for your store, outlet or online CBD business, keep these criteria in mind.
- Make sure you're dealing with a legitimate company. While most CBD companies strive to deliver quality products and services, there are outfits that will cut corners, offer inferior products, and/or overcharge for their cannabidiols.
One way to check and see if the products you're buying are high quality is to ensure the CBD matches up to its lab specifications.
Make sure the company offers a legitimate third-party lab testing source that can provide you with product specifications to make sure all CBD products have been tested and surpass quality standards.
- Get references. Don't do business with a CBD wholesaler who won't provide references. You'll want to hear from other cannabis product sellers who've worked with the distributor you're vetting, and can vouch for their quality product and dependability.
The good news is that most cannabidiol sellers are happy to be in the business and are willing to help a new CBD outlet get on its feet.
Getting good references for wholesalers is a good place to start. Check out industry organizations like the National Cannabis Industry Association (NCIA) and the National Hemp Association for guidance on finding good sources for distributor references.
- Check logistics and customer service. Does a potential CBD distributor go out of its way to get you the product you need, when you need them? The distributor's website is a good place to get information on the company's business model.
Customer care should be at the top of your "check-up" list, too. When vetting a CBD distributor's web site, check to see how prominent the customer service number, email, or online contact widget is on the site. If you don't see it on either the home page or landing page, that's a big red flag.
When you're actually doing business with a CBD distributor and you have a problem, you'll need that problem resolved right away. Getting through to customer service will be a priority, so make sure that's a priority with the distributor, too.
- Check your distributor's social media channels. When you land a good CBD distributor, you're landing a business partner. Any good business partner knows that its job goes beyond the basic delivery of products. It should also be helping you market its products to the world.
That's where a good social media operation comes in handy.
If your CBD distributor is highly active on Twitter, LinkedIn, Facebook , and Instagram, that's a great sign.
A distributor who's out there on the digital stage educating and promoting its products - the ones you are selling in your store or outlet - means that you're working with a distributor who's passionate about the CBD industry and believes in its (and your) products.
What Is a CBD Oil Distributor?
A CBD oil distributor is primarily a seller, either on the retail or wholesale side, of cannabidiol products. For the purposes of this article, we're focusing on the retail side of the business, where you'll open your own CBD store or online sales site.
Cannabidiol, more commonly known as CBD, is in the cannabinoid family, and is one of 100 strains of cannabis that is embedded in a cannabis plant. CBD, however, is not tetrahydrocannabinol (THC), the more sensually impactive ingredient found in a cannabis plant - it's the compound that gets users "high" when they consume cannabis orally.
That difference puts you on the right side of the law in most states, as a CBD distributor. Unlike THC, CBD doesn't get users high psychoactively, but does offer health and wellness benefits for common maladies like anxiety, depression, diabetes, and cancer, among other medical issues.
CBD is also becoming increasingly well known for alleviating pain associated with muscle and joint pain, inflammation, and migraine headaches.
Why Would You Become a CBD Oil Distributor?
Helping people better cope with their pain is a big attraction for CBD oil distributors - right up there with making a good living financially and in being at the forefront of one of the most intriguing health and wellness revolutions that's come along in decades.
Yet there are other reasons for selling CBD oil to the public and to cannabis product providers.
Everyone is a customer. CBD, like everyday commodities like soap and cereal, appeals to a wide spectrum of the U.S. public. There are cannabidiol products for grade schoolers and there are products for geriatrics, and for all demographics in between.
For four-legged friends, too. Cannabidiol products go beyond the human realm, too. There is no shortage of products, for example, for pets, as well. It's rare to get into a livelihood where you can sell your product to just about anyone on two legs or four legs, but that's the opportunity that comes with a career in CBD oil distribution.
You can market your CBD products for wellness use - not just illnesses. More and more, cannabidiol products are being marketed as a healthy lifestyle choice, not just as an intriguing new treatment for anxiety, inflammation or depression. That opens up whole new avenues of sales and distribution channels for your business, allowing you to help more people earn a more robust income as a CBD oil distributor.
People will pay for your CBD products. While many CBD products, like gummies or vapables cost $10 to $20 or so, many cost way more at the counter - as much as $150 for products like Pure Kana (1,000 MG) or $100 for Hemp Bombs, a popular CBD product.
While the lengthy extraction process does push CBD prices up, margins are high due to high demand and the fact that CBD products are still in their infancy, and pricing stability really hasn't occurred yet.
The CBD market is expanding. As the year-to-year growth rates for cannabidiols continue to grow (to an estimated $22 billion by 2024), there is a remarkable shortage of Amazon-like industry behemoths who control the cannabis industry. In that regard, there is plenty of room for business growth, and thousands of retailers who'll buy your products.
The Takeaway on Opening Your Own CBD Oil Retail Outlet
It's a wide open market for CBD products in the U.S. and abroad, with new cannabis companies opening every day.
That's why it's important to get going now on your new CBD retail business, and to figure out what your cannabis company brings to the table, and what separates it from the pack.
The money and the opportunity to run your own show as a CBD business are right there in front of you - it's up to you get the ball rolling and start your own CBD oil empire - one droplet at a time.
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