7 Steps to Starting Your CBD Business in 2020
CBD is taking off like nothing else. Since we’ve now come into a situation where both the EU and the US have legalized hemp and hemp byproducts that don’t contain THC over a certain amount, businesses are cropping up left and right to join the boom.
If you are not sure how to become a CBD oil distributor but are interested in joining the CBD race, you are in the right place. We’re here to give you the most critical steps you need to take to get a CBD startup on its feet.
1. Laws, rules, and regulations
Yes, CBD products of various kinds are legal, but you need to know a few things. First of all, depending on if you are in the US or EU, you’ll be facing slightly different regulations. The main difference is that the US allows 0,3% of THC to be allocated in the CBD product, while the EU has a 0,2% threshold.
Most governments allow a wide specter of CBD based products to be sold, including but not limited to oils, balms, salves, capsules, pills, etc.
Since the details of regulations are related more to the particular government with jurisdiction over your area, it would be a good idea to consult a legal advisor to help you understand your business’s legal limitations.
You don’t want to get caught up in legal issues and lose your business before you even get it off the ground.
2. Understanding your market
Another essential thing to consider is the market you intend to cover. The global CBD market might be on the rise, but your local market might predominantly not even know what CBD is, let alone what its benefits are.
Make sure you understand how much education you need to do through marketing to reach new customers. Even though there is a part of the population that is into CBD products from the get-go practically everywhere, that doesn’t always mean there’s enough of them to make your business plan viable.
3. Finding your niche
Depending on who you want to reach and your CBD oil’s primary use, you’ll be developing your own niche within a wider industry.
First of all, CBD can be used for human consumption, but being that animals also have a cannabinoid system as a part of their nervous system, they can also benefit from CBD products. The most popular CBD pet products are intended for cats and dogs, but it seems other pet products are soon to follow.
Next, even though CBD is suitable for many issues, most brands market their product primarily focused around one benefit. Be it combating stress, insomnia, loss of appetite, pain; you’ll need to decide what problems you will solve for people so you can market adequately.
4. Establishing a thorough and reliable business plan
Now, we don’t have nearly enough space to outline how to create a complete business plan here; we have to give you a heads up about it. Having an idea of what you want to do is one thing; knowing exactly how you’re going to do it is a business plan.
The same things apply here as with any other business.
5. Establish a reliable supply chain
Now, the quality of your ingredients is a significant indicator of the quality of your products. Furthermore, containers, labeling, and transport are also essential to ensure high-quality service.
Without these, you’ll run into trouble completing orders, restocking, managing deliveries, resolving customer complaints (which will happen), and without these, there is no consistency. A lousy supplier can also put you into a difficult situation if they don’t deliver the right potency – making the effects of the products you sell unreliable.
Find people who have a long reputation for consistent service, so you don’t get into trouble.
6. Set up shop
Brick and mortar or online shop – or both? This all depends. Try to answer these questions to get an idea of what you need to do:
- Where are your target customers located?
- Are they familiar with online shopping?
- Do you have enough finances to rent shop space in an optimal location(s)?
- Would discrete online shopping and doorstep delivery be something your customers would value?
- Is your local market big enough to keep your ship afloat?
Usually, a combination of both is optimal as it gives customers the most diverse options to shop for their favorite products.
7. Advertise
Finally, when you know how your shop will be set up you’ll need to figure out the best way to market your brand. Again, this is something best decided when you know who you’re selling to and how you’re doing it.
We hope this helps you set up a successful business. We wish you luck and success on your journey.
