The rush to sell CBD online is here, but it’s not as easy as you may think.
The CBD industry is booming with estimated US CBD sales to surpass $800 million this year alone. And there is no slowing in sight. By 2022, US CBD sales may reach $1.8 billion.
This is certainly a clear call to action for anyone considering selling CBD online. The industry has had no shortage of new sellers, some not so predictable. Sure, there are those who have been in the cannabis industry for decades and moving toward CBD products. But there are also dads, moms, even grandmothers building businesses around CBD.
Here are a few interesting statistics:
- Hemp-derived CBD is legally available across North America thanks to the 2018 Farm Bill
- Consumer demographics are highly diverse with baby boomers leading segment growth, increasing 25 percent YOY
- 38% of CBD users are women
- Women are also leading the charge in CBD business ownership
- CBD has decreased or stopped the use of over-the-counter pain medications among 71% of users
But all statistics aside, you need to really understand how to legally market and sell CBD products, especially online. There is no shortage of competitors, however, the supply is currently not meeting demand. People are turning to CBD for chronic illnesses, surgery recovery, acute pain and discomfort relief, and mental health issues.
Products also come in different forms, including oils, tinctures, sprays, lotions, balms, pills, and vape. Where do most people buy these products? The top three distribution channels are drugstores, online retailers, and supplement stores.
With 43% of CBD sales happening online, the time to launch a CBD business has never been better. But there are obstacles. Selling CBD online does have similarities to setting up any other online business. You need to set up an ecommerce store with a hosting provider, develop content, create social media accounts for your business, and the list goes on.
There are, however, idiosyncrasies specific to CBD products that you need to know and follow to sell online. For instance, finding a payment processor for your online store. This in itself can prove challenging if you aren’t familiar with high-risk payment processing.
The good news is that we have done the due diligence for you. The following ultimate guide to selling CBD online can serve as your roadmap to get your business up and running.
Let’s dive in.
What is cannabidiol (CBD) exactly?
Before we jump into market know-how and the actual selling bit, we should cover the “what” when it comes to cannabidiol.
Cannabidiol, more popularly known as CBD, is a natural substance that has been found to help a number of physical and mental health conditions.
One of the top questions people ask about CBD is, “Will it make me high?” This is certainly a bonafide concern, but it’s also part of the stigma behind CBD use and sales. Contrary to tetrahydrocannabinol (THC), the substance that does get you loopy, cannabidiol is a non-psychoactive.
But that doesn’t mean that all CBD products are THC free. It is a matter of how the cannabidiol is extracted and from what type of plant, marijuana or hemp.
- Greater than 0.3% THC content
- CBD extract is cannabis-derived
- There’s psychoactive potential
- Considered a schedule-1 drug in most states
- Less than 0.3% THC content
- CBD extract is hemp-derived
- There’s no psychoactive potential
- Not on the scheduled narcotics list
Will hemp-derived cannabidiol get you or your customers high? No.
However, if you fail to check with your suppliers or manufacturers where the CBD was derived, you could unknowingly be selling cannabis-derived cannabidiol, thus going from entrepreneur to drug dealer, depending on your state.
How does cannabidiol work?
This is a great question and one you should know how to answer if you plan on selling CBD products. Product knowledge is a key attribute to success, regardless of what products you’re selling.
The way cannabidiol works is actually pretty cool, and scientific. Since our bodies have an endocannabinoid system (ECS), we naturally produce cannabinoids for homeostasis. These cannabinoids, like CBD, bind to brain and immune system receptors, causing the physiological action. So when you use CBD, you’re inhibiting or activating compounds in your endocannabinoid system.
A study published in Neurotherapeutics (2015) outlined the effects of cannabinoids on seizures. They concluded that “CBD avoids the psychoactive effects of the endocannabinoid system to provide a well-tolerated, promising therapeutic for the treatment of seizures, while whole-plant cannabis can both contribute to and reduce seizures.”
It’s science. And the successful applications and outcomes for CBD use in a variety of medical health scenarios is the scientific pudding of proof.
Understanding the CBD market
You need to research the market before diving headfirst into a new business. Yes, the CBD industry is exploding. Yes, sales of CBD will more than double in two short years. However, there is still much to consider before opening up your online shop.
Knowing the “why” behind the growing sales of cannabidiol is a must-do if you want to be successful. Here are some key points surrounding the market to pay close attention to.
CBD consumers love variety, for themselves and their pets
One of the reasons the CBD industry is on an unprecedented rise is the variety of products consumers can get their hands on. If the forms of consumption only came in two or three different ways, growth would be much slower. This industry, however, is not average.
In fact, there are hundreds of ways to consume CBD, and many are pretty marketable. For instance, there are tasty CBD-infused drinks like Neorogan Hemp CBD Tea and True Breeze Pineapple Express Hemp Shots.
Some say CBD is for the dogs — literally, serving up CBD dog treats like MediPets CBD Treats and King Kalm Crunch CBD Treats. There are actually a lot of dog treats with a cannabidiol twist. This is because CBD is not only helpful to humans, but also pets. It can be used to help ease pet arthritis, injury, and anxiety.
Knowing what types of products you want to bring to market is important. You may have a whole new CBD product that could be the next big hit for humans, and pets.
Accessibility is very important to consumers
One of the main catalysts behind CBD success is the fact that consumers can pretty much get products anywhere. After the Agriculture Improvement Act of 2018, also known as the Farm Bill, passed, hemp was no longer considered a controlled substance.
This made any hemp derivative like cannabidiol, containing less than 0.3 percent THC fair game. The flood gates opened since people already knew the alternative health and wellness benefits CBD delivered.
The accessibility led to more people consuming hemp-derived products. And the increased consumption led to the explosion of CBD businesses. In fact, most CBD businesses begin with a personal story of use. It worked for them, and they wanted to share it with the rest of North America.
The stigma of hemp and cannabis is fading
Lastly, the stigma surrounding hemp and cannabis is quickly fading. After the Farm Bill passed, the production of hemp products increased significantly. This coupled with recreational cannabis legalization in a number of states, and you have the perfect positivity storm.
More people than ever are dabbling in some form of cannabis or hemp consumption, mainly to reduce the symptoms and side effects of a physical and/or mental health issue. The new positive view is also shared among political lines with 54 percent of Republicans and 76% of Democrats supporting the legalization of marijuana.
The generational gap for legalizing marijuana has also been bridged. Here’s a breakdown by age range for the support of cannabis.
|AGE||PERCENT THAT SUPPORT CANNABIS|
|18 – 34||72%|
|35 – 49||64%|
|50 – 64||57%|
Favorable views toward cannabis go a long way when it comes to CBD. Hemp-derived CBD does not have the psychoactive effects of THC, meaning that people can get alternative health benefits without the high. And if the stigma around cannabis is fading, the stigma surrounding CBD is nearly non-existent.
How to sell CBD online efficiently and legally
You know what types of CBD products you want to bring to market, and you have a strong understanding of said market. Now what? There are millions of customers to reach, but understanding the best, most efficient and legal ways to sell CBD online is next. The following 6 tips and tricks to sell CBD online can serve as your roadmap to success.
1. Get a payment processor in place before marketing
This is a big-time tip when it comes to selling CBD online. So many new CBD entrepreneurs launch a killer website and invest time and money into marketing, but forget about payment processing.
Many believe any payment processor/provider will do. After all, CBD is legal.
This is simply not the case, and you need to understand how to optimize payment processing as a CBD merchant.
For example, PayPal, Stripe, and even Shopify have yet to make payment processing for CBD products available.
Here’s what Shopify said about it, “Shopify Payments is not available for hemp or CBD products at this time. If your existing store is currently on Shopify Payments, consider creating a separate store to sell CBD products, as Shopify Payments will not be available for your entire store if any CBD product is added.”
Why? Most large online payment processors are tethered to the rules and regulations of big banks. Products like CBD are still lingering in a financial institution grey area leaving only high-risk payment processors as an option.
This is a big blow to CBD business owners, and landing a third-party high-risk payment processor has proven to be difficult for many would-be CBD merchants.
In fact, we’ve spoken to plenty of people who have been looking for reliable online processing for over a year.
However, if you partner with the right platforms and make the right connections, you can get a CBD merchant account and payment processing relatively quickly.
It is still critical to do your due diligence since some high-risk payment processors do not accept CBD businesses that sell ingestibles online.
2. There’s a lot of organic search value for CBD
Once you have a payment processor in place (very important), you can begin your marketing efforts. However, sometimes the best place to begin is search engine optimization (SEO). Like most businesses, increasing your online visibility via SEO tactics can be affordable and quite effective.
When it comes to CBD, you have a real chance to reach customer organically since the industry is still relatively new. There are, however, a lot of elements that go into SEO, such as website load time, product description optimization, backlinks, and keywords.
After you launch your site, your primary SEO aim should be backlinks and keyword optimization. For example, you can write guest posts about CBD and add a link to your website in the post. Or you can enlist the help of affordable companies that can help you do the heavy lifting, like Linktub.
Keyword optimization will take a bit more research on your part. There are the obvious keywords, like “CBD” and “Hemp” but you’ll need to go a bit further. For instance, if you sell CBD lotion for stress moms, you can begin your keyword research using keyword search tools like Ahrefs.
Simply enter your keywords . . .
And then get a list of potential keywords you can use for your website, online marketing campaigns, and other content assets . . .
You should also be forward-thinking when it comes to keyword optimization. With smartphone and smart-home voice search becoming more popular, you should be using your keywords in the form of questions. Platforms like Answer The Public.
And get a number of questions you can leverage for voice search . . .
Once you have a robust list of keywords for your CBD business, begin implementing them on your website to net more organic search conversions.
3. Content, content, and more content
With a list of keywords and your website optimized, it’s time to create as much content as humanly possible. This is essential to selling CBD online for two reasons. One, you have more content than your competitors indexed in Google for customers to find. Two, more content helps grow your brand. This is the equation for CBD sales success.
What will your content be about? That long list of keywords you compiled to optimize your website can also be used for creating valuable content to disperse to the masses online. For instance, the above Answer The Public search for “CBD lotion” returned over 50 potential blog post titles like:
- What does CBD body lotion do?
- Where to get CBD lotion near me?
- Will CBD lotion help sunburn?
- Is CBD lotion safe to use?
The list can go on and on. With over 50 potential blog titles, you can create content for an entire quarter. And those blog posts don’t need to remain written word. You can turn those blog posts into videos, social media posts, short videos for Facebook Live, and much more.
The goal is to create a massive amount of content. Between guest blogs, blog posts on your website, and social media channels, you should be creating 10 to 20 pieces of content per day as a new CBD business online.
4. Let others promote your products via influencer marketing
If you want to cut to the chase and get your CBD products in front of people that are already interested in, or using CBD, influencer marketing is the way to go. Did you know that 17% of companies spend half of their marketing budget on influencer marketing campaigns?
And it’s ROI positive with 89% of marketers stating that ROI is better or equal to other marketing strategies.
This is a pretty clear indicator that influencers are essential to selling products and/or services online. This holds true for CBD as well.
Here’s one from health and fitness influencer Jolene Goring . . .
And micro-influencers like Vaping Kamea are recommending CBD products to their loyal followers . . .
How can influencers help you sell CBD online? Influencers can . . .
- Help build your brand into a legitimate company
- Put your products in front of already engaged customers
- Drive traffic to your website and product pages
- Leverage user-generated content
- Get content online without fear of it being removed
- Build your follower base on social media
If you have a marketing budget that can stand to lose $1,000 to $10,000, you should seriously consider investing in influencer marketing. It is a fast, reliable channel to promote your CBD online with higher ROI potential.
5. Leverage the awesome power of email marketing
Yes, email marketing!
This may seem like one of those traditional marketing tactics going out of style, but believe us, it’s not. Email marketing is actually one of the top B2C marketing channels to date. According to retailers, around 30 percent of email subscribers will make a purchase.
And if you want to keep the customers your SEO, content, and influencers drove to your business, email marketing is a must. In fact, 80% of retailers said that email marketing is the greatest tool for customer retention.
However, in order to get the benefits from email marketing, you’ll need to do it right. For example, you need to really deliver value in your email. Simply asking a customer to buy your product won’t do. Emails need to be incentivized to work. This could be a 25% off sale, a 3-pack giveaway, or a buy one, get one free pitch.
Here’s one example of providing value via email marketing . . .
But before your subscribers even get to the value inside, they need to be convinced enough to open the actual email. This is when the subject line plays a vital role. You want to have a catchy enough subject line without giving subscribers that spammy feel that makes them delete, or worse, unsubscribe.
There are also legalities you’ll need to follow when sending emails to subscribers. First, ensure your subscribers are all willing recipients. Don’t use your friend’s email list from two years ago when he had an online ecommerce store for pets. You should stray away from phrases like “cure-all” or “pain relief” as well.
Simply create honest, valuable emails and you will have pretty successful open rates and conversions.
6. Build an affiliate network to sell CBD online
One way to sidestep the marketing legalities involved in selling CBD online is to set up a strong network of affiliates. This is a pretty easy endeavor with little overhead and a pretty sizable return. In fact, affiliate marketing can generate 15 percent to 30 percent of sales.
But what is affiliate marketing? Affiliate marketing is when another retailer, blogger, influencer, etc. sell your CBD products for a small commission. For instance, you sign up as an advertiser on an affiliate platform like Commission Junction or Rakuten.
Next, you list your advertiser, product feed, and commission rate. Then you approve affiliates that want to join your program. You can even invite affiliates you think would be a good fit.
It’s a pretty painless process that doesn’t require you to do a whole lot. And the major benefit is that the affiliate is responsible for the marketing, which in turn makes them responsible for meeting the legal requirements for selling CBD online. It’s a win-win.
Taking the next step to sell CBD online with LimeLight
LimeLight has its finger on the pulse of the CBD industry. Our end-to-end ecommerce platform is specifically designed for quick entry into this explosive new market.
We can get you up and running quickly with streamlined operations in place to scale your CBD brand.
In fact, we are the leading ecommerce and billing platform for CBD.
Join the hundreds of CBD brands we continually drive toward achieving success.
How do we do it? Our industry expertise, and years working with high-risk merchants, gives us the go-to knowledge behind the complex obstacles new CBD business owners face.
From manufacturing and payment processing to marketing and fulfillment, LimeLight does the heavy lifting for you.