If your wellness has improved thanks to the benefits of cannabis and wants to cash in on the CBD craze, then CBD distribution is definitely a route you should consider. Not only will you get to spend a lot of time with people who share a common interest and love for this recreational drug, but you can also make a pretty decent earning through this line of trade. Of the two main cannabis derivatives, THC and CBD, the latter has a much bigger market, which makes it a more profitable endeavor.
THC is the more psychoactive variant of the cannabis derivatives and is more popular with recreational users. While many people have gained a lot of value from THC in treating several medical conditions, it still hasn’t gained the same kind of popularity with medical professionals and patients when it comes to improving health. Moreover, even out of the people who enjoy cannabis for recreational purposes, there is a large number of them who don’t enjoy the “stoned” feeling that is often associated with THC.
CBD, on the other hand, offers all of the benefits that THC does, but with little to no psychoactive effects on the user, regardless of the form in which it is consumed. Specifically for people who are looking to use cannabis only for its medical benefits, CBD is a much better option. Not only does it affect the person very differently from THC, but there are many different forms of CBD that have been developed specifically for users who want to use it to address medical conditions. In forms such as tablets, capsules, oils, and ointments, people can use it to target the medical problem directly.
Let’s look at how you can start making money from CBD in twelve simple steps.
1. Business Costs
Before you can dive into making a fortune from CBD, you need to understand what the operational costs of your endeavor will be. There are thousands of businesses selling the same product, but each business has its own unique features and costs. Keeping these in view, you will either charge accordingly or you will remodel your business to make it less expensive and more profitable if you plan on keeping your prices at competitive market rates. If you are selling a unique variant of CBD, or are building your business from a brand’s perspective, pricing is not much of a concern but costing certainly is. When you start off you will probably be a one-man enterprise, but as you grow you will also have to factor in the costs of employees and more robust solutions. If you are a team starting out in the CBD business, don’t set yourselves salaries before you actually make a profit. Overall, regardless of whether you want to sell in-person or online, you should have at least a few thousand dollars in the bank which can be used as an initial investment and will also be a reserve stash in case you need money in a tight situation.
Identifying who and where your customers are will have a tremendous impact on every area of your business and will influence many other decisions that you make regarding the structure of your CBD enterprise. In fact, you could even go so far as to say everything in your business will really depend on your customer; after all, a business is all about providing goods and services that a customer needs and profiting from this gap.
This section of your research involves meticulously planning out what your ideal customer is, what is the best way to reach them, and how can you get your product to them most efficiently? It would be a great idea to stick to your strengths and develop those further. When you initially had the thought to get into CBD trading, there must have been something about the business, in terms of the nature of the work that caught your eye. Perhaps you are skilled in the kitchen and want to make CBD gummies; maybe you have the skills to process CBD from raw cannabis; maybe you are in an area where the demand for CBD oils is high, whatever the case may be, use that strength. There are customers for all kinds of CBD products, so rather than chasing profit, chase something which you can do efficiently over the long run and in which you can develop yourself as an industry leader.
In Europe, CBD is gaining a lot of attention. While cannabis has been decriminalized in Holland for decades now, CBD was never quite as popular, and in recent times people from all over the world have started demanding CBD.
You can dissect your target market in several ways. You could consider the demographic that you want to work in. Will you be better off serving a local, physical market, or are your skillset and business structure more adept at catering to international clients and customers who are physically distant from you? Do you want to be selling to individual clients or are you looking to do something on a bigger scale? Possibly wholesale or maybe a mix of both wholesale and retail?
You can also look at the kind of market you want to cater to; do you want to be a luxury, high-end CBD retailer, or would you prefer selling products for the masses?
These are all important considerations that will help you narrow down the exact market that you will focus on.
CBD is a compound that can be found in various forms such as oils, waxes, and isolates, which are then used to develop various CBD products. One of the most important things to consider when you decide to become a CBD entrepreneur is the kind of CBD product that you are going to be dealing with. Whether you want to be dealing in oils, ointments, pills, gummies, or any other form of CBD, you will need an infrastructure that facilitates that kind of product. Certain forms of CBD products will require specific storage solutions and delivery systems, and may also require you to meet certain legal requirements.
5. Business Registration
In order to be a legal business entity, you need to be registered with local and national authorities to lawfully trade CBD. The process for business registration will vary from state to state, and it also depends on the nature of your business. If you are selling CBD for medical purposes you will have a different route and if you are selling CBD for recreational use there will be different regulations in place. Getting your business registered will also give you the chance to benefit from certain schemes, services, and frameworks that are only applicable to registered businesses. You also want to research the kind of business registration that will work best for your organization, whether that is a limited company, a partnership, or a sole proprietorship.
With your business registered, you can move forward to setting up a business account for your CBD business. Having a business account not only makes managing the company finances a whole lot easier, but it also opens you up to a lot of benefits that consumer accounts don’t have. This could include reduced interest rates, enhanced returns, faster processing, and many other financial services. Having a separate business account may also be a requirement for legal purposes, and it comes in handy for tax purposes at the end of the fiscal year.
7. Point Of Sale
There are many different ways that you can sell your product, and it depends on which method suits your products and what kind of business you prefer doing. You have the option to sell it directly to people through your own network of people you know and through references. You could choose to open up a shop and operate as a physical retail store. Or you could choose to work online and sell your products either directly from your website or through an e-commerce platform. Certain products might limit the way you can sell them; oils and liquids, for example, are particularly difficult to fly to different locations due to the nature of the product. It’s still possible, but it requires a different approach.
There is licensing and documentation in every kind of business, and it depends on many variables such as where you are selling, how you are selling, how much you are selling, and other factors which are specific to industries. It’s a good idea to talk to a business consultant who knows the CBD industry, and they can get you up to speed about which licenses you will need to start operations.
9. Supporting Infrastructure
If you are selling through a physical store, you might need to consider getting a separate warehouse if you don’t have a storage room in the store itself. If you are selling online you could just store stock at home, but eventually, you will need more space, and storing at home might have its own legal implications.
Similarly, if you are selling online you will need the infrastructure to support e-commerce such as computers, high-speed internet, delivery solutions, and digital payment systems.
Physical stores have their own infrastructure which is necessary to carry out day-to-day functions, so be sure to study your business operations and invest in the right infrastructure.
Whether you are selling online or through a physical platform, as a business, you have an impact on the environment you are in, and you need to take into consideration stakeholders. These include everyone who is, directly and indirectly, involved in your business such as legal authorities, your customers, suppliers, and even the vicinity in which you operate. Make sure your business isn’t trespassing on the rights of your stakeholders as this will be very detrimental to business growth in the long run. Keeping a healthy relationship with all stakeholders can be a powerful source of growth for your business.
It’s a good idea to keep your future plans in mind when you are setting up your business. For example, if you are setting up your business online, you will want to invest in hardware and software which can accommodate your future growth plans for at least the next five years. When you estimate costs and budget your business in the very first stage you will have an idea of the amount of revenue you will be generating, the costs you will be incurred, and the number of customers you will be dealing with. An effective business structure is one that has room to accommodate exceptional situations and does not require you to reinvest in more resources because operations are bottlenecked with systems operating at full capacity.
12. Marketing And Growth
Setting up a business is something anyone can do, but maintaining growth and keeping the business alive in the long run is the main challenge. In fact, the majority of new startups, across the board, fail within the first three years of operations. The few that do survive, fail within the next five years. Those that make it out of this phase often live long lives, but it’s a tiny percentage of businesses that actually go on to become multi-million dollar enterprises. Effective marketing and a clearly defined plan for progression are vital for long-term success. Whether you are operating physically or digitally you need to identify your market, your customers, and your main unique selling points and make consistent marketing efforts in light of these three things to keep adding clients to the list and keep existing clients coming back to you.
Where CBD offers an incredible business opportunity also lies many hurdles and difficulties. However, business obstacles are part and parcel of entrepreneurship whether you are selling cars, ice cream, or CBD, and the real profit is being able to overcome any and every obstacle and to see your business dream come to life.
It is forecasted that by 2024 CBD will have a global market of nearly $25 billion which represents an incredible opportunity for anyone looking to enter this market. However, no matter how competitive or saturated a market gets, there is always a top-dog, a market leader, and there is always that one business that is hot on its tail. Business, in general, is a highly competitive market, but if you have the right skill set, the aptitude, and the work ethic to get your CBD business going, it could be a small side gig that can quickly turn into a very healthy full-time stream of income.