CBD oil is a surging commodity with an increasing market share every year. Already the number of searches for CBD information and outlets has grown over 160% in under a single year. The market is expected to surge and reach 25 billion dollars by 2025.
With all this knowledge, you might be asking yourself, how do I start a CBD online business?
Operating an online business raises unique difficulties that must be understood and addressed. Shipping CBD oil can come with additional issues due to its murky legal status in some states.
Products must be selected with care and offered to ensure you are providing customers with something they need. A vast array of private label CBD products are available on the market.
So what kind of business models do you need to take a look at? Here we will cover dropshipping, private label and MLM.
Dropshipping CBD Products
Dropshipping is a method of retail sales in which you will not keep any of your stock on hand.
Instead, you will use other CBD businesses. When a customer orders a product with you, you will purchase that product from another supplier and provide it to the customer.
This has obvious benefits, because you do not need to keep stock on hand. Anything available on the market you can sell. You only need to worry about how much is available and how reliable the suppliers you use are.
The downside to dropshipping is that you have next to no control over your product.
Your customers will receive what your supplier ships. This means that you have no chance to personalize your products. You will not be building a brand but operating as a middleman in these transactions.
In spite of this, if you do the work the correct way to grow your business, you can create a nice market share for yourself. This type of business requires far less overhead to operate than traditional businesses. It is a common retail model for many online stores, and therefore its effectiveness is proven.
Private Label CBD
In this business model, you will be buying directly from a single company. They will produce the goods and you will then sell to your customers. This is also how store brands are created and can help create powerful brand recognition for your business.
This is a business model popular with more than just CBD. In many areas of the retail economy, private label is a popular option. From generic products sold at grocery stores to cosmetics.
Done on a contract basis, you will be able to specify a great deal about your product.
A downside to this business model is that you will have to be much more knowledgeable about your product. You will have to make sure that what you are being supplied fits your customer needs exactly.
This can be an excellent option if you want to build a thriving brand and deliver good quality products. In the end, you could build a recognized brand fast. This is especially true in such a new, growing field as CBD oil.
Multi-level Marketing (MLM)
Multi-level marketing has been a popular method of selling products for many years.
In this method, you will rely on individuals to sell your products for you. You will make your revenue by selling to the individuals who market your products.
Already popular for cosmetics and other types of products, MLM has several inherent advantages. You will have a pool of highly motivated salespeople. They don’t get paid unless they sell your product.
You also incur less risk than with traditional business models. This is because you will not have to operate a traditional retail business. You will only be dealing with the supply side directly. There is much less overhead than in a traditional business where you must pay employees by the hour.
The downside to an MLM business is that you will have less hands-on control of your product. Once your product is delivered to your salespeople it will be up to them. If you want to have full control over every aspect of your business, this would not be the approach for you.
Comparing the CBD Online Business Models
When comparing these models you will notice one thing.
All three of these methods of marketing and selling are in use. They are quite popular in a variety of commodities. Each one comes with different risks and benefits. Finding the one which you are most comfortable with is important.
Dropshipping will be the easiest for you to get into. In this case, most of the work is done for you. You are only connecting people with the products they already want. This can take most of the headache out of running your business, but supply issues can become nightmares.
If you are deeply invested in CBD products, then you will most likely want to explore private label. Here your knowledge and expertise can shine. Working with your contractors you will be able to have a great deal of control, but are also at more risk. You will have to have a large amount of product made and ready to sell.
MLM can seem as easy as dropshipping but some things are not as easy. You will have to pay close attention to marketing and packaging. You will need exciting products that can be easily sold by those moving your product. If it goes your way, though, your business will almost run itself.
Join the Market While It’s Hot
With the market exploding, these three methods will provide you with a way to build your own business. Each will require a different but considerable amount of time and effort to get going.
Utilizing one of these tried and true methods will make your life easier and get your products and profits moving faster.
The CBD online business continues to expand, with more joining the race every day. To secure your position within the market, make sure that you explore your options. Contact us today at Hemp Oil Business for help building your hemp-ire!