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Dropshipping is a method of order fulfillment where companies that sell products outsource the storage, packaging, and shipping of their products. If you’re selling products, the costs of warehousing, stock monitoring, packaging, and shipping products can be expensive. As such, many businesses outsource these functions to an external service known as a fulfillment center.
Fulfillment centers already have the resources and staff to handle stock for other businesses. Not only can they store stock for you, but they can handle the entire packaging and postage process for your business. They can even handle returns, replacements, and other important functions related to order fulfillment.
Outsourcing order fulfillment to a fulfillment center is a common practice for businesses that want to save time and money. It’s especially common for online retail businesses. Instead of acquiring the funds to rent warehouses and hire staff to handle orders, online business owners can simply enlist the help of a fulfillment center to handle these functions for them.
Online dropshipping businesses ship their stock to a fulfillment center. They then forward postage information to the fulfillment center whenever they receive an order. The fulfillment center then packages and ships the appropriate products to each customer. This process is generally automated to make things even smoother and faster. Overall, this allows entrepreneurs to start dropshipping businesses with limited funds and resources – they simply need to source the products and market them online.
Many cannabis entrepreneurs consider opening a cannabis dispensary, farm, or even a cannabis delivery service. However, selling CBD products is arguably a much more viable option. Research from Market Research Future claims that the global CBD industry was worth USD 9.1 billion in 2021 and is projected to reach a whopping USD 59.3 billion by 2030.
In addition to a growing demand for CBD products, starting a CBD business is much easier than a regular marijuana business. Selling, growing, or even handling marijuana requires a marijuana business license. These are notoriously hard and expensive to obtain in many states, and many marijuana businesses fail to acquire the funding needed to even get started.
In contrast, starting a CBD business is much easier. As long as you stick to selling legal, hemp-derived CBD products, you only need a regular business license. Plus, while there are still rules and regulations you need to follow when selling hemp-derived products, you can legally sell them online via a dropshipping business – something you can’t do with marijuana products.
Although you could start a physical CBD store, dropshipping is an excellent way to sell CBD products on a budget. You won’t need to pay for storage space, shipping staff, or even a physical storefront. You can handle the entire business by yourself remotely by enlisting the help of a fulfillment center, although you’ll still need to pay for the products, your digital storefront, and marketing costs.
If you want to cash in on cannabis-derived products, it’s important to focus on legal, hemp-sourced products. According to the Hemp Farming Act of 2018, you can sell cannabis products as long as they’re derived from hemp plants and contain less than 0.3% THC. While it might sound restrictive, you can now find a variety of popular cannabis-derived products that fit this description.
CBD Products – CBD products such as CBD oils, edibles, and topicals have swiftly become the most popular alternative to marijuana products. These products are generally sourced from hemp and contain less than 0.3% THC, making them legal to sell without a marijuana business license. CBD is a non-psychoactive cannabinoid that’s become a popular alternative to medical cannabis.
Delta-8-THC Products – THC usually refers to Delta-9-THC, but Delta-8-THC is a different cannabinoid that offers milder psychotropic effects. Delta-8-THC products are sourced from hemp and contain less than 0.3% Delta-9-THC, making them federally legal. Delta-8-THC products have become a popular legal alternative for those who want to get high without using marijuana. However, some states have restrictions on these products.
Delta-10-THC Products – Delta-10-THC is another form of THC that’s federally legal to buy or sell as long as it’s derived from hemp plants. Like CBD and Delta-8 products, Delta-10-THC is often infused into oils, edibles, vape products, and other convenient products for consumers. It offers milder effects than Delta-8-THC but generally has a more favorable legal status.
Other Cannabinoid-Infused Products – While CBD, Delta-8, and Delta-10 products are particularly popular, there are various other cannabinoid-infused products derived from hemp. These include CBN, HHC, and CBG products. Each of these cannabinoids has unique benefits, and while they’re not as widely sought-after as CBD products, they can still be marketed and sold to consumers interested in unique cannabis-derived products.
Like any other business, starting a CBD dropshipping business starts with a business plan. You’ll need to consider your target market, how much funding you need, how you plan to make a profit, and how you’ll market your business. Fortunately, starting and funding a CBD dropshipping business is much easier than starting a cannabis business.
Although CBD is federally legal, some states have restrictions on who can buy CBD products, so you’ll need to do your research and make sure your business is legally compliant. For instance, you may need to ensure customers are 21 or over if you plan to sell in certain states. You can learn more via our guide on how to legally launch your CBD business.
Two of the most important decisions to make are where you’ll source your products from and who will handle order fulfillment for you. You need to ensure you obtain your stock from reputable brands offering legally-compliant products containing 0.3% THC or less. Make sure you only stock products that have been tested – accidentally selling illegal products can get you into serious trouble.
As for order fulfillment, you’ll need to find a fulfillment service that’s happy to handle your CBD products for you. You’ll also need to find a reliable payment gateway that accepts debit and credit card payments for CBD products. Many CBD dropshipping businesses sell products via Shopify, but you need to submit an attestation before selling hemp-derived products.
Finding CBD suppliers is one of the most important steps for starting a CBD dropshipping business. Although an external service will manage your stock and handle order fulfillment for your business, you need to source the products yourself. As such, you’ll need to find reputable sources for high-quality CBD products.
It’s crucial to remember that only certain cannabis-derived products are federally legal to sell in the United States. These products must be derived from hemp plants and contain less than 0.3% THC. Many CBD products out there are untested and unsafe to sell. Make sure you source your products from reliable sellers that provide safe, tested products.
The same rules apply if you plan to sell other cannabis-derived products. If you’re planning to sell Delta-8, Delta-10, or other cannabinoid-based products, make sure you find suppliers that offer federally legal products that have been thoroughly tested. You should also research the legal restrictions for these products before you sell them.
Fortunately, you can find many reliable CBD wholesalers and brands out there. When you’re running a CBD dropshipping business, you can obtain stock from various sources and sell products from a variety of brands. You might want to research some of the most popular cannabis-derived products and brands out there and obtain them for your online store.
Finding the right fulfillment center is another crucial step for starting a CBD dropshipping business. The fulfillment service you choose will be responsible for securely storing your products and handling your shipping, so make sure you choose a professional and reliable service.
Due to the high-risk nature of the cannabis industry, some fulfillment services may not wish to handle cannabis-derived products. Before you choose a fulfillment center, make sure you inform them of the legal aspects of your products. As long as you solely stock federally legal, hemp-derived products, you can find a fulfillment center happy to handle your goods for you.
You might want to consider a few other aspects when choosing a fulfillment center. Shipping speed can be incredibly important for keeping customers, so choose one that offers fast, efficient shipping. It also helps to choose a fulfillment center in a suitable location for the area where you plan to sell. It also helps to find a fulfillment center that offers returns management.
Fulfillment centers usually handle orders via automated software, so find out what kind of software each fulfillment service uses and how easy it’ll be to implement in your business. You should also read online reviews for each fulfillment service to ensure you make the best choice for your dropshipping business.
Once you have trustworthy suppliers and a reliable fulfillment center, you can start selling your CBD products online. While many people operate dropshipping businesses via online selling platforms like eBay or Amazon, these platforms restrict the sales of CBD products. As such, it’s best to build a brand website to sell your products.
Your brand website should be fast, reliable, and easy to navigate. It should also be mobile-friendly – many consumers now demand the option to buy products online via mobile devices. It’s best to enlist the help of a professional web design service to ensure you build the best website possible for your brand.
After building your website, you can implement your online store. Many online shopping cart platforms make it easy to embed a shop directly into your website. Shopify is a popular platform that can be used to sell CBD products online. It can also easily be embedded into your website to make it easy for customers to buy from you.
Make sure you create high-quality product pages for your CBD products, including impressive images and detailed product descriptions. Avoid making any health claims about your products – this can get you in trouble with the FDA.
Marketing your dropshipping business is essential if you want to attract a loyal customer base and start profiting from your CBD products. There are still legal restrictions regarding how you can market CBD products, but many digital marketing methods can work well.
You might want to start by creating SEO-friendly content for your brand website. This can attract viewers from Google and other search engines. You can then convert these viewers into customers using enticing calls to action.
Social media can also help you attract customers. Post relevant content and entice users with enticing promotions and sales. You might even want to start a social media competition, encouraging users to share your post with their followers.
Building your brand will help you increase customer retention and enhance brand loyalty. One of the best ways to do this is with custom-branded cannabis products. Many customers will want to buy accessories such as grinders and stash bags – placing your brand logo on these accessories can help keep your brand in customers’ minds.
Starting a CBD dropshipping business is a smart way to cash in on cannabis-derived products. You can sell a variety of hemp-derived cannabidiol products, in addition to other products containing 0.3% THC or less. For more help with starting and promoting your CBD brand, visit Cannabis Promotions.
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