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The licensing costs for opening an online CBD business are much cheaper compared to other types of cannabis businesses. Businesses handling marijuana products directly must obtain expensive marijuana business licenses. However, if you’re selling hemp-based CBD products containing less than 0.3% THC, you don’t need a marijuana business license.
That doesn’t mean you can avoid licensing costs altogether. You’ll still need a regular business license. The cost of your business license will vary depending on what state you’re operating from. Generally, business licenses in the United States cost between $50 – $550. Check the licensing costs in your state before you get started.
If you’re sourcing CBD products from a wholesaler, you’ll also need a reseller’s license. Once again, the cost of this can vary between states. For instance, in New York, the Cannabinoid Hemp Distributor Permit costs $300 per distributing location. In other states, a reseller’s license is free.
You’ll also need to set up and register your business. Overall, you may need to set aside anywhere from $100 to $1000 for licensing and registration costs.
If you’re selling CBD online, your website will be your most important expense. You use your website to promote your products and attract customers from Google. You can also sell your products via your website using online shopping cart software. As such, you’ll need to consider the costs of starting a high-quality website to improve your success.
You’ll need to register a domain for your website. A .com domain costs just $9.58 a year from Namecheap. You should register your domain for at least 5 years or enable auto-renew to ensure you don’t lose it. As such, you should plan to spend around $50 on your website domain.
Nowadays it’s easier than ever to build a website for free using website builders and content management systems like WordPress. With that said, it’s better to have a well-designed website that’s sure to attract and engage customers. Hiring a professional web development service can cost $5,000 to $10,000. With that said, they can also help you implement the software you need.
You’ll need to pay for professional software to run your business. Most importantly, you’ll need to use an online shopping platform to sell your products. Many cannabis and CBD businesses use Weedmaps, which costs $300 – 500 per month to list your business and offer an online menu.
You can also consider other online shopping cart platforms. For instance, a Shopify small business account costs just $79 a month whereas a premium account costs $299 a month. With that said, you’ll also be charged a small commission fee for every purchase.
An online commerce platform like Bigcommerce can also help you attract and convert leads. It can even help you create an attractive online storefront. It costs $29 a month for the basic package, $79 a month for the plus package, or $299 a month for the premium package.
Many other apps and programs can help you build your business. With that said, many of these offer affordable or free basic packages. You may wish to start with the cheapest options and pay for improved packages as your business expands. Nonetheless, you should plan to put $1,000 to $5,000 a year aside for your online software.
It’s impossible to start an online CBD store without the right inventory. Fortunately, you won’t need to worry about stocking shelves with a bountiful selection of CBD products. However, you should still have a wide range of CBD products available for customers to order online for delivery.
The costs of your inventory will vary largely based on your wholesaler and what kind of products you should buy. It’s best to start with the most popular types of products – CBD oils, edibles, topicals, and vapes. You can find many brands and flavors of these to suit a wide base of customers.
You can cut your costs drastically by not paying for a warehouse or physical storefront. Instead, you can pay around $1,000 for packaging equipment to package your products from home. You can then ship them from the local post office. Alternatively, you may wish to enlist the help of a dropshipping service. This usually requires a 10 – 20% commission, although it can make your business run much more smoothly.
It’s possible to start a small CBD business with $5,000 in inventory costs. However, spending $10,000 to $15,000 can help ensure you have an impressive inventory. You can also start with a small product range and expand as you make more sales. That way, you can focus on your best-selling products.
Marketing is another crucial consideration when starting an online CBD store. Marketing services often charge hundreds of dollars a month for their services. Fortunately, you can make this much cheaper by using affordable digital marketing methods.
You can start social media channels for your social media business, create SEO-friendly content, and start an email list for free. You can also use cheap or free marketing apps to help you with these processes.
It also helps to promote your business physically. Custom-branded cannabis accessories often appeal to CBD users. You can get hundreds or thousands of these made for incredibly cheap. You can sell these online or offer them as promotional gifts to customers. You could even hand them out at local events to improve your brand visibility.
Overall, you should put aside at least $1,000 – $3,000 for your initial marketing costs. As your business starts making sales, you should spend at least 10% of your revenue on marketing.
So how much does it cost to start an online CBD store? The answer can depend on various factors. You could start a successful online CBD store for $16,000 to $30,000. You could even cut many of these costs and start your store for cheap, but spending more will often lead to better results.
For more guides on starting a CBD business, along with branded products to promote your brand, visit Cannabis Promotions.
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