Did you know that a Shopify CBD store can be a lucrative business venture?
CBD is the latest craze. This non-psychotic cannabis constituent is known for producing many wellness benefits including stress and pain reduction. Many entrepreneurs are getting in on the ground floor by opening their own CBD businesses. Some even using Shopify as a retail platform
Shopify is an all-in-one commerce platform that makes it easy to launch your dream business. But, can you sell CBD on Shopify?
Is it legal to sell CBD on Shopify?
Yes, it’s legal to sell CBD on Shopify but you’ll need to adhere to certain guidelines.
First, there are certain rules and regulations concerning CBD sales. They differ from state to state. You must consult a lawyer to find out about the laws that apply to ensure your CBD store doesn’t get shut down.
There is also a Shopify CBD policy that you must comply with. If you sell edibles or gummies, you will also have to consult with the FDA to ensure all the products you carry are up to code.
Types of CBD products you can sell
There are a variety of CBD products you can sell on Shopify, including the following.
- Capsules: CBD capsules contain a CBD extract covered by a softgel. People enjoy their convenient dosage form.
- CBD for vaping: Some people take advantage of CBD benefits by smoking it in a vape pen. Customers can purchase vape cartridges filled with CBD for this purpose. Many cannabis businesses also sell a variety of vaping accessories.
- CBD Edibles & Gummies: CBD is often added to food products like gummies and baked goods like cookies and brownies. When consumed in edibles, the onset is delayed but the effects are more powerful.
- CBD Topical creams and ointments: CBD can be infused into creams and other topicals. These are typically applied directly to the skin to reduce pain. CBD can also be used in beauty product creams for its moisturizing effects.
- CBD Oils: CBD extract is also available in liquid form as an oil that can be administered under the tongue with a dropper.
Will I need a license to sell CBD in my Shopify store?
Only Canadian sellers are required to obtain a license to sell Shopify CBD products. They must also use Shopify Plus.
Sellers in all other jurisdictions must follow Shopify’s Terms of Service and Acceptable Use Policy which ensures they are complying with all applicable laws and regulations. However, a license is not necessary.
How profitable is the CBD industry?
CBD has been steadily growing in popularity over the past few years. People love it because it’s an all-natural remedy that offers a variety of health benefits. As a result, CBD sellers are seeing considerable profits.
According to Leafly, long-term CBD sellers can see average profits of around 15%. However, this is contingent on using smart business strategies. Taxes, operating costs, and the size of the business will also affect how much the company nets.
How to apply for a CBD Merchant Account
CBD is currently considered a high-risk business. Therefore, it can be difficult to find a financial institution to process payments.
Shopify does not provide a payment processor for CBD purchases due to its high-risk status. Therefore, you will need to go through a third-party merchant.
Here are the steps you will need to take to apply for a Shopify CBD merchant account:
- Apply for the Merchant Account: First you will need to apply for your merchant account. The merchant will want to know how long you’ve been operating and what your sales volume and chargeback rates are like.
- Complete the underwriting process: Next Shopify will go through the underwriting process which involves accepting financial responsibility for your transactions. They may require documentation such as a Certificate of Analysis that shows the THC content in your product is below .03%.
- Approval: Once you’re approved, you can enjoy a seamless experience through the Shopify platform. You should have access to your money as soon as transactions are processed by the bank. You will also be able to take advantage of Shopify features including a portal where you can view all your transactions and risk management tools.
Tips to maximizing your revenue
There are several strategies you can use to maximize revenue for your Shopify CBD store. Here are some tips for maximizing revenue.
- Connect to an email marketing platform: Email has been shown to produce a high ROI. You can link directly to Constant Contact’s Shopify integration to stay connected with customers and promote repeat business. You can send out welcome emails, newsletters, and abandoned cart emails to keep business flowing.
- Focus on customer retention: You can keep customers coming back by offering loyalty programs, discounts and great service. Quality products and prompt delivery are important too.
- Use SEO: SEO strategies will ensure your Shopify CBD store is as visible as possible. It involves using keywords in your product descriptions. You will also bring in customers by making your descriptions accurate and enticing.
- Focus on the right products: There are many CBD products you can offer for sale. To be competitive in the marketplace offer a variety of products and don’t forget to offer a description. Find ways to differentiate your products from other brands. Specializing in certain types of products can also help you capture more sales and a loyal clientele.
- Encourage cross selling and upselling: You can cross sell or upsell your products to increase revenue. Cross selling involves trying to get customers to purchase additional products. For example, if someone buys a vape cartridge, you can recommend they purchase other vape accessories. If they purchase a certain type of cannabis, you can upsell and recommend they buy a higher grade that’s more expensive, but also more of a value. You can program the platform to automatically make upselling and cross selling recommendations.
How Kickfurter can help
Kickfurther is the world’s first online inventory funding platform that enables small CBD businesses to access funds that they are unable to acquire through traditional sources. CBD companies are often deemed high-risk and therefore struggle to obtain affordable financing, or for that matter, even be given a chance. For companies that sell physical products or non-perishable consumables and have revenue between $150k to $15mm over the last 12 months, Kickfurther can help. We connect brands to a community of backers who help fund inventory on consignment and give brands flexibility to pay that back as they receive cash from sales.
Kickfurther can help startups and small businesses fund millions of dollars of inventory at costs up to 30% lower cost than the competition. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours.
Closing thoughts
While online businesses can enjoy reduced overhead and less staffing, overhead is still high. Oftentimes, Shopify CBD retailers encounter cash flow challenges as a direct result of inventory costs. Before diving into inventory funding, make sure that inventory is being properly managed and any waste is eliminated. Once you have momentum and an efficient inventory system, you’ll be ready to explore inventory funding.
Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:
#1. Create a free business account
#2. Complete the online application
#3. Review a potential deal with one of our account reps & get funded in minutes
Learn more about CBD Inventory Financing Options with Kickfurther.
