Business opportunities in the CBD industry
In this article I’d like to tell you about the different opportunities for your company in the CBD market.
I have represented the biggest European hemp producer in every trade show in Europe, and I know everybody in the industry. I know how frustrating it can be for a newcomer to navigate this space. If I want CBD vape, where do I get it? Who has the best RAW extract? Who makes CBD gummy bears?
The terminology can be confusion because the same words are often used to mean different things.
To start off, I’ll explain the terminology we use to qualify your business. Starting with the difference between bulk, retail, wholesale, drop shipping and white label.
Difference between bulk, retail and wholesale CBD (Cannabidiol)
Bulk CBD – unbranded product
Bulk: large quantities of unbranded product, for example 10 kg of winterized, decarboxylated extract. This is most interesting for secondary producers, who need CBD extract as an ingredient for the products they manufacture.
Wholesale CBD – Business to Business (B2B)
Wholesale: a wholesaler is a business that sells products to other businesses. A wholesaler normally has a product catalog, and pricing can only be accessed by other qualified businesses, usually retailers.
Retail CBD – finished, branded products sold to the consumer
Retail: a retailer is a company selling finished products to the final consumer. To qualify as a retailer, you need to have a storefront or website, and be legally registered as a business. You should be able to show a corporate registration number and a tax number. A retailer typically has two options: sell existing brands’ finished products, or start a white label of their own.
Whitelabel CBD – Ready made products with your own brand
Whitelabel: it would be more accurate to call this no label. Whitelabelling a product means you buy a product from the producer without their label on it. You are responsible for creating your own labels and boxes with your brand, although some producers offer to do this job for you, at a certain cost. However, we advise keeping the branding and labelling under your own control. Conflicts often arise over changes to the label, misprints etcetera. If you are too small to handle labelling, maybe you can consider selling other brands to grown your company, and if you are a bigger company, it makes more sense to have full control over this aspect of the business.
Dropshipping CBD – Selling other CBD brands through your website
Another way of doing business that is gaining popularity is dropshipping. Dropshipping is a way to sell products, without having to stock or send them yourself. You do the marketing and or advertising, and handle customer care. When you make a sale, you transfer the customer data to your drop shipper, and they fulfilled the order for you.
In the next article, I’ll speak about what CBD products are available on the market, and what the differences between them are.