CBD dropshipping is an excellent way to start a CBD business without holding any inventory. In this article we'll go over how it all works! According to Statista, CBD consumer sales are projected to reach $1.8 billion by 2022. This is roughly half a billion U.S dollars jump since the federal legalization of hemp crops in 2018. The CBD industry isn't looking to slow down anytime soon and if you're someone who wants a piece of the pie, but isn't sure how to
CBD Dropshipping 101: Everything You Need To Know
Before we get into CBD dropshipping, let’s talk about CBD. CBD stands for Cannabidiol, and it one of the major active ingredients in Cannabis (aka Marijuana, weed, etc). In Cannabis, the two main ingredients are THC and CBD. THC is what gets you high, while CBD is primarily known for its medicinal properties. Cannabis strains usually come with both compounds, but we have learned how to isolate CBD through specific strains.
CBD is typically farmed and extracted from the leafy form of Cannabis that we would normally recognize. It is then shaped into two main types of products — ingestible and topical CBD.
Ingestible products are items that can be eaten to gain the benefits, such as gummy bears, snacks, or even cooking oil. Topical products are absorbed through the skin and include items like lotions, roll-ons, and even bath bombs.
What Are The Benefits Of CBD?
Let’s preface this by saying that we are not doctors, and this can by no means constitute medical advice. Instead, we will draw on publicly published research to give you an idea of how CBD can benefit its patients.
According to the Harvard Medical School, CBD can be used to:
- Treat seizures and epilepsy in certain cases
- Address and reduce anxiety, and possibly insomnia
- Reduce swelling and inflammation due to arthritis (when applied topically)
There are also several potential side effects such as nausea, fatigue, and irritability. But again, you should always do your own research, as we are simply compiling information.
What Is CBD Dropshipping?
To understand CBD dropshipping you must first understand dropshipping.
Dropshipping is a product fulfillment model whereby one business (the product supplier) makes its products available for sale by third parties (dropshippers). Dropshippers select which products they want to sell, and then market them as their own. When the dropshipper makes a sale, they then place an order with the supplier, and the supplier ships the order directly to the end customer.
The result is that the supplier makes a sale at a price between wholesale and retail without doing any of the legwork. The dropshipper takes the profit margin (retail price minus cost of goods) for finding the buyer. And the customer receives the product that they might not have known about without the dropshipper’s introduction.
Example: John is dropshipping products from his friend’s jewelry shop. When John makes a sale through his website for $100, he sends $60 to his friend (the negotiated price) and pockets the $40. His friend then ships the item directly to the customer.
In essence, dropshipping allows a business to sell products without holding any inventory.
CBD dropshipping is simply dropshipping while selling CBD products.
How Is CBD Dropshipping Different?
Compared to dropshipping regular products, CBD dropshipping can be much more complicated, especially in some regions.
Due to CBD’s medical uses, and its ties to Cannabis (which is still heavily stigmatized), CBD products are subject to a lot more regulations than other items you might dropship.
First off, you’ll need to make sure that you can find a reputable supplier. If you’re going to dropship CBD, you definitely want to make sure that the CBD delivers on its promise. If the products haven’t been made in a way that conforms with regulations, you’ve got a bigger problem on your hands.
Second, you’ll need to double-check the laws of your region and the region you are planning to find customers in. CBD is still illegal in many countries, and in countries like the USA, the laws can even vary state-by-state. You may want to seek out legal advice just to be sure. This will impact your business’s legal structure, your shipping, your advertising, and more.
Third, many service providers won’t work with you if you are selling products they deem to be ‘high risk’. Unfortunately, this still includes CBD in many instances. We’ll get into this more later in the article, but just know that many of the services (payment providers, shipping partners, advertising companies) you would normally use will not be available for your CBD business.
What Do I Need For CBD Dropshipping?
As we mentioned above, many companies are uncomfortable working with CBD businesses. You’ll need to double-check before incorporating any tech companies into your business plan. However, there are enough companies out there that you can get everything built.
At its core, there are 4 parts to a CBD dropshipping business — your website, your payment processor, your supplier(s), and your method of advertising.
- Shopify: You can sell CBD products on a Shopify site provided that you follow the laws of the country and state that you are doing business in. They even have a dedicated CBD landing page if you’re thinking of getting started.
- WordPress: As long as you are using WordPress.org (and not WordPress.com) then you can sell CBD and hemp-based products on your site. However, you will need to find a hosting service that allows for it, as WordPress does not include hosting like Shopify. You will also be restricted from other services offered by the parent company Automattic, like Jet Pack.
- Magento: Magento is similar to WordPress as it allows you to sell CBD on your website as long as it isn’t hosted on their servers.
- BigCommerce: Similar to Shopify, BigCommerce has decided to allow CBD to be sold on its websites, even if the sites are hosted on its servers. They have more information available here.
- Wix: As of now, Wix does allow sellers to sell CBD products on their sites, so long as the business is based in the USA.
- Shopify Payments: Shopify Payments is not an option for stores selling CBD products.
- Stripe: Stripe currently has restrictions in place barring any business that sells products containing THC or CBD.
- Square: Square does allow you to process payments for CBD products, both online and for retailers.
- Paypal: Paypal currently classifies CBD as a ‘high-risk industry’, and is not compatible with it.
- Wix Payments: Wix Payments is not compatible with CBD businesses.
Your payment processor options will ultimately depend on the website platform you choose to go with, and the region you’re in. BigCommerce has a helpful guide for determining which payment processor to select, and it comes with some suggestions.
Whatever you do, just make sure you’re absolutely certain that the payment processor you choose is fine with CBD. There are horror stories of payment providers like Paypal freezing people’s accounts with tens of thousands of dollars for years at a time, or even indefinitely. It’s a nightmare to get that money back, so you’re much better off doing proper research beforehand.
CBD Dropshipping Suppliers
There are few different types of CBD dropshipping suppliers to choose from.
First, there are CBD product manufacturers. These are the companies that produce the final products. They are likely to offer the best rates, but may not have the best selection.
There are a few sites like THCAffiliates and ThomasNet that have compiled lists of some of the bigger manufacturers in the market.
Second, there are platforms similar to DropCommerce that have multiple CBD dropshipping suppliers on them. These platforms can usually be integrated directly with your store through their applications, making the setup process simple. There is naturally more selection, but you will often be buying from a middle-man or private-labeled brand, which can come with lower margins.
BoutiqueSetup has an article going over the top CBD dropshipping suppliers from this category.
Note: DropCommerce does not have any dropshipping suppliers at this time, since one of our partners would deem us to be high-risk.
Third, you can dropship from a branded supplier directly. This would be the organization that usually retails the products themselves. The selection can be great, and you can get whatever margin you are able to negotiate.
For this option, you would just need to search for direct-to-consumer CBD sellers. Just make sure they aren’t already dropshipping from some other supplier!
Advertising CBD Products
- Facebook: Advertisers on Facebook can advertise ingestible hemp (no THC or CBD) or topical CBD products, as long as the ads don’t feature those products specifically. You cannot advertise ingestible CBD products (e.g. gummies), and the website you link to needs to be pretty reputable. However, even if you follow those vague instructions, you may get flagged.
- Instagram: Instagram is owned by Facebook, so most of the same rules apply. If you do something incorrectly, you risk having your ad disapproved, or worse, your ads account shut down. Tread with caution.
- Google: While the nuances around advertising CBD products on Google are more complicated, the short answer is that you can’t. There are some cases where you may be able to, but the risk of Google removing your site from search results is high enough to warrant caution.
- TikTok: TikTok is the newest mainstream social media, and its policies towards CBD products are more liberal than its Facebook-owned counterparts. There does seem to be an opening to companies to advertise (or just create content surrounding) CBD-based products.
You can, of course, find another method of attracting customers that is less reliant on these advertising giants. And this is probably your best bet. The more aspects of the business that are completely within your control, the better.
How To Start CBD Dropshipping
While there are certainly many ways to get started, here is a brief rundown of the concrete steps that you’ll absolutely need to follow to be successful.
#1: Register Your Business Entity
You might be able to get away with not being incorporated while you dropship regular products like clothing (at least at first), but any time you’re dealing with something as controversial as CBD you want to protect yourself. By incorporating your business you’ll make sure that your personal assets and possessions are protected in the event of a lawsuit or legal issue. There’s also a better chance of a supplier taking you seriously.
#2: Partner With A Reliable Supplier (Or Multiple)
The next step is to figure out what you’re going to be selling. Are you going to focus on ingestible or topical CBD? Or are you going to serve both markets? Your decision will play a role in your store’s branding, design, marketing, and more.
When finding a supplier, make sure to test them. Get the product in your hands, place a trial order, and don’t take any shortcuts. The fewer middlemen between you and the manufacturer, the better prices you’ll pay and the more reliable your fulfillment will be.
#3: Set up your store
If you’re building an online store, we recommend using Shopify. Shopify is a platform exclusively built for online stores, and it does a great job. There are over 6000 apps on the Shopify App Store that can give your store features that would normally be way out of your budget.
You’ll also need to set up a payment processor, and your options will vary by region. Just make sure you avoid Stripe, Paypal, and Shopify Payments. Go with Square or another high-risk provider.
#4: Start marketing your business
When your store is ready to start selling, then so are you. This is the part where you need to find customers, without bumping into the restrictions we outlined above. And make sure you have a way of enticing customers to return for 2nd and 3rd purchases since existing customers are much easier to sell to than new ones. This could be an email marketing campaign, retargeting ads, a loyalty program, or whatever you come up with.
Although DropCommerce doesn’t currently have any CBD products, it’s something we are looking at for the future. If you want us to start carrying them, let us know! And if you decide to dropship other products, then DropCommerce is the best place to start.
Using CBD Dropshipping to Improve Your Private Label Brand
According to Statista, CBD consumer sales are projected to reach $1.8 billion by 2022. This is roughly half a billion U.S dollars jump since the federal legalization of hemp crops in 2018.
The CBD industry isn’t looking to slow down anytime soon and if you’re someone who wants a piece of the pie, but isn’t sure how to get started, dropshipping may be the easiest way for you to dip your foot into the CBD industry with minimal risks.
Dropshipping CBD is an order fulfillment method that has risen to popularity for the ease that it provides entrepreneurs and small business owners. It allows you to build your dream CBD line of products while partnering with an established CBD manufacturer.
Learn more about what a CBD dropshipping program looks like and how you can get started in this promising e-commerce industry.
What Is Dropshipping?
Dropshipping is an order fulfillment method that frees entrepreneurs and small businesses from managing their own inventory, renting a large warehouse to store CBD products, or handling the shipping to their customers.
How Do You Dropship CBD Products?
- A customer places an order through your online store and pays your retail price.
- The order and customer shipping information are forwarded to our team.
- We package and ship the order directly to your customer.
What Are the Benefits of Dropshipping CBD?
1. Easy to Get started
Perhaps the best part of dropshipping CBD is just how easy it is to get started. Leave the hemp farming, extraction, and product formulations to the experts while you focus on building and marketing the brand.
The first order of business is finding a supplier, like Neurogan. We offer a reliable CBD dropshipping program for US-based companies. Our premium CBD products are made from organically farmed hemp right here in California.
All our products are tested in-house and via an independent lab to ensure the quality is among the best in the industry.
2. Freedom to Work Where You Want
Though it’s rewarding, it’s not always easy running a business. There are many stress points for entrepreneurs including, costs, damaged goods, inventory supply, storage, and more.
Dropshipping CBD products allows you to make money anywhere you have a decent wifi connection, which minimizes the need for an office or warehouse space. This gives you the freedom to work from virtually anywhere while your supplier handles the inventory and shipping.
3. Reduced Overhead Costs
When all you need is a laptop and internet connection to carry out the day-to-day operations of your business, you eliminate a huge chunk of overhead costs that most brick-and-mortar stores have to worry about.
Ditch costly warehouse bills, office space, energy bills, stationery and packaging costs, and labor costs when you work with a reliable drop shipping team.
Not having to use warehouse or office space for your inventory will significantly reduce your overhead costs, meaning you can keep more of your profits with a singular fixed dropshipping fee.
4. Time To Grow & Scale Your Business
Making more money doesn’t have to mean more work, let CBD dropshipping help you to work smarter, not harder.
Entrepreneurs just getting started with any venture know all too well how allocating time is perhaps one of the biggest hurdles in maintaining a business. By leaving the task of storing, packaging, and fulfilling orders to a supplier, you’ll free up valuable hours you can use towards improving your sales and marketing strategy.
Frequently Asked Questions About Dropshipping CBD
What Do I Need To Dropship CBD?
The first thing you’ll need to be eligible in a CBD dropshipping program is a registered business.
You’ll need to file the necessary paperwork in your state to start an online business selling products from a website, just as you would a physical store.
Next, you’ll need to come up with your company’s branding and website where customers can learn about your business and order products.
The other key step in finding success in your dropshipping program is a good marketing strategy. Putting your products in front of the right people and teaching your ideal customers how they can benefit and use CBD products will help you stand out in the market.
The other component you’ll need is a reputable CBD manufacturer that provides a fair dropshipping program and high-quality CBD products. At this time, Neurogan only partners with US-based businesses for our CBD dropshipping program.
When shopping for a drop shipping partner, you want to make sure the wholesale CBD supplier implements the proper safety and testing practices such as independent testing and quality assurance measures because it’s an integral part of your branding and builds long-term customer loyalty.
Is Selling CBD Profitable?
There’s a lot of money to be made selling CBD if done right. CBD is one of the fastest-growing industries worldwide.
With many more people learning about the health benefits of cannabinoids and their destigmatization, hemp products are becoming more mainstream. It’s projected to become a $1.8 billion industry within the next two years, it’s safe to say the CBD industry has made many success stories since its legalization in the United States in 2018.
With premium-quality CBD products behind you, the biggest determining factor for your success in the drop shipping world is your branding and marketing strategy.
Start Dropshipping With Neurogan
At Neurogan, we proudly offer CBD dropshipping private label services for both online and brick-and-mortar businesses. Partner with our team for the ability to store your CBD products at our warehouse and have us do the heavy lifting when it comes to packaging and shipping your goods.
Our state-of-the-art advanced fulfillment system will receive an email each time an order has been placed for your business and we’ll send the product directly to your customer, making the process easy for you.
We’re pleased to offer our CBD dropshipping private label service in support of our customers. After your order is submitted for your private label, get in contact with our team to find out how to join our CBD dropshipping private label program. We look forward to taking care of your goods with care and attention to detail.
How Does Private Labeling Work?
There’s a lot more to creating a profitable business than the product itself (though it’s a crucial component).
Successful businesses need to consider their unique approach to connecting their brand to their particular audiences to generate profits. This means that you need to establish a marketable brand to sell the products.
You handle the branding and let us handle the products. When you choose Neurogan for your Private Label CBD partner, you get access to a catalog of the best selling CBD and CBG products that have undergone rigorous quality control measures and safety testing before they’re bottled and sent to your customers.
You can customize your CBD product line with your choice of flavor, strength, and extract type. We only sell full spectrum and THC-free broad spectrum extracts due to their potency and well rounded CBD benefits. Our team can also help you with creative design solutions, so you can feel supported throughout the partnership.
What’s even better for budding entrepreneurs or those looking to get started with a limited budget is that our drop shipping program has a low minimum order value of $1000.
If you have any questions about getting started with our Private Label Program, we encourage you to reach out to our team.
The Takeaway: Dropshipping CBD
For entrepreneurs passionate about the CBD industry, dropshipping programs offer an exciting venture as a business.
Leave the logistics of hemp farming, extraction, and formulas to the experts while you handle the sales and marketing on your e-commerce website.
Dropshipping gives you the freedom to start an e-commerce business virtually anywhere you have access to the internet with your laptop. And when you partner with a reputable CBD manufacturer, you can rest assured that your CBD product quality and order fulfillment are met with professionalism and care.
Connect with our team today to enquire about our Dropshipping and Private Label Services.