Forecasts indicate that CBD sales could hit $80 billion come 2030! Consequently, it comes as no surprise that many people are setting up Shopify stores. If you want a slice of the pie and wonder how to sell CBD on Shopify, this post can help you out.
But first… how much is CBD selling for? Well, there’s no surefire way to determine the general price of CBD. Prices are dynamic and could change within days or weeks. Still, other factors need consideration. Let’s dive into the nitty-gritty of selling on Shopify before quickly going through some of the factors that affect CBD pricing:
Before setting up a Shopify store, you need to sign the firm’s attestation form. The form declares that you intend to abide by federal and local laws regulating the sale of CBD. Plus, you’re responsible for keeping up with changes in CBD-related laws in your target market. In short, it absolves Shopify from blame if you get into a legal fix.
By and large, you are at liberty to sell hemp-derived CBD products on Shopify all across the U.S. Nonetheless; you’re likely to face extra restrictions in some states, which you need to get acquainted with before setting up shop.
Creating awareness is a natural part of trying to sell products online. But, as far as CBD goes, the Food and Drug Administration (FDA) prohibits you from marketing CBD products by making health-related assertions or claiming customers can add it to food or drinks. You can sell CBD products and ship them countrywide on a positive note.
But, online CBD sales regulations can lead to potential grey areas and confusion. You might want to retain a lawyer familiar with the business to keep you in the loop for these reasons.
You need to be aware of an intriguing fact: your local bank is unlikely to handle or process payments for CBD products, thanks to federal law forbidding the same. By extension, payment processors are leery about handling CBD-related funds. Also, Shopify doesn’t allow you to use its in-house plan for processing payments. What about PayPal? Sorry, but that’s a no-go zone as well! Where does that leave you?
Consider using a third-party vendor or payment processor that integrates or links up with Shopify. For instance, Sezzle comes highly recommended by Shopify as a CBD-supported payment option. You can also try out DigiPay, although there is a catch. You need to submit verifiable, third-party test results as proof that your products don’t exceed the 0.3% THC concentration.
Overall, the guide above might help streamline the process and hopefully make customers come knocking on your door. Let’s now tackle the other elephant in the room: pricing.
Factors Affecting Pricing
- THC Content- Potency
Federal rules dictate that THC content in marijuana products should not exceed 0.3%. When hemp products exceed this threshold, cultivators or producers have to seek ways to reduce the concentration of THC. Generally, THC content impacts wholesale and retail pricing. Thus, THC stripping services could drive costs up and, in turn, the selling price.
CBD levels come into account when hemp is intended for creating oils, isolates, or smokable flower variants. For instance, THC-free hemp oil fetches more (nearly double) than THC-laden or full-spectrum oil.
- Product Type
Prices tend to vary by product type. For instance, the price of CBD flowers, hemp oil, edibles, and isolates is likely to be different. Similarly, refined CBD oil would have a higher asking price than crude hemp oil.
- Supply and Demand
It might be a bit cliché, but the laws of demand and supply affect the selling price of CBD. CBD pricing has been on a downward trend due to market flooding. An oversupply of hemp without a rise in demand means finding buyers is a big ask. Otherwise, if demand keeps up with supply, prices could stabilize.
- The Seller
Every seller has their pricing strategy and source of CBD. For instance, if a seller acquires a product at a high price, they have to factor their profit margin into the equation, which would raise the selling price. Besides, operating costs and overheads have to be covered. Thus, a brick-and-mortar business with higher overheads would charge more for its hemp than an establishment with most of its operations online.
CBD products with a higher concentration will undoubtedly command higher prices. But, if THC exceeds the legal limit, the product may be unfit for the market. Similarly, slow-curing CBD increases THC potency, although a fast-drying process tends to raise output. Conversely, contamination or a lower CBD content leads to lower prices.
If you’re up for the challenge, you need to create and implement a strategy that differentiates your CBD business in the final analysis. In that case, you might explore the potential of opening a Shopify store. You’ll also need a competitive pricing plan to stay ahead of the competition. That way, you could snag a larger slice of the pie.