The CBD oil industry is a new and revolutionary industry, and now is the perfect time to get involved. As we learn more about the cannabinoid, we find new uses and benefits. Therefore, opportunities are endless. In addition, CBD oil has truly become a household name. There couldn’t be a better time to tap into the market. Here, we’re going to answer the questions of “how can I start my own CBD oil company?” with 10 simple steps.
1. Research The Products and the Market
So, you’re wondering “how can I start my own CBD oil company?”. Well, the first thing you will need to do is research. You will need to conduct in-depth research so that you’re an expert in everything CBD oil-related. We recommend starting with extraction methods.
There are many different ways to extract CBD oil from hemp plants, and there are pros and cons to each of them. For instance, some are more environmentally friendly than others, and some are more cost-effective and faster. Therefore, the extraction method used will influence the quality and cost of the finished CBD oil product.
What Are the Different Types of CBD Oil?
- Full-spectrum CBD extract: This is an extract that contains a full range of naturally occurring cannabinoids, terpenes, flavonoids, and essential oils. Experts believe combining the entire range of natural components can yield more powerful effects on consumers. This is known as the “entourage effect”. It is worth noting that full-spectrum extracts will contain trace amounts of THC.
- Broad-spectrum CBD extract: This extract will contain a wide range of cannabinoids, terpenes, and flavonoids, but it will not contain THC. This is because broad-spectrum CBD oil goes through additional filtration and refinement processes to remove it.
Before you start selling CBD oil online, we also recommend researching the existing CBD market. This market research will help you identify gaps or niches in the market where your business can perform well. For instance, you may find a demographic that is underserved or a specific need that is unmet. Then, with your newfound knowledge of CBD oils, you can come up with a specific product to meet this need.
Some of the main uses of CBD oil are:
- As a natural form of pain relief
- To support healthy sleep
- To reduce stress and promote relaxation
- As a natural anti-inflammatory
- To support overall health and wellness
Knowing your target market and the products available will help you target specific demographics, with your products as the solution. For instance, many people are willing to try CBD oil, but they’re apprehensive about THC content. Therefore, you can provide them with broad-spectrum CBD oil.
Alternatively, you could target people who want to use CBD oil but they dislike the natural flavour of the oil. In this case, you can manufacture a flavoured CBD oil or tincture to mask the natural, earthy flavour of CBD oil.
We suggest building a detailed profile of your target customer. You should look into their general interests, lifestyle choices, internet behaviours and average income. This will help you build products, branding and marketing strategy that appeals to them. You can make sure it is accessible and affordable for your potential customers.
2. Do Your Homework on Industry Regulations and Best Practices
Before you can move on to forming a budget, you will need to familiarise yourself with industry restrictions and regulations. We recommend doing this as early as possible, as your findings will influence where you take your business. For instance, if you are planning on manufacturing CBD oil in your own facilities, you will need to obtain certain permits and certifications to prove that your premises and processes are compliant with regulations.
Obtaining some of these certifications can be costly. Therefore, it is important to know the ins and outs of current legislation before you decide on your product or budget.
In the UK, there is a regulatory framework in place, with the aim of protecting consumers. As of 2021, you cannot legally sell a CBD oil product if you do not have Novel Foods approval for that specific product. This is a certification that proves that the product is up to health and safety standards and is compliant with UK law.
If you choose to manufacture CBD oils in your own facilities, you will need to obtain approval for each of your products. However, product approval is not specific to the applicant. Therefore, to bypass this process, you can opt for a white-label service that already has Novel Foods approval for their oils. For example, Cannmed has up to date certification for each of their white-label products, including our range of CBD oils and tinctures.
There are some industry best practices that you will need to look into too. For example, whilst it’s not a legal requirement, we suggest obtaining Certificates of Analysis (COA) for your products. This is a report that you receive once you have had your products tested, for quality and safety, by an independent testing facility.
This COA will show you, and your customers, the cannabinoid profile in your products. They will be able to clearly see that the products they’re buying contain the current amount of CBD and THC.
How can I start my own CBD oil company if I don’t have COAs for my products? You don’t need to provide your customers with COAs, but we recommend that you do. In the UK, finished CBD products can only contain less than 1 mg THC, and giving your customers access to lab reports allows them to check for themselves. Giving customers access to this information promotes your brand as a transparent company that can be trusted.
In addition, you should look into certifications that might matter to your potential customers. For instance, if your target market is concerned about animal welfare or follows a vegan lifestyle, they will want to buy cruelty-free and vegan products. Therefore, you should look into what certificates you will need to prove that your products are suitable for their needs.
Cannmed CBD tinctures and oils are certified organic, vegan-friendly, and cruelty-free. You can find more information on our accreditations here.
When you have decided what you’re going to sell and who you’re going to sell it to, you’ll need to form a realistic budget. To do this, you will need to list overheads, such as:
- Purchasing stock
- Storage for stock
- Customer Service
- E-commerce site development
You will need to identify tasks that you can manage in-house, and where you will need to outsource, making sure there is budget to do so. Essentially, you will need to figure out how much capital you will need to get your CBD oil business off the ground.
We also recommend allocating some capital toward “unplanned” costs. It’s always better to be prepared in case an unexpected expense arises. This budget will then help you determine how many sales you will need to “break even”.
4. Forming a Solid Business Plan
The next step in how to start a business selling CBD oil is to build a solid business plan. This is a detailed document where you can store the results of your product and market research, as well as your budget. You will also need to discuss the type of product that you’re selling, why you have chosen it, and how you are going to sell it to your target audience. You should also identify unique selling points (USPs), that will set your product apart from competitors.
How can I start my own CBD oil company if I don’t have enough capital? If you don’t have enough capital to get your business off the ground, there are plenty of options. For instance, you can seek financial backing from investors, or you can apply for a business loan.
To secure funding from external sources, you will need to make sure your business plan is as detailed as possible. You will need to identify potential pitfalls and solutions, and you will need solid research and evidence to back up your decision-making. You will need to prove to investors that your business will return their investment.
5. Building a Brand Identity
So, how can I start my own CBD oil company that will stand out from competitors? One of the main reasons for in-depth market research is to learn more about your market audience’s personal interests and tastes. This will help you develop branding that will pique their interest.
You should develop a clear brand voice and tone that speaks directly to your potential customers. For example, if you are gearing your products towards college students, your tone should be conversational and witty. If you are hoping to work with B2B clients, you will need to adopt a more formal, professional tone.
You should develop a colour palette and a couple of fonts to use throughout your branding. Consistency is key, so it’s important to make sure your website, social media, product labels, and packaging are in line. This will help to create a recognisable brand across all platforms.
When coming up with a name for your CBD oil company, you will need to come up with a unique name. Make sure it’s not similar to an existing brand, and make sure it’s something that your potential customers can remember easily.
We recommend keeping it short and sweet, and easy to spell. Your customers might need to type your company name into a search engine or social media search, and you don’t want them getting lost along the way. The aim is to make sure your online store is as easy to find and recognise as possible.
Once you have settled on a name for your brand, you should purchase a domain name and claim social media accounts. You should make sure that they’re all the same, so that people don’t get confused.
We talk about marketing and branding in more detail in our blog CBD Branding and Marketing: Why Is It So Important?
6. Source a Trustworthy Supplier
Armed with your newfound understanding of products and industry regulations, you will be able to identify reputable suppliers with the drop of a hat. You will also be able to make an informed decision on whether you should opt for wholesale or white-label services.
How can I start my own CBD oil company if I have my own processing facilities? If you have access to these facilities, we recommend opting for wholesale cbd products. This will help you to keep costs down, as you can buy premium-quality CBD oils in bulk and process, package and label them on your own premises. If you wish to become a CBD oil distributor, opting for wholesale products will also suit your needs.
If you’re wondering how to start your own CBD oil business if you don’t have access to your own production facilities, we can help too. You can simply opt for CBD white-label services where your supplier produces the products to your specifications, packages them and sends them to you. In addition, you can opt for private label services where your supplier can even label your products with your own branding. Here at Cannmed, we offer both of these services.
If you would like to learn more about our wholesale and white-label offerings, you can reach out to our dedicated sales team. They can talk you through our extensive range, identifying which products suit your business needs.
7. Obtain Necessary Permits and Register Your Business
When you have settled on your brand name, you will need to register with the relevant authorities. We recommend doing this before placing an order with your supplier, as they will need your business and tax information. You should also consider registering your business name and logo as a trademark for your business.
Whilst you don’t need a license to sell CBD in the UK, you should take this opportunity to make sure you have all of the relevant permits and certificates in order.
8. Set Up an E-commerce Website
How can I start my own CBD oil company online? Whether you’re planning on selling CBD oil online or in a brick and mortar store, you will need to build a functioning, professional site.
You should make sure that all branding and images on the site are consistent with branding used on your products, packaging and social media. Your customers should be able to find their way around the site easily too, and they should have access to detailed and accurate information about your products.
What You Should Include on Your Website
Not everyone is experienced in the world of CBD, and many of your customers might be complete beginners. Therefore, we recommend catering to all knowledge and experience levels with detailed and informative blogs on how to use your products and how they can help.
You should avoid using industry jargon that might confuse your readers. Including high quality, factual information on your site will add value to your customers’ experience and it will also help with SEO.
However, you must be careful with the written content on your site, when talking about CBD oil. There are restrictions in place when it comes to how we speak about CBD online. You cannot imply that your products will cure, prevent, or treat any medical conditions or illnesses. You can include genuine testimonials from customers and research-backed information though.
When you are building your site, you will need to include information about delivery timeframes and costs, as well as information on your returns policy. You should clearly lay out when customers are entitled to refunds, replacements, and repairs. This is in line with “distance selling” guidelines that you can read more about here.
9. Construct an Adjustable Marketing Strategy
We always recommend conducting in-depth market research at the very beginning of your journey to selling CBD oil online, as it can help with many other steps along the way. It plays a particularly important role in forming your marketing strategy, for example.
During your research, you will have studied your target audiences’ internet habits and behaviours. You will need to advertise your products where your potential customers will see them. For instance, if your customers tend to veer towards Instagram as their platform of choice, you will need to invest time and money into building a presence there.
Social Media Marketing
You can build a social media presence by sharing engaging and informative content with your followers. Advertising your own products isn’t enough, you will need to show how they work, what they do, and how your customers can use them. Building a presence can take time, but there are ways to get a leg up. You can work with influencers or opt for targeted ad campaigns.
Search Engine Marketing (SEM)
In addition, you should invest in search engine marketing. Spending time making sure your site is optimised for search engines, like Google, will mean that your store will appear higher up on search engine results pages (SERPs). Therefore, customers are more likely to click on your store.
This is a long-term method of marketing, as it takes time to build up a reputation as a trustworthy site. However, you can opt for paid Google ads (e.g. pay-per-click) to make sure your site appears on relevant SERPs, letting you hit the ground running.
You should also consider email marketing, as it’s a wonderful way of delivering special offers, product launches, and information directly to your customers’ email inboxes. Consider adding a “pop up” on your site, offering customers a discount on their first order, if they sign up to your email newsletter. This will encourage them to sign up, and it will also encourage them to place an order.
Your marketing plan should be detailed, but flexible. You can use analytics tools to keep an eye on where customers are coming from, how they’re finding your site, and their behaviour whilst on your site. These insights will help you determine where you should focus your marketing efforts. For instance, if you find that many of your customers are coming from targeted Facebook ads, you can invest more time and money in this avenue.
10. Work on Customer Retention
Now you know the answer to your question, “how can I start my own CBD oil company?”, you can start selling. The CBD industry is a relatively new one, and it is constantly evolving. More research facilities and pharmaceutical companies are allocating funding for research, and so we are continuously learning how we can benefit from CBD oil. Therefore, there is ample room for innovation within the industry. To make sure you keep up with competitors, you will need to stay on top of research.
By staying on top of research, you can share this information with your customers and build your reputation as an industry expert. This way, customers will trust your information, as well as your products, and they will make informed decisions. Informed customers purchase products that are well-suited to their needs, and so they experience better results. Therefore, they are more likely to return and recommend your products to others.
We suggest staying in touch with your customer base and encouraging them to give feedback. These consumer insights are invaluable, as they will help you identify areas where you are doing well, and areas that can you can improve upon.
Are You Ready to Get Started?
Now that you know how to start a CBD oil business, you are ready to take the first step – getting in touch with the team here at Cannmed. Our sales team have received extensive training, and they are experts when it comes to CBD. This means that they can advise you on everything from Novel Foods applications to branding for your white-label CBD oil products.
Contact the team today and let’s get started. Simply fill out our web form and we will be in touch with you as soon as possible.
You may also like to read: Cannabis Hemp Business: Sell CBD in 9 Simple Steps