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CBD Dropshipping: Everything you need to know!

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Dropshipping is a brand new modern online business model, in which you are only required to pay a small amount of initial investment. In another way, this business type doesn’t ask you to own a specific force of physical inventory, and you can totally sell goods via your website or any way that you like.

At the same time, CBD is currently legal in Europe and the United States, and you might see like you can see it everywhere all at once. You can see the coffee shops in the United States sell CBD lattes, some spas that provide CBD facials, and even lotions with CBD or hemp oils are being made and produced by beauty companies. Dropshipping CBD products is really simple in its process, which is also a cost-effective way..

If you are looking for an online business chance, I will give you’ve come across CBD dropshipping right in the recommended list. However, how does CBD dropshipping work? What are the actual benefits? or is this profitable enough for you to practicalize for your entrepreneurial dream? So, before we get any further in implementing a CBD dropshipping business, let’s start with our CBD Dropshipping Everything you need to know article today to make sure you thoroughly understand it before starting this appealing business!

What is CBD dropshipping?

Hold on, first things first. Do you know what CBD is? CBD stands for cannabidiol, which is the second most prevalent of the active ingredients of cannabis (marijuana). According to the US National Library of Medicine, CBD is understood as a chemical compound from the Cannabis Sativa plant, which is also known as marijuana or help.

CBD is a naturally occurring substance used in goods like oils and edibles to impart a feeling of relaxation and calm. One of its cousins is delta-9-tetrahydrocannabinol (THC), which is in contrast with CBD because the major of this ingredient is in marijuana; meanwhile, CBD is not psychoactive. Some studies point out that CBD has powerful anti-anxiety, anti-inflammatory, anti-convulsant, and pain-relieving properties.

What is CBD?
What is CBD?

Dropshipping is not so strange in today’s world, as 33 percent of online stores choose this method as a fulfillment model. Dropshipping is known as a kind of retail fulfillment method, which doesn’t have to get a store for stocking products, and you buy goods from a third-party supplier instead.

Subsequently, the products will be directly delivered to the consumer. In this method, the seller will not have to handle or touch the product in a direct way. Dropshipping is so beneficial for entrepreneurs because the owners don’t have to follow the traditional retail model by opening a brick-and-mortar store to stock products; meanwhile, the suppliers are those who take charge of storing goods in warehouse space.

What is Dropshipping?
What is Dropshipping?

So, what is the merchant is the main responsibility in this form? They are responsible for getting customers, then processing orders. This means you will become a middleman, and you will get the share of the profit by marking up the items that you sell. Sounds so simple, right? That’s why you can easily join in and build a long-lasting business in the long term right from your laptop.

At present, dropshipping CBD in the United States and Europe is legal, and it still keeps the simple process. Also, there are many CBD combined products that you can see in the market, from CBD infused beauty products to CBD infused coffee. CBD oil tinctures, CBD edibles such as capsules or soft gels, and CBD topicals such as creams and gels would be the most popular items.

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How does CBD dropshipping work?

There is a CBD company named Doc Patels that has pointed out that drop shippers should follow the information given in the order, after that, we will find the product, package, and complete the order. More detailedly, Doc Patels also marked the process of how a CBD dropshipping order work:

  1. There is a customer who visits your website online and decides to buy an item.
  2. You will be notified about the purchase.
  3. Then, you receive the order’s information and forward it to your dropshipping partner.
  4. The dropshipping partner will collect the order to packaging it.
  5. Finally, your customer will get the package shipped on your behalf.

In some ways, CBD dropshipping does benefit your business when you don’t even have to buy anything upfront and enable your business to have an opportunity to provide a large number of different products and see what will work for your business model best.

Is CBD dropshipping profitable to do?

As I have mentioned, using drop-shipping CBD is getting more and more popular over the years. There have been so many people who can make actual money by selling CBD, and it is recognized to have the profit potential. Here are 3 main reasons for making CBD dropshipping profitable to help you find out why dropshipping CBD may be right for your business model.

CBD industry is growing fast

There are leading expert cannabis researchers who have made a BDS Analytics and Arcview Market Research project on the sales of CBD products in the U.S.

They predict the sales of CBD goods will exceed $20 billion by 2024, and the market size is increasing year by year. Meanwhile, the profit potential is unlimited.

CBD is a growing fast industry
CBD is a growing fast industry

Additionally, it is reasonable to afford the process of extracting CBD from the hemp plant for two reasons. Hemp is remarkably less expensive than cannabis, and hemp also contains more CBD than cannabis, making the extraction process inexpensive.

CBD is effective and Customers may repurchase

An item can be repurchased from one to many deals with many customers. Your customer can consistently use to experience the benefits of CBD, which can effectively contribute to your business profit. In addition to that, CBD has a powerful capability in healing ADD, ADHD, back pain, epilepsy, insomnia, migraines, panic disorders, and many more. That’s why almost anyone and even pets can utilize CBD, and when they repurchase, your profit will go huge!

Dropshipping CBD is cost-effective

Of course, this is a cost-effective method when you can completely reduce or eliminate the fee for paying warehousing costs and tracking shipment costs. If you partner with a CBD dropshipping company, you can make use of their existing business arrangements with warehousing as well as the packaging on your behalf.

Is CBD dropshipping legal?
Is CBD dropshipping legal?

First of all, CBD is a controlled substance under United Nations drug control conventions. It is currently legal to dropship CBD in the USA and EU, but not in Canada or Australia.

  • In the USA: cannabis plants were classified into two categories by the government: the hemp plant is less than 0.3 percent THC and the THC that derives from the marijuana plant that has more than 0.3 percent. For extracting CBD purposes, the hemp plant is a more suitable choice as it has a higher concentration of CBD than marijuana. Plus, this category is legal to grow in all 50 states.
  • In Canada: marijuana is legalized here; however, due to the EU stance, it is considered a controlled substance. Consequently, CBD, and products that have CBD in need to follow all of the rules and requirements that apply to cannabis under the Cannabis Act and the regulations. Under the Cannabis Act, they regulate CBD products, including CBD derived from industrial hemp plants and CBD derived from other varieties of cannabis, in a strict way. That’s why CBD is only legal when it is sold in compliance with the Act and its regulations. In this case, you must have a processing license to produce items that have CBD for sale, no matter what the source of CBD is. If you want to manufacture cannabis oil, you must be the federally-licensed sellers of cannabis for medical purposes.
  • In the EU: CBD oil that contains no more than 0.2 percent THC is legal. This will likely be lowered to 0.01 percent in 2021. Also, the THC must not be easily separated from it. Additionally, it is forbidden to have CBD packages labeled with medical claims such as CBD content, manufacturer details, or ingredients. The rules in the EU on industrial hemp cultivation should be harmonized in a productive and efficient hemp market.
  • In Australia: In 2016, the government has legalized cannabis for medical reasons in 2016. They have re-classified CBD from an illegal prohibited drug by prescription only. What is more, CBD is still strongly managed and available to only a limited number of people with a medical prescription.

What are products for CBD dropshipping?

As I have mentioned, there are so many CBD infused products that you can find in the market today. The most common products that you will see in CBD products dropshipping are CBD oil tinctures, CBD edibles such as capsules or soft gels, and CBD topicals such as creams and gels. Here are specific categories that you will find:

  • Edibles: Edible products are parts of a growing sector of the industry. These types can contain baked goods, candies, gummies, and other foods. CBD edibles have covered the scrutiny from the U.S. Food and Drug Administration; however, they are still now popular in products on the market.
  • Topicals: In topicals products, they often contain gels, creams, and sprays and bath bombs for aches and pains. To target a localized region of the body or bath bombs, these items are often located directly on the skin or treat the whole body.
  • Sublingual tinctures: Sublingual tincture type is from CBD oil in a small bottle with a dropper inside. This item is often ingested by placing drops under your tongue and letting the oil being absorbed into your bloodstream.
  • Vape concentrates: For making vape machines purposes, CBD oils and waxes can be used with a specially designed device to vaporize and inhale the CBD item.
  • CBD capsules: This item derives from a gelatin capsule or soft gel. Taking a dose of CBD, capsules would be an extremely fast and convenient way, which are also quicker to use than tinctures and isolates. Users who want to stay clear from edibles or just want to take CBD in a fast familiar form will be love with this type.
Products are allowed to used for CBD dropshipping
Products are allowed to used for CBD dropshipping

Where to find suppliers for CBD dropshipping

Basically, dropshipping CBD products is quite a new industry, then it would be the best solution for you to have a perfect corporative supplier to help you customize your buyer’s shopping experience.

In this section, I would recommend you start your business with Dropified Supplements on Demand plan, an experienced company in the industry. You will not only have to dropship CBD but also can customize all your labels and construct your own brand without having to be concerned a lot in purchasing inventory or minimum orders.

Rules and laws you need to follow

Here are some important rules and laws that you need to know before starting your business. There is a Canadian based company that is designed to serve online retailers around the world - Shopify. This platform feature is perfectly created to help US merchants sell CBD goods online, and even in brick and mortar locations. And of course, it has to be allowed by law.

In Canada, CBD is believed by most sellers to be a legal product as it does not cause intoxication, and they don’t realize that they are indeed violating the law by selling it. In the UK, buying CBD through PayPal is legal, but US restrictions regulate Paypal’s action. Also, PayPal in the UK still considers CBD as a narcotic, which makes it pretty high-risk for CBD companies that use PayPal as a payment merchant.

Many reports have been conducted that PayPal has frozen the funds and accounts of CBD stores that sell legal items in the UK. All different goods such as CBD vape liquids, capsules, and oil are included.

Unluckily, there is nearly no way to attract the decision, which makes the businesses incapable of accessing the funds they need with a view to continuing operations and cash flow issues that might lead to the closure of some businesses. You should pay attention to this risk as this can make Paypal be an infeasible option for CBD stores.

Rules and laws that you need to pay attention to
Rules and laws that you need to pay attention to

The sale of CBD worldwide was banned on Amazon and eBay. Meanwhile, Stripe - a credit card processor has allowed CBD businesses to access to credit card processing services in the USA. In 2019, Facebook said it would move its prohibition on some CBD items, which means some ads to promote topical hemp products via the social networking platform can now be published.

Alphabet Inc.’s Google company is still making efforts to end its ban on advertising for cannabidiol products via a test program, which enables you to choose companies in the hemp sub-industry to buy ads on its platform. However, some restrictions still are there.

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Final words

Now that you know more about CBD, the benefit of CBD dropshipping and the laws in different countries. Just keep in mind that everything has its own pros and cons, and so does CBD dropshipping. All of this given information might sound like a complex puzzle at first, but when you strive to learn, it is going to be a smooth process for everyone.

Day by day, there are more and more resources that can support you to run CBD dropshipping business easier than ever before. I believe this article has provided some great advice and knowledge to get started. If you worry about having absolute zero business experience, I believe you still easily make a profit. It might be demanding at times, but it’s more than worth it.

So, I hope you are now satisfied with the question about “What is CBD dropshipping?”, “Is CBD dropshipping legal?” and all the basic things that you had before getting started. Now, it is your turn to decide and start planning for your dropshipping business including a strategic plan, or evaluate opportunities and costs, to make your dream come true. If there is still something on your mind, don’t hesitate to ask us or leave comments below. We are always there!

Sam Nguyen is the CEO and founder of Avada Commerce, an e-commerce solution provider headquartered in Singapore. He is an expert on the Shopify e-commerce platform for online stores and retail point-of-sale systems. Sam loves talking about e-commerce and he aims to help over a million online businesses grow and thrive.