The CBD market is exploding, but it’s still a tricky time for entrepreneurs. State laws are evolving, so it can feel like there’s no solid ground on which to build a company. Business owners can still have trouble finding financial services. National advertising platforms continue to impose their own marketing restrictions, making it hard for CBD brands to stand out.
Here, entrepreneurs in the industry share challenges they’ve faced and solutions they’ve found.
Financial tools aimed at the CBD market can have very restrictive requirements, limited payment options, and high fees said Michael Aaron, vice president of marketing for CANVAS an Austin-based provider of premium CBD products. It may take some work he said, but it is critical to find a reliable e-commerce platform and payment processor.
After some less-than-ideal experiences, Aaron found a great match for CANVAS in payment platform company BigCommerce, which helped him customize his system.
An important part of the relationship was to be treated like any other legitimate company, said Aaron. “We are still considered a ‘vice’ like guns or e-cigarettes and highly restricted” by companies including Facebook and Google, as well as most U.S. banks he said.
In his partnership with BigCommerce Aaron says the team has been responsive and helpful “all the way up to the CEO.”
Aaron also moved his company to payment processor Square, which he said offered reasonable fees and accepts a variety of payment types. Square recently published their rates for CBD companies.
Timely funds distribution was also important to CANVAS. “Our previous partner had a 30+ day hold over period for our funds,” said Aaron, “Square is next day.”
Chris Van Dusen is chief marketing officer of CBDistillery, a Denver-based manufacturer and seller of U.S. grown, hemp-derived CBD products. Van Dusen’s advice to others in the CBD market is to build consumer trust by “offering education and clearly communicating what your brand stands for.”
„With over 3,000 companies currently occupying the CBD space, creating brand loyalty and unique property value are essential to setting yourself apart,” he said. Amplifying that trust and the brand message through loyalty programs, friend referrals, “surprise and delight” offers and education help build the customer base.
CBD for Life
CBD for Life
Julie Winter, vice president of iA CBD and CBD for Life said growing online sales in the CBD space has been difficult due to marketing and promotion restrictions through traditional channels. Still the company has been able to find success she said, by sharing its passion for hemp through social media without doing any kind of paid promotion, and sharing positive reviews of its products.
Winter also noted that a good email strategy is a powerful way to drive web site traffic. Once the consumer in engaged though, it’s important to provide a seamless shopping and checkout experience.
Katherine Ragusa, Co-Creator of Lab to Beauty, a CBD premium beauty and wellness brand in Williamsville, NY echoes the importance of creating a user-friendly and engaging online experience for customers. Her goal has been, “sophistication and simplicity,” a clean, tastefully designed site, with direct information on how to use CBD and create a beauty routine around it.
Ragusa said she has found that embracing the “white space” is a key element to a tastefully designed site. “We did not want to busy up our site with overwhelming call to actions, etc.,” she said, “We wanted to keep everything direct and minimal, so that our ingredients and products could do the speaking.”