Despite being considered a high-risk business, the CBD industry is booming right now. Indeed, as a wellbeing supplement, CBD is more popular than ever. Consumer demand is high, so while the market may appear crowded, it seems like the ideal time for startup and small businesses to take a dive into the world of selling CBD.
However, there can be many obstacles. How do CBD businesses manage their finances and handle card processing when they’re considered a high-risk business, which prevents them from gaining access to many of the necessary tools and payment solutions provided by traditional banks and financial institutions? And how do they manufacture, test and sell their own products, when they’ve only just started out or are new into the CBD space?
A good, modern and flexible payment solutions provider can manage the credit card processing side of things. For CBD production, white labeling could be the answer you’re looking for.
What is white labeling?
White-label products are those made by a single manufacturer that are then sold to multiple retailers who brand them however they like. This happens in a range of industries, from snacks to liquid roofing products and just about everything in between.
CBD is no exception. Many CBD products, like CBD oils or gummies, may be manufactured by a wholesaler and shipped to various retailers that put their unique branding on the package.
Benefits of white labeling for businesses
Buying and then selling your own branded products can be difficult and expensive. To make a profit, you have to mark up the products much higher than you bought them for, which may keep savvy shoppers’ credit cards in their pocket.
White label CBD products are less expensive as you’re not paying for the prestige of a particular brand, but simply the quality of the product. Other benefits include:
- Control over brand image
- Control over advertising and marketing
- An opportunity to build your own brand loyalty
- The ability to easily measure your own success
There are benefits for the manufacturers, as well, not least of which that they can focus on quality production rather than marketing and advertising.
How to start with white label CBD products
First, ensure that you are starting a relationship with a CBD manufacturer that produces high-quality CBD goods. Third-party lab testing is essential, and you can use that as a unique selling point on your website or marketing material. Do some research and ensure your chosen manufacturer is fully compliant in terms of safety, liability and THC level, which should always be 0.3% or lower.
Your research should also include checking that hemp growth is organic and toxin free. Gaining some understanding of the extraction process your chosen supplier uses will help, too.
There are lots of CBD shops out there now. How will yours stand out? Think about how to make your brand unique and appealing. Already established and proven, white label products give you the chance to do just.
You also need to consider who your key audience is. Understanding this will help you with your branding and marketing campaigns. Make your offerings unique, following the current trends for your audience and appealing to consumers by offering relevant solutions. That could include supplements for energy or health, promoting stress relief or adding unusual flavors.
A flexible solution
CBD is still classified a high-risk business by many banks and financial institutions. That means many CBD stores can be put off looking at white label solutions, as it’s not clear how they will take payments from customers other than with cash.
FLEX Payment Solutions offers a range of customized debit and credit card processing and contactless payment options. This helps you focus on setting up your white label partnership to brand and market CBD products, without the stress of worrying how you will take card or mobile payments, or having to compete with other larger vendors that perhaps already have credit card payment solutions in place.
FLEX provides excellent customer service and high-risk expertise because we know our clients and understand their unique challenges and opportunities. We have a unique compliance background and are here to support your CBD business. We know white labeling is a real opportunity for many merchants who want to sell CBD products and stand out in today’s market, so contact us today to learn about how we can help you.
