The 101 Guide to Buying Wholesale Bulk CBD Oil

The 101 Guide to Buying Wholesale Bulk CBD Oil

The CBD market is on track to hit $22 billion by 2022. As the industry continues to grow in leaps and bounds, more wholesalers are popping up. 

However, there isn’t much information that can help wholesalers navigate this relatively new market. Between choosing a credible CBD brand to carry and figuring out how much CBD oil to buy, wholesalers can get lost in all of the questions.

But if wholesalers want to capitalize on the CBD industry’s growth, they’ll have to grasp how the market works and how to make the best decisions.

How can a wholesaler buy and sell bulk CBD oil?

Most CBD brands require wholesalers to prove they are a business before they create a wholesale account. Wholesalers are expected to enter their business license number as well as their resale tax identification into the application form. 

The wholesaler’s information proves that they won’t have to pay taxes on bulk orders. However, it will also showcase that they’re allowed to do business and will actually try to sell their CBD products instead of slapping a label on them and reselling them on Amazon.

But even when wholesalers do their due diligence, they still face challenges when they buy and sell bulk CBD oil in the marketplace. Because the industry is so new, most wholesalers encounter three unexpected obstacles as soon as they enter the market.  

1. Most CBD wholesalers don’t understand how to sell and market CBD products

Cannabidiol and other CBD products aren’t fully understood by most wholesalers yet.  As such, wholesalers have to ask the CBD companies they’re buying from for marketing and sales material that can help get the products off their shelves. Unfortunately, some CBD brands are not much help, leaving wholesalers with loads of products they don’t know how to sell.  

However, wholesalers should try to find CBD brands that are going to help and work with them. For example, when a wholesaler comes to Kat’s Naturals and asks for sales assistance, we give them marketing material and educational information to support them. While the information is limited because CBD brands are not allowed to make health claims, our wholesalers still appreciate the collateral that the company provides.  

Our team also offers to teach a class to help wholesalers and their employees understand what they’re selling. And currently, our brand is working on an educational video series to help inform wholesalers even more. 

2. Many CBD wholesalers are afraid to carry more than one brand

When someone goes to a grocery store, is there just one brand of anything? No! People love choices. Consumers love different price points, and they like to purchase brands—within the same category—for different reasons. The same is true for the CBD industry.

Consumers look for different benefits in every product. A customer might like one CBD brand because their products enhance relaxation, but he or she might prefer a different CBD brand because their products alleviate pain. By choosing two or three good CBD companies to buy from, wholesalers can sell multiple products side-by-side to cater to a wide variety of consumer needs and interests.

3. Wholesalers can struggle to find a good CBD brand to work with

Because so many CBD brands seem similar, it can be difficult for wholesalers to figure out which brands are the best fit for their clientele. But to differentiate between CBD brands, wholesalers can try a few things. 

First, a wholesaler can observe how a brand labels its products. Is the label clear? Will consumers understand what’s in the product, as well as how to use it correctly? A good CBD brand will always have a simple but informative label, and wholesalers should work with businesses that offer this benefit.

Another good strategy is to check whether a brand uses QR codes. At Kat’s Naturals, we put a QR code on each CBD product so that consumers can go straight to the Certificate of Analysis (COA) to check the remedy’s ingredients and potency. This readily available information is beneficial for consumers and wholesalers because they can know that a CBD product is credible.

The last tool is to simply ask the company’s CEO what makes their CBD products different from others. For example, a CBD brand may use essential oils in their formulations to bring out different aspects of their CBD oil. This additional ingredient might make one brand stand out over another because most CBD companies don’t use essential oils.

How can wholesalers partner with the right CBD brands?

A vital component of a wholesaler’s success is the brands they choose to work with. Wholesalers should thoroughly research and vet different CBD brands to ensure they purchase high-quality products from credible companies. Luckily, there are three strategies wholesalers can use to find a reputable CBD brand.

1. Request a Certificate of Authenticity (COA)

It is the wholesaler’s responsibility to research how a brand’s cannabidiol was sourced and extracted and whether that brand tested the quality of its CBD oil.  Some companies will market and sell their remedies as “CBD products,” but many of them contain no cannabidiol at all

As a result, wholesalers should ask every CBD company to send over their most recent COA. Then, that COA should be checked against their past COAs to look for discrepancies. If a CBD company refuses to send a COA (or the COA doesn’t look right), that should be a red flag.

2. Make sure the company understands CBD

A good way to check whether a company actually knows what they’re selling is to communicate with their customer service team. This strategy is a great way to check whether a brand understands their industry and products.

Customer service teams have a vital role in companies. In fact, according to NewVoiceMedia’s 2018 “Serial Switchers” report, businesses lose more than $74 billion dollars a year because of poor customer service. This number has increased by $13 billion since 2016. 

So if a CBD brand doesn’t have a knowledgeable customer service team that provides clear answers, then the wholesaler should rethink the partnership.

3. Utilize websites that have company reviews

Remedy Review recently put together a report that analyzed various CBD companies to see if their products and brands were credible. After completing third-party lab testing, Remedy Review published the findings to hold brands accountable and provide insight for consumers.

Sites like these are great tools for wholesalers because the information shows which CBD brands are safe and which brands are not. With unbiased information, wholesalers can narrow their list of potential CBD partners.

4. Weigh the benefits of going with a large or small company

In the CBD industry, wholesalers are unlikely to get a price break with smaller companies. A new or small CBD brand might not have the ability to produce its own cannabidiol or buy large quantities. And these choices can trickle down into the CBD brand’s price structure. If a wholesaler wants a significant price break, then a small CBD company may not be the best brand to partner with.

However, if a wholesaler needs a lot of help selling their CBD products, then a smaller company might be beneficial. A small CBD brand will have enough room to provide more one-on-one time and will take the extra step to nurture the business relationship. 

Stipulations CBD companies have when partnering with wholesalers 

Many CBD companies have common-sense rules regarding where and how a wholesaler sells its CBD products. The location a product is sold in can greatly affect a consumer’s perception and opinion of a brand. So, there are a couple of stipulations that most CBD companies require wholesalers to follow:

  • Products may not be sold in certain locations. For example, a CBD brand might not want to sell their products in an all-adult store. Most CBD companies want to sell their remedies in stores that carry high-quality items that serve a general audience. 
  • Products may not be sold on Amazon. Wholesalers must remember that it’s actually illegal to sell cannabidiol on Amazon. So, if a consumer orders CBD oil on that e-commerce site, the product will not have any cannabidiol in it. 

The best amount of bulk CBD oil to order (the first time)

Usually, CBD companies have a minimum order in place for wholesalers. However, the price will depend on the size of the wholesaler’s business.

For example, some CBD brands provide a low minimum purchase for smaller wholesalers because they want to see new businesses continue to buy and sell bulk CBD oil. But if a wholesaler has multiple locations or heavy foot traffic, then a CBD brand might only give a higher price break if the wholesaler makes a large initial order.

Why wholesalers should rethink white-labeling

Some wholesalers might not see the benefit of purchasing bulk CBD oil or any CBD products at all. Many wholesalers sell CBD oil for the first time and then want their own line because they think they’ll make more money.

But, to be honest, white-labeling is not a good idea. The tactic only dilutes the CBD market and makes it difficult for consumers to know which brands to trust. 

Instead of white-labeling, wholesalers should focus on carrying CBD brands that people already know and find reputable. Wholesalers don’t need to spend money to market and advertise their own CBD line when they can work with a brand that already has a good reputation. Besides, it will cost more money to compete with CBD brands that already have strong relationships with consumers. 

If wholesalers really want to make a profit, they need to capitalize on relationships with credible CBD brands that have a strong customer base. It’s better to sell a trusted product than to create a CBD line that consumers may not buy because they don’t know it.   

Learn as much as possible

The CBD market is booming and growing rapidly. Wholesalers who want to get into this market have their work cut out for them.

They have to learn as much as they can about the industry,  its products, and different CBD brands. But once wholesalers do all their research, they can start to monetize their efforts and work with their favorite cannabidiol companies.

Don’t keep this article a secret! Share it with another wholesaler who needs answers to the same questions this article covered. Looking to discover your first high-quality CBD oil? Take a look at Kat’s Naturals‘ products. 

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