Have you heard about CBD Oil, HEMP Oil, synthetic marijuana oil and wonder why it is so popular in many states in USA? The reality is that lots people are buying it for their own medical purpose and for their pets too.
There are reasons why CBD oil is a hot products on the Internet.
- It works for many people and their pets.
- It is expensive.
- It’s illegal in some states.
- It’s high-risk business with high profit margin.
One big hurdle for high-risk merchant is the risk to lose their merchant account. It means no money will be made beyond that.
Wait! Things you need to know before getting started ...
[Update] Recently, we were notified by High Risk Central (the leading high risk merchant account broker in the USA) that one of the top USA domestic banks is now accepting USA based CBD/Hemp business to process credit card payment! It is only available to CBD/Hemp manufacture and retailer registered in the USA. Read the breaking news and learn the advantages of USA domestic CBD merchant account over offshore CBD merchant account.
There are things you need to know before investing your money into the CBD business. Make sure you understand the facts before jumping into the industry.
In CBD business, you will fail without a way to process credit card and ACH Payment. In other words, a solid credit card processing and ACH eCheck and merchant account is the MOST IMPORTANT key for your operation and success. Here are the minimum requirements to get a merchant account.
- A legal business entity – Do not use your personal SSN / sole proprietorship to run your CBD business. There is virtually no protection to your personal asset
- Minimum US $5,000 ending balance or US $10,000 working capital in your business bank account for 3 months or longer. The bank don’t like you running a high-risk business without capital to protect their interest. Period! [UPDATE] This minimum funding requirement is no longer required for USA Domestic CBD business or startup company, but it is still recommended for better approval rate. Because bank wants to make sure you have fund to support your CBD business operation.
We can’t emphasis enough. If you do not have the above things ready, your merchant account request is likely rejected no matter where you apply the merchant account.
I have a PayPal, Square, Stripe account or a standard-risk merchant account ...
Sorry. We have to inform you that your merchant account will be shut-down, if they find out that you are selling CBD/HEMP products online and offline. There is no exception!
What can you do about it?
If your merchant account is terminated, it means you won’t be able to make any money from your online store. In addition, it’s really hard to apply a new merchant account when you already have history of been shut down.
Apply for high-risk merchant account that actually allows selling products such as CBD, Peptide pill, nutrition supplement, MLM program and many products is hard. Because most USA based merchant provider consider those products really high-risk products. Many payment gateway such as PayPal, Stripe, 2CheckOout, Square, FirstData, Domestic Bank do not allow merchant using their credit card processor and payment gateway to process transaction in such industries.
Is your website hosting company good for CBD Store?
Most CBD online business don’t have a clue on where to setup their first CBD online store. So they were told to go with some big name e-commerce platforms or rock-solid WordPress hosting company. After working so hard for few months, the business owner got an email from the hosting company informing them that their CBD online store will be SHUT-DOWN. So do your research first. You can call or check out their policy/terms & conditions before working on building your CBD online store with the hosting company.
Here are a list of sites that will not allow selling CBD on their platform.
- BigCommerce – BigCommerce recently drops the support and do not allow to sell CBD on their platform.
Here are the few platform PowerFusion recommend.
Powerfusion can help!
Powerfusion is NOT a high-risk merchant account provider, we work with merchant account brokers that handle high-risk business like CBD, Peptide merchant and independent travel agency.
If your business has a higher risk to be shut down because you simply are using those known payment gateway, shopping cart, and merchant account provider, you need to act now before it’s too late.
Losing the capability to take payment means losing business and lose the revenue.
Powerfusion is an industry leader in helping high-risk business succeed on the Internet by offering the following services.
- High-risk Merchant Account – Powerfusion will refer you to trusted merchant account provider to streamline your merchant account application, speed up the underwriting process and to lower the processing fee.
- Setting Up Online CBD Oil Store with major e-commerce platforms (Shopify, WPEngine + WooCommerce) that support payment gateway integration for selling high-risk products. Give Powerfusion a call.
- Search Engine Optimization to boost merchant’s online presence.
- Tech Support to ensure the quality of merchant’s online service.
We also train the merchant how to identify risk, how to optimize their website and how to market their CBD online store to reach out more potential customers. Check out our E-Commerce consulting services!
Powerfusion has successfully helped many local smoke shop and vapor store to expend their business by selling CBD oil online and in the store.
8 Steps to start a CBD online store?
- Legal Business Entity. Please do not use sole-proprietary / your social security number to setup your CBD business. Due to the high-risk and liability, you may lose everything you put into this business. We highly recommend to setup an LLC. Please consult your tax accountant for more info.
- A Tax ID / EIN from IRS. Ever legit business will need to get this done. Your merchant account and bank will not approve your CBD business unless you have legal documents stats that you have registered your business properly.
- A High-Risk Merchant Account. This is the most important part of ensuring you can make profit with your CBD online store. Why? Since selling CBD online is consider a high-risk business, most US based merchant account provider, credit card processor and many smaller bank DO NOT accept application that involve with CBD Oil and HEMP products. There is one company that Powerfusion worked with for years, which can actually provide high-risk merchant account specialized for business selling CBD online and offline.
- A Solid Online Store. An online store is where you actually sell your CBD / HEMP products and to make profit. Unfortunately, many commercial shopping cart platform do NOT ALLOW you to sell CBD / HEMP products. You have greater chance to be shut down. Why? It’s primary due to the payment gateway and credit card processor integrated with the shopping cart platform. As we mentioned in the previous point, many payment processor do not accept transaction that involved with CBD and HEMP. No worry! Powerfusoion help high-risk merchant for CBD business to integrate with the payment gateway. There are solutions that allow CBD merchant to process credit card online through Shopify and WooCommerce (hosted on WPEngine) shopping cart platform or ACH payment offline.
- High Quality CBD Products. There are many CBD manufacture out there. You need to find a quality one and carry out their product line on your online store. Since selling CBD is a high-risk business, it also has high return. Once your customer like what they purchase, it’s hard to switch to other brand or CBD products. You can simply Google CBD Wholesale and find many good companies to work with. Do we have recommendation? Yes. However, we will not disclose them here to avoid conflict of interest.
- A Good SEO (search engine optimization) Strategy. As you know, selling CBD is illegal in many states, so you simply can’t buy pay-per-click to get traffic in most of the case. If you do see some out there running, they are likely to be shut down soon. So the best chance for your potential customer to find your online store is through a good SEO work for relevant CBD Keywords. Powerfusion is specialize in SEO and can help grow your CBD/HEMP business.
- Lower Operating Cost and Boost Net Profit. You need a workable place to lower your operating cost, hire right staff and to streamline your sales flow and inventory management.
- Find The Right Local Partner. There are many local smoke shop, vapor store and Marijuana recreation store out there seeking ways to expand their profit by selling CBD oil online. So there is your chance to find the right partners that can promote your CBD Online store while sharing a little profit with you. It’s like a lead generation without the up-front cost.