How Do I Become A CBD Distributor?
This is the ultimate guideline to becoming a CBD distributor. All the secrets, the questions to ask, and the things to look for will be laid out for you so that you can CRUSH sales and create a huge income stream for your business.
According to Forbes, CBD is expected to be a $20 billion market by 2024. Whether you are a wholesaler in cannabis, health, wellness, beauty or skincare, going forward CBD will be an integral part of your product catalog as one of the most requested ingredients in the last 12 months.
What are the steps to growing your business, and how can you profitably build out your supply chain? Read on!
Step 1: Do research & find 1-3 products that blow customers AWAY!
To find amazing companies, the first step is to walk into a high end CBD store near you and ask which are your healthiest, most unique, and best selling products. Think of CBD products like superfoods; the ingredients should be powerful and all-natural, and the packaging should be beautiful. You want the products to sell themselves! You can also find products like these in trusted press articles; journalists typically do a similar level of diligence as store owners when deciding which products to feature in gift guides or company spotlights.
TribeTokes for example has hands down the best CBD Vapes on the market, and store associates and the press alike will attest to this when you start to ask around. Our vapes have no unhealthy fillers such as PG, VG, or MCT oil, taste amazing and blow the competition away. Secondly, we have some incredible CBD skincare and beauty products that are healthier and more unique than other companies.
Step 2: Choose supply chain partners that also offer white labeling solutions
Some of your future customers will want to buy the luxury CBD products you are distributing. However, some customers may want to buy the product but put their brand on it with their own label and logo. Make sure your CBD partner is set up to support white labeling requests. White labeling customers often order large quantities and should be a significant portion of your business.
Step 3: Request distributor level pricing
Some companies only offer wholesale prices, which typically start at 50% of retail for minimum order quantities (usually 20-50 units) and then fall with volume. Distributor pricing is usually when a distributor buys thousands of units at a time to then distribute to individual stores at regular wholesale prices. You need to know the retail price of the products, the wholesale price at which stores will buy the product from you, and your lower distributor price so that you can make a healthy margin. Make sure your company clearly lays out these price breaks so that you make the margin you need.
Here is an example of wholesale and distributor using a half gram CBD vape cartridge:
- Retail Price: $50
A small store owner buys 5 of each strain to start, or 30 units: $25 each wholesale price
- If store owner sells out, he or she makes $750 gross profit or $25 * 30 units
A larger store owner buys 100 cartridges at $21 each (includes volume discount)
- If store owner sells out, he or she makes $2,900 gross profit ($29 * 100 units)
A distributor buys 1,000 half gram cartridges at $18, applying the distributor level volume discount
- Distributor sells half of these units to small store owner such as the one referenced above at the $25 price, making $7 profit * 500 = $3,500
- Distributor sells other half of these units to larger stores such as the one referenced above at the $21 price, making $3 profit * 500 = $1,500
- Distributor makes $5,000 total gross profit on average or $5 per unit distributed
Step 4: Negotiate profit sharing
In the example above, you would need $18,000 in capital to purchase your initial order of 1000 cartridges as a distributor. If you do not have this much capital to invest, but want to leverage your network and get paid to get a brand you like into stores, you can negotiate a profit sharing agreement with the brand and make introductions to them directly. For example, instead of selling directly to the stores from your own inventory, you can introduce stores to the sales team at TribeTokes and ask for 10-15% of the profits if the deal closes. Obviously, you should only work with brands you trust for these lead generation agreements, so they do not cut you out, and should sign a contract with them clearly outlining your commissions / payouts for introductions.
As with most things in life, higher risk means higher reward - so if you just make a sales introduction for profit sharing instead of physically purchasing inventory and distributing it yourself, you should expect to make a lower margin overall - BUT with significantly lower financial risk (actually $0 financial risk) and possibly the ability to scale faster. This is a great option when you are first building out your buyer network and don't have the scale yet to move thousands of units of product.
Step 5: Find out if your brands can help you with samples
Ask the company / brand if they are willing to provide samples to your big leads. They should either give you some free product to help you with samples or at least offer you a discount to buy products that you can then give out as samples. Since you will be working with amazing products that speak for themselves, samples are crucial to help you grow new business.
Make sure you qualify leads before requesting too many samples from a brand partner though, so you maintain your credibility and don't sample to people who just want free things :)
Step 6: How much support will you get closing deals?
Talk to 1-3 people at the company including their leadership team or owners to feel-out how much they will help you with the sales process. You want advocates within the firm who can help you close big deals. Companies that offer to do as many calls or meetings as you need to help you close your deals are what you are looking for!
Step 7: How much credibility does the company have for you to leverage?
Sales could be easy or hard depending on the resources that you have in your toolkit. If the company you are working with has press from top publications like Forbes and Rolling Stone, if they have a thriving social media presence, and many articles that you can point to it will make your sales process smooth. Good sales has to do with educating and guiding the buyer and if you can point them to great credible information your close rate will be higher, and sales will skyrocket.
Step 8: Are you treated as a distributor or a partner?
Most importantly you want to be treated as a partner. Even though you are not an employee or owner of the company you should be treated with the same level of respect and enthusiasm. After all, you are bringing the company business without them having to hire more internal sales people! Make sure you find a company to work with that feels like family.
We encourage you to do your own research and find the best CBD partners that work for you. At TribeTokes we aim to be the partner you can rely on to help you grow a huge distribution business offering some of the best luxury CBD products on the market. For more information on working with us, keep reading or fill out the contact form below!
Photos From Our Retailers
Why Work With Us?
The cannabis industry is evolving rapidly, as is the CBD Wholesale market. At TribeTokes, we are constantly innovating and launching new products to keep consumers engaged. We would love for you to grow with us over time.
We Stand Behind Our Products
Things happen in the consumer products industry. If you buy wholesale CBD vape oil, sometimes hardware breaks, cartridges leak. We will replace all returns and defects for you in your next order. Because #tribe
The Counter Culture just got a makeover. We help make your store beautiful with clean packaging. Our products look great displayed together on your shelves.
Want your own packaging? We can do private label cbd or CBD white label.
CBD Wholesale Interest Form
CBD Wholesale Interest Form
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