The Pains of Selling CBD Online & How to Get Around Them

Any retailer who sells CBD through an online platform knows how troublesome it can be. Since the Food and Drug Administration has only approved CBD as a prescription drug, and many state laws differ about the sale of CBD products, it is quite risky to sell this hot commodity without needing to jump over numerous hurdles just to get the product to your customers.

CBD products have been on the rise in the past couple of years, and especially with the coronavirus pandemic making everyone anxious about their future, recently CBD companies have seen a huge jump in sales. Trying to make the most out of a profitable situation, businesses have been flocking to ecommerce platforms to make their products more readily available to customers.

Choosing the Right Payment Processor

Plane Jane Hemp, a CBD start-up e-tailer, has had to face a few of their own hurdles while selling online, one of the main ones being the payment processor they were using before switching over to BigCommerce. The company was utilizing Shopify’s ecommerce platform in the beginning and ultimately made the switch to BigCommerce when they tried a new payment processor that wasn’t working with Shopify’s platform.

“We paid a lot of money to Shopify to use their payment processing platform, and it was our main issue. We would get shut down and wouldn’t be able to get it back up,” Lindsey Holthaus, CEO and Co-Founder of Plane Jane Hemp, said. “One day they said ‘hey, by the way, you’re not going to have Visa on the platform anymore.’ We had no warning, and they did it to all the companies.”

According to Evan Marshall, Plane Jane Hemp Co-Founder and CTO, in a statement, a lot of CBD companies also have issues with the payment processing options on Shopify. There are some really common options that Shopify doesn’t support, including Square, which was the first large company to get into payment processing for CBD.

Product-Based Shipping Restriction Rules

The legality of CBD is different in each state, making it extremely difficult for companies to ensure which consumers can purchase your products. According to BigCommerce, many states amended their state drug law to remove hemp from their state controlled substances act while adopting the FDA’s position on the sale of hemp-derived CBD products. Certain states prohibit the sale and consumption of CBD, while other states limit the types of CBD products that may be sold in that state or require a specific license.

To help keep your business compliant in each state, it’s important to restrict which shipping and/or payment methods are available on a product-by-product basis through specific shipping platforms, such as Intuit Solutions (www.intuitsolutions.net). This can help you stay within safe shipping zones and still help to get your products out to the right customers.

Get the Lowest Possible Chargeback Rate

Payment processing is such a pain when you sell CBD, which is why Marshall says you want to make sure your chargeback rate is as low as possible. One of the most important tools Plan Jane Hemp uses on BigCommerce is an app called NoFraud. This app sits on top of the payment processing and adds a loop to the company’s order status that helps them verify an order’s validity before fulfillment. Since making these changes in their company in September of 2019, Plane Jane Hemp has grown their business 280 percent year-over-year, conversion rates have increased from 5.7 percent to 6.55 percent, and they are saving about $3,500 a month from extra added and hidden fees. Making sure your business does everything it can to protect itself from state laws and hidden fees is a sure way to gain success.