4 Ecommerce Challenges Facing the Hemp Industry

December 21, 2017

The cannabis oil industry is growing quickly, especially with the addition of a new product known as cannabidiol (CBD) hemp oil. These products are in high demand and are sold by retailers in every U.S. state and well over 40 countries globally.  Like the majority of other industries, the hemp industry (specifically CBD) is making its move toward online, multichannel selling. However, ecommerce for CBD oil sellers can be challenging – even more so than for online sellers of other products. In this post, we will examine some of the most common obstacles that ecommerce hemp retailers face today.


1. Public Perception of the Hemp Industry One of the biggest challenges that hemp and CBD oil merchants face is the perception of many people that hemp and marijuana are the same thing. In fact, this misconception led to the controversy that caused hemp sales to be banned for nearly 80 years. The reality is, although hemp and marijuana are both part of the cannabis family, they are completely different in cultivation, function, and application. While the use of marijuana is becoming more widely legalized, it has a history of being an illegal drug that is used for recreational purposes. Hemp, on the other hand, is used in a variety of other ways that include clothing, skin products, pet products, dietary supplements (the use of CBD oil), and thousands of other applications. The sale of hemp is completely legal, however the perception that it is essentially the same as marijuana often causes potential buyers to shy away from buying products that are derived from it.

It’s crucial that you use blogging and other content to educate potential customers about the misconceptions of CBD oil and other hemp products. The negative impression that these products receive can only be eradicated by providing readers with honest and accurate information about them and their helpful uses.


2. Marketing is Often Limited to Organic Search and Email Campaigns Another challenge that CBD hemp oil sellers face involves marketing their products. There are many marketing avenues available to other ecommerce companies with different products that simply are not made available to CBD oil retailers. Most ecommerce advertising strategies like Google AdWords, Google Shopping, Bing Ads, Facebook, Twitter, and many others, either prohibit CBD oil ads completely or highly restrict what sellers can advertise. That means that search engine optimization (SEO) for CBD oil sellers must be strong, and email marketing campaigns become essential. The content that is posted on ecommerce websites that offer CBD hemp oil for sale must be optimized for higher search rankings, and email marketing campaigns have to be segmented to reach the appropriate target audiences.  

When you understand your customers – demographics, buying behavior, etc. – you are better able to customize and personalize email marketing campaigns. Using a solution like Glew, will provide you with the customer segmentation that you need to be able to analyze and contextualize customer data, which in turn, allows you to make the most of your marketing efforts.


4. Competition for CBD Hemp Oil Sellers is Fierce Competition for ecommerce sellers of all types of products is huge, but for CBD oil retailers it may be even bigger. The CBD hemp oil market is growing rapidly, and ecommerce sellers are popping up all over the place to meet customer demands. To be a leader in the CBD oil market, staying competitive is challenging and it requires research into the competition, quality products with high ratings and reviews, and a deep understanding of product performance.

Staying ahead of the competition is a challenge that is best confronted with a strong analytics and reporting solution. When you utilize product-specific metrics and reporting, you are able to see and analyze exactly how each of your products perform, which is essential in the current CBD hemp oil market. Glew helps CBD oil sellers understand product segments (for example, best bundles and most profitable products), so you can understand what is improving or hindering your store’s performance, so you can effectively adjust strategies to stay competitive.


5. Payment Options May Be Limited Processing credit card payments for customers is another area where ecommerce companies selling hemp-related products run into challenges. Because credit card payment providers use merchant codes for sellers when processing payments, it can get complicated for CBD oil sellers. Merchant codes include categories like utilities, groceries, gas, and many others. Unfortunately, there are not currently any merchant codes that differentiate hemp-related products and marijuana products. So, products that are derived from hemp are categorized along with marijuana and cannabis products. This is why payment processing becomes an issue. While some states have legalized the sale of marijuana, it is still illegal to do so federally. Due to that, many credit card processors will not work with companies selling these types of products.

Look for credit card payment processors who accept “high-risk” merchants. There are a number of processors who will provide you with payment processing for your website – but you will pay higher fees than the typical ecommerce seller. At this time, these may be the only processors that you are able to use.

Final Thoughts about Hemp Industry Challenges

Even with the above challenges, entering the hemp industry can be a successful and lucrative business choice. The market is ever-growing and the demand for products like CBD hemp oil is high. Additionally, laws, rules, and regulations are changing constantly, so challenges are likely to become less taxing in the future.

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