Head Shops have been a common fixture on our streets since even before the recent nationwide push to legalize cannabis. But in a sense, they’ve always operated in the shadows. That’s because the regulatory environment has always been unfriendly to headshops, even if they brand themselves as tobacco accessory stores or even retail outlets for cultural objects.
But regulations are changing.
With the emergence of the new cannabis industry, head shops have more opportunities than ever to reach their customers. They’re no longer relegated to the dark corners of our cities, and they can even sell online.
If you own a head shop or are interested in starting one, you can’t ignore ecommerce. Although it represents only 10% of all retail sales, online retail is growing rapidly. According to Forbes, you can expect in-store retail sales to drop from 90% to 80% due to increasing online purchasing.
What’s more, different types of products sell better online than others. Groceries, clothing, and big-ticket items like cars can be difficult to sell online (although this is changing quickly), whereas books, video games, and other leisure products sell relatively well.
In the cannabis economy, not every customer will want to walk into a head shop to make their purchase. Because of the privacy of buying online, ecommerce head shops can thrive with the right approach.
Building an Ecommerce Site Vs. Selling on a Marketplace
Online cannabis marketplace models are still in their infancy. At present, you could attempt to sell products over existing marketplaces, such as Amazon or even Etsy, but most of these marketplaces have policies against what they consider to be “drug paraphernalia” and will deny you even if you use legal disclaimers like “for legal use only.”
In other words, just because the law says it’s legal to sell tobacco pipes online, that doesn’t mean online marketplaces have to allow it. They set their own policies, and they have full discretion over who can sell on their platform and who can’t.
Online cannabis accessory marketplaces are something to keep an eye on. But because of the difficulties inherent in current marketplace models, building an ecommerce website is still the best option if you want to sell cannabis accessories online.
If your website meets all the legal and regulatory requirements, no one can tell you what you can and cannot sell.
Of course, this creates a new set of challenges. You’ll need to be able to process credit and debit card transactions through your website. You’ll need to build the website itself and you’ll need to get plenty of traffic if you want to be profitable.
Payment Gateways and Credit Card Processing
You can’t run an ecommerce site without processing credit and debit cards. But this is one of the biggest obstacles you’ll run into if you want to sell cannabis accessories online.
Banks and merchant service providers don’t like the cannabis industry very much (not yet, at least). Most cannabis retailers are underbanked, and many must still accept cash for the bulk of their transactions because they can’t acquire credit card processing services.
Even alternative payment methods like PayPal list “selling drug paraphernalia” as one of their prohibited activities.
Being able to process credit cards isn’t just a necessity, it’s important for your success. Consumers spend 241% more on credit card transactions than debit card transactions.
Likely, you’ll need to obtain what’s known as a “high-risk merchant account” to process credit cards. These are payment processing accounts provided by companies to businesses who operate in high-risk industries. Since the cannabis industry is so new and regulations vary by state, it’s considered “high risk.”
Be careful when navigating these types of accounts. Many of the companies that offer them lack in transparency and may hit you with hidden fees. That said, there are a few reputable companies that offer this type of account, and it’s exactly what you need to get into business online.
Building and Marketing Your Ecommerce Site
Building an ecommerce website is relatively straightforward, but there are a few steps involved. To get started, you need to do the following:
- Purchase a domain
- Hire a good web developer to build your site
- Register your business (you may want to get help from an attorney)
- Choose an ecommerce platform
- Obtain a payment gateway
- Market your site
Registering your business and acquiring a payment gateway will be the hardest two parts of this process. Most ecommerce platforms (Shopify, WooCommerce, etc.) have no issue if the products you sell are legal:
If you can conquer those hurdles, you’ll be ready to start marketing.
Most advertisers won’t accept your ads, even if they are for cannabis accessories. That means you need to get creative with your marketing — most of your traffic will be organic. We recommend a multi-pronged inbound marketing approach that includes:
- Web design
- Public relations campaigns
- Social media marketing
- Graphic design
You can even place articles on industry-specific websites to get your message out to the right people. Most publications are hungry for informative content, and they have a built-in audience that will be interested in your products.
On your own, you can use a dedicated content strategy to establish yourself online. If you include some basic SEO principles, a backlinking strategy, fantastic design and branding, and a social media presence, you’ll be able to drive serious sales on your ecommerce website.
Get Help with your Cannabis Ecommerce Marketing
It can be a challenge getting noticed on the internet, especially with all the buzz around the cannabis industry. There’s a lot of competition for the best search keywords, and plenty of other ecommerce sites may have already beaten you to the punch.
But with the right tools and approach, you can unseat the big guys. Contact ReadyGreen today to learn how we can help your cannabis ecommerce business.