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How big is the CBD industry for affiliates and white label?

Cody Alt a serial entrepreneur, shares insights on participating in one of the fastest-growing industries in the world: CBD cannabidiol.

  • Within 6 months of CBD hemp becoming legal, already 6% of Americans consume it.
  • Due to chronic illness, many people will consume CBD throughout their lifetime
Cody Alt, CEO of Kushly. Photo credit: Kushly.com

A huge worldwide trend with strong demand:

Finding the perfect match, of a business opportunity that can do good for the world, which is profitable at the same time, is not something that happens often. But Cody Alt, the CEO of Kushly.com sees businesses like this starting up with phenomenal success all the time. He explains that “Research showed that a wide range of chronic illnesses are being treated by CBD, the US president came along and legalized it – and within 6 months of doing so, around 6% of Americans are already consuming it. This could be bigger than the iphone and windows: and it is powered by ordinary people like you and me, not by multi-nationals”. Right now, we are at the early phases of this trend – of an industry that will soon pass the $20 Billion mark.

Image: Cody Alt, CEO of Kushly.com. Image credit: Kushly.com

Doing good for the world while being profitable explained:

We all know that life expectancy in the US tumbled due to addiction problems associated with prescription medication. Now, for the first time, Doctors are starting to prescribe “plants, not pills” and millions of people are taking CBD cannabidiol as an alternative. There is a genuine opportunity to reverse addiction problems – and it is hoped that CBD can be a major contributing factor, especially where Doctors prescribe it for chronic pain, inflammation and neurological disorders.  Being a CBD retailer or affiliate, means that you’re working for a good cause, besides being in an industry that is hugely profitable.

 

(Read more here about becoming a CBD affiliate with Kushly.com)

 

Removing barriers and enabling more business owners to participate in CBD:

Many entrepreneurs ask the question: What is the most profitable affiliate or white-label opportunity and how can we jumpstart an uncomplicated business with record levels of consumer demand? CBD would have been a difficult industry if every seller needed a manufacturing plant and their own approval and certification. To bypass complicated procedures, white-labelling and affiliate marketing are two credible paths to success. Cody Alt already backs up hundreds of small business owners with a white-label solution. He explained: “Kushly.com enabled many entrepreneurs to invest in building strong brands without complications: since we focus on all the difficult aspects of manufacturing, product certification and delivery. Today they are successful brand owners with recurring clients buying from them month after month”. Affiliate marketing in CBD is also popular for publishers who sit on thousands of readers and followers, who seek to deepen their relationship with them by selling high-quality products that will become a source of recurring revenue for affiliates and ongoing satisfaction for the end-user.

 

Talking numbers: How much can new CBD brands earn?

The macro numbers are clear: it may not take long for the US to surpass the 10% mark, if already 6% of the population are taking CBD today. Apply this logic globally, across Europe and other regions, and the future vision for this industry is gigantic. But starting locally, in the US, even a new CBD brand with a realistic vision of targeting just 0.02% of those who are current consumers, would mean selling 3900 units of CBD monthly via a combination of online storefronts. The chronic illness segment of the market will eventually drift upwards to the point where more potent CBD products are bought closer to the $100 mark, as opposed to bargain hunting for inferior products. The moment consumers understand that spending more on the right strength of CBD means avoiding the cheapest lowest strength products, a brand is looking at 3900 units X $35 profit – which is $139K per month. Affiliates who seek an even less complicated business model could look at 3900 units X $15 – which is closer to the $55K/month target.

But as Alt said: “Naturally, each business owner will have their own targets and will invest efforts accordingly. Some will prefer an easy model such as affiliate marketing, others will want to put up several storefronts and shopping sites to drive higher profits and a more direct relationship with their clients. We are here to support every business model, whatever the entrepreneur chooses”.

Comparing industries:

Many affiliate marketers in the “evergreen” health segment understand that customer lifetime value is the key to success. This is because they earn recurring commissions from people who make continued use of high-quality natural products for years. When you think of other industries such as betting, forex, insurance and wealth management that also pay rather high commissions, the fact is that an evergreen product like CBD will yield the same revenue if not more. The key difference, is that it is something the affiliate can feel truly good about. With health ministers, doctors and researchers all endorsing CBD these days, there is hardly an affiliate product which carries more credibility – and credibility sells. A key benefit of the evergreen market, is that information has a long lifespan, so investments in content and marketing, can easily be used for the next 15 years. It makes a strong case for those who enter a business with a long-term plan of building equity. Alt mentioned the following: “There are those retailers and CBD brands who seek to satisfy clients with high-value products and earn a substantial monthly income – but there are also those who look towards the IPO market, to take companies public: both face an incredible opportunity of a lifetime, thanks to the longer term trends that support the industry”.

Selling high-quality CBD is the only way the industry will grow:

We face much more than ethical consumerism in the CBD market: It is a once in a lifetime opportunity where consumers and their Doctors will make a decision: They could find that the quality of products they bought will lead to a new, better way of managing illnesses going forward. However they can also stop using it if quality is inferior leading to poor results. As Sam Conley, the COO at Kushly.com said: “We only deliver the highest quality CBD products produced from fully audited, FDA and US Hemp Authority certified farms. We actually exceed FSMA, standards.”

Conclusion:

New legislation, coupled with strong demand to combat chronic illnesses led to the rapid establishment of a very notable trend in ecommerce and health, the same applies to physical retail locations. As with many industries, participation can come from both smaller fast-moving players and larger entities. This comes in the form of CBD affiliate agreements or new brands who rely on CBD white-label options. Those who focus on the highest quality products have the biggest chance at establishing long-term relationships with consumers.

 

Sources:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3202504/

Virginia Sagal

Virginia Sagal interviews CEO's from around the world and writes about Tech / Fintech / Medical and Tourism. She majored in business management, is a yoga instructor and world traveller. She cares about sustainability, environmental issues an ethical consumerism.
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