Before opening a store specialized in CBD products, you must necessarily carry out a market study. This study aims to promote CBD product and inform you of the global market situation. In addition, the data resulting from this study will allow you to develop good strategies for the development of your CBD store. Similarly, you can collect figures from the CBD market with this study.
How to study the competing CBD stores
Once you done the study of the demand, you must analyze the competition. This process is important to determine if the market has enough potential to be exploited. Next, you need to list your potential competitors and find as much information as possible about them.
What types of CBD do they sell? What is the turnover of each competing store in addition to its market share? What factors prompt consumers to buy CBD products with them? Once this data is listed, you will be able to assess the intensity of the competition and, above all, you will be able to determine if the market allows the establishment of a new CBD store.
However, since this is still a new industry, this should not be the case.
Segmentation is a very important concept in marketing.
This Cannabis and CBD advertising technique involves dividing your consumer targets into various groups. This continues to be essential to get to know your audience better and, thus, offers you products and adequate communication. To segment your market, you must form groups of customers who share the same consumption habits and purchasing profiles.
For example, you can group together 25-35 year old men who buy CBD twice a month for its recreational properties. Although there are numerous segmentation criteria, age, consumption habits, income, and gender are the most used in market studies.
How long does it take to make a CBD shop profitable?
Three parameters should be considered when looking for the profitability of a CBD Brand online sales activity:
- The initial budget
- The turnover generated by the sale of the CBD products
- The net margin rate obtained
For example, let us take the case of a store of CBD with an initial budget of 2 million dollars. Let us also consider that the CBD store will generate around 4 million dollars in turnover. Your net margin rate, here, is 18%. Therefore, the sale of CBD products will provide annual profits of around 18% x 4,000,000 = 720,000 dollars. Thus, 2,000,000 / 720,000 = 2.8 years will be needed to recover your initial expenses.
