Updated – April, 2020
This will just a be a short note today. I wanted to reply to an inquiry we received over the weekend from a customer who thinks we are “making the bucks” with the high price when you buy CBD Hemp Oil.
First, let me say I’m sorry that CBD Hemp Oil costs as much as it does. Its unfortunate that a natural product that is so needed by many has to cost as much as it does. First, let me say that over the past 7 years in the hemp CBD industry, we have seen so much evolution. The cost of CBD products is only one aspect that has greatly improved over this time period.
Initially, price point consideration was based upon the scarcity of the hemp used to create these amazing products. These operations, which are not ours, they are their own companies, have to process an extreme amount of hemp plant to get the CBD’s we require for our customers. Because hemp’s legal status was of concern to many, that kept a barrier to entry that was difficult for some to overcome.
How Is Cost Determined?
The manufacturer of the products have their costs to actually take raw CBD extracts and turn it into a palatable product that can be ingested, be that through edibles, vapes, drops, capsules, etc. The manufacturers typically have testing that has to be done on the raw CBD gel when they’re buying it to make sure its safe -AND- they have to have their products tested at various stages to ensure what they’re putting out is what the label actually claims. We represent the companies that do adhere to these stringent standards of testing, and are proud to work with these great organizations.
There are things like product insurance, health care, rent, payroll, taxes, and much more that goes into running and maintaining a business operation of this nature. The majority of products are now being made in the USA, and we are supporting American wages so that we can all live the American dream. We also support some European family farms through brands that purchase from them. We do not use brands whose hemp was grown in China. Period. From the toxic environment to the politics, we avoid this at all costs.
Finally, we the retailers invest up front in the inventory in bulk and mark it up appropriately to cover our costs and, hopefully, turn a profit. Most industries have retailers taking a 30-50% mark up, prior to operating costs, to cover their costs and leave a profit usually in the 10-15% range. There are even standard supplement brands that mark up their products up to 10 times the costs for things like melatonin, vitamin C, and more!
I can’t speak for other CBD Hemp Oil products, our typical markup is approx 30%. We run a very tight operation and are able to generate profits in the range of 6-8% when all is said and done.
I bring all this up so those who need CBD Hemp Oil products won’t feel as if they’re being unrightfully gouged. Wellspring CBD is truly here to help you get what they need to enjoy a decent quality of life.