Planting the Seed: How Amazon Fits into Your CBD Business

Blog Exchange

Matter’s blog exchange program brings you the latest marketing insights from top industry professionals. This month, we exchanged blogs with Amplio Digital. Our guest writer, Kevin Weiss, is the VP of Growth & Strategy has been with the company since 2014. Kevin drives growth for Amplio and strategy for clients. His team manages over $250MM in annual GMV on Amazon for brand manufacturers across North America and EMEA.

When disruption occurs in an industry, companies must race to secure market share in the evolving market. Depending on the placement and strength of a company’s footholds, it will maintain market share, gain market share or go out of business. And if you subscribe to the “grow or die” mantra, two out of the three options are to go out of business. With the passage of the Farm Bill this year, stating that any cannabinoid that is derived from hemp and adheres to regulations will be legal, it’s no surprise that CBD companies have been racing to capture those market shares.

One of the logical battlegrounds for CBD businesses is Amazon. With more sales than the next 12 largest eCommerce websites combined, Amazon offers tremendous upside for companies who can successfully carve out a strong differentiation on its platform. But unlike the Farm Bill, which clearly established legality for the manufacture and sale of hemp-derived CBD, major tech companies like Amazon, Google and Facebook have not followed suit.

In fact, Amazon’s policy as of November 1, 2019 towards CBD is crystal clear:

Not only is cannabidiol specifically prohibited, but supposedly the loosely connected wordings of CBD are also prohibited. For some CBD business owners, they abide by Amazon’s rules by not selling on Amazon, but they are paying close attention to see when the policy will be updated or removed altogether. For others, they’re tired of seeing the inconsistency between Amazon’s policies and the enforcement of those policies and have decided to test the waters for themselves.

 

Should You, or Shouldn’t You?

My general rule of thumb is that if you have a CBD business with sales channels that are growing without the help of Amazon, you should stay off Amazon until the policy changes. But, if you have a CBD business that is still racing to capture a foothold, Amazon should be one of your top 2-3 sales channels to pursue. I wrote a helpful article on the risk/reward of selling CBD on Amazon recently, which outlines some of the questions you should ask yourself, as well as a perspective on why Amazon still prohibits the sale of CBD on its platform.

If you do decide to sell CBD on Amazon under the current policies, you will need to obfuscate the presence of CBD in your products by omitting it from your listing. That includes removing “cannabidiol” or “CBD” from the product title, bullet points, description, images and product videos. For most brands, this necessitates change in packaging as well as a moment to reflect on your core values. If you’re a brand that prides itself on transparency as a major selling proposition or company core value, you might be turned off altogether from the process of obfuscating your product to sell on Amazon.

Once you do start selling CBD on Amazon, you will need to immediately “git gud” at selling on Amazon. At Amplio Digital, an Amazon marketing agency, we have experience in 12 GL’s (i.e., categories) on Amazon, including deep work in some of the most aggressive categories like mattresses, supplements, cell phone cases and hydration. We know firsthand that aggressive categories run rampant with black hat tactics. That means you should expect to stave off other sellers from:

  • Leaving [fake] negative reviews of your product
  • Sending complaints to Seller Performance about your brand
  • Reporting issues to Community Content to get your page delisted
  • Hijacking your listing contributions and/or buy box

And all of the above listed expectations amplify if you are ascending the Best Seller Ranks quickly. In short, listing products on Amazon does not necessarily result in selling millions of dollars on Amazon.

While there isn’t one path forward that works for all CBD companies deciding whether or not to sell on Amazon, there is one thing for sure: You’ll have to work at it. This means adapting to the changing landscape, adhering to Amazon’s rules and regulations, and ensuring every product is “retail ready”. It can be done successfully but requires spending time and money to carve out and maintain your foothold.

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Blog Exchange

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