How I Finally Took That Leap And Started My Own Business In CBD
Hello! Who are you and what business did you start?
Hey everyone! My name is Trey Gilliam and I started CBD Solutions just over a year ago. I established this business because I saw the opportunity in the emerging CBD market and I really believe in the benefits that CBD can bring people.
My original product was bottles of flavored CBD oil, and these continue to be my most sold product. I offer two different flavors, with varying potencies of CBD. I currently sell my product online and in-person at different sales events like trade shows. I have wholesale accounts that buy from me to resell, and several local medical marijuana dispensaries carry my product. Today I’m averaging $7,000 gross monthly revenue.
What's your backstory and how did you come up with the idea?
At the time I started my business I was barely 20, not in school, and had been working random jobs while I figured out what I wanted to do.
Just get up every day and start. Even the tiniest amount of effort is still so much more than most people ever put into their grand ideas. You get out of it what you put in.
I did video game carries, which basically means people paid me to beat video game levels for them. I thought I wanted to be a skydiving instructor, so I got my skydiving license. Even though I’m not a skydiving instructor now, I am glad I got my license because that is still really fun. I was ready to put in the work required to be financially independent and become my own boss, I just had no idea what route I was going to take to get there.
In February of 2018, I started working at a local CBD chain to save up for a trip to Spain that I had planned for that summer. When I started at that chain they had only 2 locations and they now have 75. Seeing this growth and the quality of the product sold made me realize the strong future there is in the emerging market of CBD. I finally saved up enough cash, and working at $10/hr, it took a while, but I was able to go on the trip.
When I left for Spain I knew I was ready to start something of my own. Luckily that trip to Spain wasn’t your boring tour group around Barcelona while getting wasted on overpriced sangria. What I went to Spain for is the Camino de Santiago, a more than 500-mile hike that crosses the entirety of northern Spain, from the northeast border with France to the Atlantic ocean on the west coast. On this trip I spent 36 days, walking up to 27 miles per day, crossing mountain ranges before breakfast. Long-distance hiking has been known since ancient times to be one of the best forms of meditation. From this trip, I gained the clarity of mind and the confidence I needed to start my own CBD company when I got back.
In July of 2018 when I returned, I was motivated and ready to hit the ground running on my CBD business, metaphorically of course, physically I was still limping from walking 500 miles. I began putting in the work, I was really in the perfect place for starting to build my business.
Take us through the process of designing, prototyping, and manufacturing your first product.
In the early days of the company, I had to go through 3 different suppliers of the CBD isolate that I use to make my product trying to find one that sells in bulk, and has good quality and price. It was frustrating at the time, but I’m so happy that I took the time to find a supplier that can give me the quality and price that I need in order to get the best product for my customers. This was only stepping one in figuring out my production because then I started researching which oil I wanted to mix the isolate with in order to maximize bioavailability.
I had finally worked out all the issues in my initial production and I was on a roll! I started to individually bottle my product for the first time- and I realized that my tincture lids did not fit the bottles that I bought. I had to stop bottling, reorder a whole new case of bottles, and then I was finally able to get a product I was proud of into bottles.
I made my first label in Microsoft PowerPoint, mind you, I have no graphic design ability or artistic ability in general really. I honestly just had to play around with it, clicking back and forth from YouTube videos to PowerPoint to try techniques I was seeing.
I was so proud to have my product finished and perfected. I made 10 different flavors out of it, and I forced just about everyone I ever met to try them all.
Describe the process of launching the business.
The first thing I did was file for my LLC in early July. My company was now registered under the name CBD Solutions, I loved this name for my business because it conveyed what I think is really great about CBD, it provides solutions to problems and doesn’t just mask symptoms.
The [trade] show in Woodward was three days and I ended up doing $2,200 in sales. I was feeling much better, and I had earned back most of the money that I put in so far!
All was well and good until I started to search for a domain name matching my company name. Cbdsolutions.com was available if I wanted to pay $37,000 for it. Obviously that wasn’t an option for my week-old company. I ended up settling on iranoutofcbd.com which fits my personality and the vibe I wanted for my company. It’s kind of funny, but you definitely remember it.
At this point, I was still working at a local chain of CBD stores, and I used my money from there to save up to sell my products at my first ever trade show event. I ended up needing $400 for the booth rent at that show, $650 for my first order of CBD isolate to make products and $250 to buy all of the necessary things to set up my booth, like chairs, tables, and a couple of banners with my logo on them.
This was a huge investment for me at the time and an even bigger bet on myself. The show was in Livingston, Texas which was a seven-hour drive from where I live, and I remember cringing spending $75 in gas to get there on top of everything else I had already spent. I really needed this to work.
I was just so excited to do that first show. Sadly, it was a pretty small town and the event didn’t have a great turn out, so I only managed $700 in sales. This left me still about $700 in the hole. The long drive home had me feeling pretty discouraged, I was nearly completely out of money, and I had no idea how I could sustain this out of pocket working for $10 an hour. My mom called me while I was driving to tell me about a show she saw in Woodward, Oklahoma. I was skeptical and feeling pessimistic after that first bad show, but I also figured I had to try.
The show in Woodward was three days and I ended up doing $2,200 in sales. I was feeling much better, and I had earned back most of the money that I put in so far! Thanks for that tip, Mom!
Since launch, what has worked to attract and retain customers?
With a product like CBD, customers have a lot of questions and are looking for a personalized buying experience. In my local area, there are so many CBD companies that have just popped up, and consumers are overwhelmed. It’s important for me to differentiate my brand. It helps that I am selling mostly my product in person, so I am able to answer any concerns and misconceptions as there are many with this product.
Customers buy my CBD over another company’s because most of my customers have met and spoken with me at a show the first time they buy a product. I also provide a QR code on my labels that customers can scan and have access to third-party lab testing results that show the perfect safety and quality of each product.
I’m in a unique situation compared to many modern business starters in that I attract customers by meeting them and speaking with them face-to-face about my products at shows. This is great for me because meeting customers face-to-face is the main thing that keeps me motivated. This also allows me the opportunity to address their individual questions and concerns in a very personal way.
I’m very hands-on in my business, which is different than a lot of the people who are opening CBD stores. I take every opportunity that I have to go to craft shows/trade shows to be able to talk to people and teach them about CBD. Unlike some who just see the money in the product, I see the value of it for the customer as well and really believe in it. That being said I have a vast knowledge base on all things CBD which really impresses people since they’re used to having no information when buying online, or an apathetic teenage kid working in the CBD store.
My clientele tend to have specific problems that have bothered them for a long time; I help them figure out the best products to help with those problems.
I always let customers steer the conversation. I want to focus on the aspects that they want to know about. I also finalize sales by asking potential customers leading questions like, “How long have you been thinking about trying CBD?” Most people have thought about trying CBD for a while, so that’s a good jumping-off point to work towards a sale.
Customers tend to have questions about different potencies. I tell them that 500mg is great for day to day stress and anxiety. The 1000mg is perfect for helping with mild pain and sleep, because between 40-60 mg of CBD per day helps the brain produce its own melatonin. The 2500mg is ideal for more severe pain or anxiety.
I make sure to ask customers what problems they have that they are looking for CBD to fix because while you can’t cause any harm by taking take too much (it’s fat-soluble so your body will only absorb as much as it needs), it’s more cost-effective to buy a lower potency if you don’t need it to be as strong.
Not to sound arrogant, but the product retains customers itself. The bottom line is that the product works. Customers feel comfortable with my products’ effectiveness after their first order because they’ve used them enough to know that they work. They can feel confident that the highest quality standards are being upheld since I have each batch tested by a third-party lab. My prices are also lower than a lot of bigger CBD retailers are able to offer because I have better margins and I’m willing to do a lot more work myself to save on employee costs, so I can pass the savings onto my customers and wholesale clients.
My website is almost entirely used for re-orders from existing customers. I know more about CBD than SEO. Each bottle has the name of the site printed on the label so that customers can easily re-order. Rarely will people buy first online because it’s nearly impossible to differentiate one online CBD retailer from another if you haven’t spoken with someone from that retailer previously.
How are you doing today and what does the future look like?
Today business is great. From all my streams of income from this company, I average around $7,000 per month.
My margins are 75% for retail sales and 35% for wholesale accounts. I have several wholesale accounts now, which are great for me because I just make them the product and sell it to them unlabeled. It’s about as close as I can get to passive income at this point in the company. They buy from me because they want to sell CBD but don’t have the means to make their own CBD product, and they like the quality of my product. Then they label and market it as their own to sell at shows as I do.
Medical marijuana was recently legalized in the state of Oklahoma. This opened up the opportunity for me to approach medical marijuana dispensaries in the area to ask if they’d also like to carry CBD. My CBD Solutions products are now carried in nine local dispensaries. Like wholesale, this is another great source of income for me since it’s far more passive than selling at shows myself.
Recently I was the exclusive vendor of CBD at the Oklahoma City Home and Outdoor Living Show. It was my best show yet and a huge milestone for my business.
I still go to shows as the main source of my income. I try to do two shows per month. Shows are really a great tool for me right now, especially as I am planning to move the bulk of my operations down to Texas soon and open a brick-and-mortar store there. Selling at shows in Texas has proven to be really lucrative because the market is far less saturated. Customers at shows in Texas have expressed to me how happy they are to have someone knowledgeable about CBD to talk to and help them. Currently, the only option for buying CBD in many towns in Texas is online retailers which can be overwhelming to search through and impossible to know the quality of before you make a purchase.
I’ve been able to scope out several areas of Texas by selling at shows, and I’ve finally picked a great area to open my first store. I’m really excited about all of this, and my current goal for opening is January 2020. I’m especially excited about this because it will mean I can consistently connect with customers.
Through starting the business, have you learned anything particularly helpful or advantageous?
I’ve definitely learned to monitor my expenses better. I don’t regret overspending at the beginning because it’s better than not doing anything, and I did learn, but make sure your costs are only things that you absolutely need.
Know your market. I got into CBD at a great time when the hype was just starting to build. Sadly, my local market has become too saturated, so I’m moving down to Texas where there aren’t as many CBD stores yet so I can get a bigger portion of their market as it builds.
I’ve learned not to get discouraged when problems just keep coming. Every time you take a step forward you’ll learn about more things that you need to do. This is why you have to be motivated and passionate because the challenges can definitely feel never-ending.
I learned how necessary it is to enter the market at a good time. I entered at a good time, but ultimately I’m going to move to the CBD market in Texas because there, I’ll be entering the market at the absolute best time.
What platform/tools do you use for your business?
I built my website on Wix, and I’m really happy with the way it turned out. I’m still improving it as time goes on, but it has the natural feel that I wanted and all the functions the site needs to have.
I use Paypal for all of my online payments. It just simplifies things for me, and I trust the service. For my POS at shows I use Clover, and I’ll continue with it once I open up the store.
I use Photoshop and Canva to edit my logo or my labels. I’m really comfortable with using both of them at this point, so edits are fast and simple.
I use Instagram but I’m admittedly not the best with it. I posted more frequently for a while and tried to gain local followers that would likely be interested in CBD, but since I decided to move the store to Texas I’ve stopped. Once I get down there I’ll post more of the store, but it’s not my biggest priority since my target market is older people, who are not very involved on Instagram.
What have been the most influential books, podcasts, or other resources?
I’ve read a few biographies and advice books from some successful entrepreneurs. A favorite of mine is All In by Bill Green because he took his business from flea market tables to being bought by The Home Depot with revenues exceeding 1.8 billion USD.
For the most part, I read short online articles about specific business knowledge I’m lacking. This way I can spend more time actually working. I often search on YouTube or Google to figure out certain things like taxes or filing certain paperwork that I don’t know how to do since I didn’t go to school for this. It’s been pretty easy to learn as I go thanks to the internet.
Advice for other entrepreneurs who want to get started or are just starting out?
Just get up every day and start. Even the tiniest amount of effort is still so much more than most people ever put into their grand ideas. However, you will get out of it what you put in.
Know your market. I got into CBD at a great time when the hype was just starting to build. Sadly, my local market has become too saturated, so I’m moving down to Texas where there aren’t as many CBD stores yet so I can get a bigger portion of their market as it builds. Be flexible with location and modality of sales, and find a good time to enter the market.
Are you looking to hire for certain positions right now?
Currently, I manage things completely on my own. When I move everything down to Texas and open up the store there I’ll definitely hire a few people to work with me in the store. I’ll remain very hands-on, but it will be nice to have another set of hands when the work increases.
I’m always on the lookout for more people who want to sell my product wholesale, not that those people work for me, but I do have to recruit them as if they do. It’s tough to find people who are serious about selling CBD, but I make my business attractive to more people with my flexibility of order size and total customization in flavors, potencies, and carrier oils. I don’t have a strict minimum order size so that I can sell to people who are interested in selling CBD but want to start small.
Where can we go to learn more?
The company website iranoutofcbd.com
On Instagram @iranoutofcbd instagram.com/iranoutofcbd/
Hey! 👋 I'm Pat Walls, the founder of Starter Story.
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