If you do a quick Google, you’ll see that there are hundreds, if not thousands of CBD and hemp stores that use Shopify sell their products, which is great. But then the CBD Facebook groups that I’m a part of are constantly flooded with the experiences from CBD store owners who’ve had their Shopify stores shut down and banned overnight with no warnings and no explanations.
So, what’s going on? As often seems to be the case, things get a bit more complicated with CBD in the equation. I’ll start from the beginning, explain what Shopify is, look at WordPress in comparison, and go from there…
What is Shopify?
Shopify is an ecommerce platform that gives you everything you need to start, grow, and manage a business online. It’s a simple way to create an online store that can be customised to allow you to sell in multiple places including the web, on mobile, through social media and online marketplaces, at brick-and-mortar locations and even pop-up shops.
Shopify makes it simple to manage products, inventory, payments, and shipping and they take all the hassle out of hosting (which they do themselves) so that you have the flexibility to run your business from anywhere that has an internet connection. You can even use your own domain name that you connect to Shopify from your store’s admin, and if you don’t have one yet, you can buy it through Shopify.
In short, they make everything really, really simple so even if you have no experience selling online, you can get set up in very little time. There’s no coding; no development needed – it really is plug and play.
Pros for CBD Sellers
- It’s really quick to launch. You won’t need a developer to help get your business online as Shopify includes web hosting, store themes, and easy to integrate features (such as coupon codes, SSL certification, SEO and inventory tracking.
- Plans are customized. As you grow, they’ll scale with you from start-up to enterprise-level solutions.
- Canada-based. Shopify is based in Canada and is therefore not subject to US federal law.
- Used by the Canadian government for online cannabis sales. Shopify is the Ecommerce platform used by the Canadian government in British Columbia, Newfoundland and Labrador, Ontario and Prince Edward Island.
- It sounds almost too good to be true, right? So let’s have a quick look at the cons…
Cons for CBD Sellers
Shopify itself is CBD-friendly, but many of the payment gateway options that it offers are not (including PayPal and Stripe). This is because cannabis-related transactions are labeled as ‘high risk’ in the US, where CBD is associated with marijuana, which is illegal in most states.
- Transaction fees. Shopify takes up to 2.9% of each sale and $0.30 per credit card transactions. If you’re selling hemp-related products, there’s no way to get around these fees as “Shopify Payments” (powered by Stripe) is not available.
- Lower conversion rates. If you sell CBD products, you will have to create redirects at checkout to a CBD-friendly payment processor.
- Customisations. To get around the payment processor issues, you may have to integrate a custom gateway which will require specialist development.
- You are not in control of your own site. As has been the case for many Shopify sellers, the company can close down your site at any time and often don’t give warnings. You are also subject to their results and regulations related to products and payment gateways, which are subject to change without notice, and you’re locked-in to their subscription-based pricing.
How is Shopify Different to WordPress?
The key difference is that Shopify is an online service solely focused on Ecommerce, whereas WordPress is stand-alone software that you need to install yourself and can be used for many different applications (one of which is Ecommerce).
Getting started with Shopify is simple – just pop over to Shopify.com, sign up to create your account, follow their quick setup process and before you know it, you’re ready to start selling. If any issues come up, you can chat with their support who will help you to solve them.
In comparison, if you want to use WordPress as an Ecommerce platform, there are quite a few more steps:
- Buy a domain, sign up for hosting, and install a default WordPress version.
- Buy a theme, then install plugins to handle SEO, social media integrations, and more.
- Install WooCommerce for Ecommerce functionality (this is not built into WordPress)
- Configure your Ecommerce store including store details, payment gateway integration, and products.
And there’s no support – you’ll need to get a website designer to help you if you get stuck at any point in the process.
Shopify is a bit like buying a ready-made meal – just pop it in the microwave, and you’re good to go. WordPress is more like preparing a meal from scratch. You buy all the ingredients, chop them up, follow the recipe and a couple of hours later your meal is ready to be served. Both options have their place, but in the long term, you’re probably better off having healthy home-cooked meals (or your own WordPress site that you have complete control over!)
What are the Potential Issues for CBD Store Owners Using Shopify?
The two main issues are 1) payment gateways and 2) control.
This isn’t really Shopify; it’s your payment processor.
Shopify looks at where your business is based and whether CBD sales are legal there (this includes a provision in your Terms and Conditions that states that you only deliver to places where CBD is legal). If you don’t take these steps, your store will be closed by Shopify.
But the main issue is actually the payment processor. Shopify’s default payment merchant is “Shopify Payments,” which is underwritten by Stripe. But Stripe, being US-based, does not support the processing of CBD products and therefore cannot be used.
The alternative is to integrate a different payment processor, but as of May 15th, 2019 Shopify has started informing CBD clients that they need to upgrade to Shopify Plus to embed API code into their website for different payment gateways. And the price tag? $299 per month!
Who Owns Your Site
CBD is already a ‘high-risk’ product subject to much more scrutiny than, say, bracelets or t-shirts. So, it might not make sense to set up your shop, populate your products and integrate a third-party payment processor only to have your store shut down. Because Shopify provides the hosting they have, essentially, full control over your site, including the ability to decide if it can stay live or needs to be shut down.
Quick Summary (In Case You’ve Just Scrolled Down to the End!)
If you’re starting out and are deciding between Shopify or WordPress with WooCommerce, make sure that you’ve got the key points from this article:
- Shopify is a plug-and-play solution, so it’s much quicker and cheaper to get started
- BUT! You’ll need to integrate a third-party payment gateway which could be costly both in terms of hiring a developer and the need to upgrade to Shopify Plus for $299 per month.
- AND! You don’t have full control of your site, Shopify hosts your site, and they can shut it down at any time, without warning.