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Posted: by Bronte

Open Up Shop Selling Tobacco Seeds, Equipment, and Ancillary Products

Growing tobacco has been a hobby for many consumers for years. There is the enjoyment of planting the seeds and then cultivating the tobacco and being able to use it in the end. For those who enjoy the taste of a rich cigarette or cigar growing their own tobacco is extremely rewarding. Other reasons why people choose to grow their own tobacco is due to health reasons. Homegrown tobacco products do not have many of the added chemicals that mass produced tobacco products have. After the initial cost of purchasing the seeds and equipment the grower is able to save on purchasing tobacco products. New generations are getting back into the do-it-yourself attitude and would love to be able to grow their own products.

Opening a Business Selling Seeds and Equipment

If you are contemplating opening your own business to supply tobacco seeds and equipment here are a few facts.

  • According to the CDC, in 2017 an estimated 34.3 million adults in the United States smoked cigarettes. This is not even counting those who smoke cigars and pipes.
  • The production of all tobacco products in the US is governed by the US Food and Drug Administration and the Bureau of Alcohol, Tobacco and Firearms. Neither of these governing bodies forbids homeowners from growing their own tobacco to be used for personal use. The quantity is not restricted by federal law, so homeowners who want to grow tobacco are not restricted by how much they are allowed to grow at a time.
  • As long as the homeowner is not selling tobacco or tobacco products, all is good. Once they sell they then become a marketer. It is not legal to sell any type of tobacco without following certain laws and paying taxes.
  • Growing tobacco is relatively easy and many enjoy the hobby.

tobacco plantOpening a business that provides seeds and equipment to those who want to grow and harvest their own tobacco can prove to be very profitable. With most of the tobacco in the United States being sold on large plantations there are those who want a healthier and more affordable option. This is where your business comes in.

Online Ancillary Products of Tobacco

With the internet now available to those who want to grow their own tobacco, your business has no boundaries. Having an eCommerce website allows customers from all over the globe to find your business and the products you have to offer.

There are a couple of things before you get rolling with your seed and equipment business.

What to Consider

  1. Selling online takes a website that is able to display your products, answer customer questions and offer payment options. Credit cards, checks, and even telephone payment methods through a virtual terminal may be used to purchase your products. This means that you will need a credit card processor for tobacco seeds and equipment to supply you with a high risk merchant account that will support your growing business. Finding online credit card processing may take longer than anticipated, so beginning your search early on will make your life easier.
  2. Know the local laws for selling these products in your area. Although you will be selling products online it is best to make sure you are following all of the laws and expectations.
  3. Choose your suppliers wisely. You want to have the best products to offer your customers. You want your customers to return to purchase more products from you.
  4. Research how you will advertise your business. Getting the word out in the beginning is crucial but it doesn’t need to break the bank. Establish your business online via SEO and content as well as on social media platforms. Asking your customers to write reviews is also a great way to advertise without it costing a lot of money.
  5. Consider the structure of your business. Will you sell items on their own or will you have an option for customers to subscribe to a continuity service. In this case, a subscription will add value to your current business and help retain customers for a longer period of time.

With so many things to consider, hashing all of these details before jumping in will make your business run smoother.

The Tobacco Industry is High Risk

When applying for a merchant account for your seed and equipment business you may be in for a surprise. The fact of the matter is that traditional banks consider this type of business high risk. The reasons for this include fraud, high chargeback rates, and the industry’s issues with legality.

plant equipmentAll types of online businesses deal with fraud much more often than traditional, brick-and-mortar businesses. It is easier for customers to get away with fraudulent activity behind the anonymity of the internet. Selling physical items also puts you at risk of chargebacks. If customers aren’t happy with the quality of your products, they may resort to requesting a refund through their bank. This is bad news for the merchant and may result in account pauses or closure. The legality portion of tobacco is mainly due to the strict laws concerning the sale of the plant itself. If you misstep, your business is in jeopardy which isn’t a good thing for anyone involved.

Get a Merchant Account for Tobaco Seed and Equipment Items

New business owners will turn to companies like Stripe or PayPal and open a merchant account. What happens in many cases is that the accounts get shut down without any warning or explanation. The reason this happens is because it is against the terms of service which is written in the fine print. But, it is possible to get a merchant account without the fear of being shutdown.

Opening a merchant account safely is possible with high risk merchant account specialists. These are the experts that are able to work with the leading banks on your behalf. The application process is not much different than with a traditional bank and can be completed online.

Once your merchant account is approved, you will be able to integrate a secure and PCI compliant virtual terminal.

When searching for high risk merchant account specialists be sure to choose a company that you can trust. Do not be afraid to ask questions. As a business owner you will want to make sure that you are able to concentrate on your business and not worry about processing your payments.