Wholesale Cannabis Marketplaces – The Good, Bad and Ugly

The theme to Sergio Leone’s classic The Good, the Bad and the Ugly is almost as irresistible as a hot bath and a shave after weeks of drifting on the high plains. For some, that whistle is practically a siren song. The allure of an open wholesale cannabis marketplace can be just as appealing, with its promises of price, selection, hungry buyers and eager sellers.

The Good
Step right up. We have the cure to all that ails you, partner. The idea is simple – a lot of producers post their products and the buyers stampede on in to fill their saddlebags. That works mighty fine on sites like Alibaba or on the B2C side at Amazon. However, Alibaba and Amazon are the peak examples of the model. They have corralled loads of sellers and buyers and have rounded up enough power to demand that sellers offer low prices. This keeps the buyers coming back.

The Bad
Flip your poncho over your shoulder and chew on this cigar. The examples of Alibaba and Amazon highlight two key issues for the growing cannabis market. First, there is no single marketplace that has wrangled the majority of buyers and sellers. You find quite a bit of fragmentation across numerous platforms, so the dream of being able to go to one website to post your products or shop everything available in your state doesn’t really exist. Further, these various marketplace platforms can come and go faster than you can say Lee Van Cleef. On the other hand, if one single open marketplace rises to the top, they may start driving prices down as Amazon has done. Great for buyers in the short run, but where does that leave sellers.

The Ugly
Bring a fist full of dollars and a few dollars more. Sellers have been known to use these open marketplaces as dumping grounds for old or inferior product. Plus, sellers who have premium products and price them accordingly can look over priced when compared side-by-side to the budget product that often dominates the these marketplaces. What’s more, products are often posted at inflated prices and inventory isn’t up to date. This leads to misrepresented products, order refusals, additional fees,  payment disputes and a host of other problems. Beyond that, sellers can lose long-time customers as buyers chase the promises of price on potency on the open market. And lastly, the idea of one-price-fits-all just isn’t really designed for the way most producers do business. Any or all of these issues can create bad blood in newly developing relationships. None of these are what you want or need when trying to build your company in an already challenging industry.

So, what might Clint Eastwood do when faced with a situation like this? He’d probably gun down all of ’em in a blaze of glory. But, this ain’t the old west and since we don’t have that option, it might be best to tread lightly or avoid open marketplaces altogether. Russel yourself up some dependable inventory, order and relationship management tools like we have at Apex Trading. Earn new customers or find new products on our secure, vendor marketplace. Wholesale cannabis doesn’t have to be the wild west.