A whopping 1.3 billion people use tobacco worldwide. Statistics show that 70% of that number desire or attempt to quit.
In the last decade, the use of vapes has increased rapidly. Over 82 million people now use vaping as a safer alternative to smoking. Though a good proportion routinely vapes for recreation, smoking cessation remains the principal reason people vape. Vaping has gone from being a fad to a mainstream culture that is here to stay.
Little wonder, the vape industry’s market heads to $40 billion by 2023 and $61 billion by 2025. Getting a piece of the burgeoning vape industry pie while helping a pool of smokers quit their habits sounds like a perfect business idea with excellent revenue potential. Tapping from the years of experience of established vape shops like Provape, and the economic principle of demand, opening a vape shop can be a profitable opportunity to explore for business-minded people. Here is a guide for entrepreneurs to get everything right when starting a vape shop.
Create a Comprehensive Business Plan
For any business, a plan serves as a guide to achieving your business goals, including how to go about it, getting funding, and staying on track. Every entrepreneur knows a solid business plan is a no-brainer when starting a new business. It is even more so for the vaping industry, which is relatively new. Besides the obvious, like choosing a business name, structures, branding, and funding, writing a perfect business plan for your vape shop needs extra effort and research.
Regulations can be tricky
The vaping industry is highly controversial, and regulations can be tricky. Sometimes, taxes for this industry can be on the high side and weigh heavily on a startup business on a budget. Learning about different rules and taxes levied by local, state, and the federal government needs to be a priority when writing your business plan.
Your business plan should be detailed enough to enumerate these challenges and the steps to overcome them. Some vape stores already have the early bird advantage. It is wise to properly gauge your competition and determine the demand in your proposed location.
Obtain Relevant Local, State, and Federal Licenses
Registering your vape business is the first logical step. The procedure and cost of securing business licenses and permits vary from place to place. Whether selling in a physical store or online, authorities categorize vape stores as tobacco product retailers. Therefore, many regulators require vape stores to obtain the same permits and pay the same taxes as tobacco retailers.
Since the federal regulations concerning vaping are more publicized, you must first familiarize yourself with regulations at the local and state levels. Some states tax vaping stores, while others do not have a tax policy for these businesses, or at least yet. Like other adult-related stores, age regulation is another critical point, requiring that your business set a policy to handle age-restrictions. Flaunting the age policy rules and selling to minors often comes with heavy sanctions or fines you instead wish to avoid.
There is no running away from different laws and regulations regarding vaping in your business host community. Some states, cities, or towns prohibit establishing a tobacco or e-cigarette store within a specified distance from public services, religious centers, or schools. Good knowledge of all this information aids you in setting up a proper tax, age policy, and an appropriate location for your vape store.
Secure an Appropriate Location for a Vape Store
Location plays a crucial role in the success of any physical-based store. If you plan to sell vapes from a physical site rather than online, your choice of location is best considered at a retail zone with plenty of traffic. Get your products in the eyes of as many people as possible to boost the chances of your business. Most vape stores making great sales are strategically located in public places or leverage businesses like busy malls with a guaranteed flow of shoppers.
A good model we notice for vape stores is that of a convenience store; in fact, you might have noticed several vape shops have branched out into other merchandise as well. We can name at least one store that sells the adult trifecta of alcohol, tobacco, and vapes.
High-traffic areas are likely to have convenience stores selling vapes. Before leasing a vape shop, ensure the location is optimal. Carry out competitive analysis to identify your competitors in the area and your chances against them. Setting up at trade shows, fairs, festivals, and other relevant local sales events may also produce good brand marketing results.
Find Reliable Suppliers
Ideally, getting all your vape products from a supplier makes your life easier. However, that is not sound for your vaping store. A hitch in your supply line can put your business at a standstill. Partnering with several wholesalers with good track records and products helps keep your inventory always fresh and your customers happy.
You of course want to have the widest selection possible to meet demand. Strive to have various vapes of different Propylene Glycol and Vegetable Glycerine portions (PG/VG ratios) and popular flavors. Stocking vaping accessories such as battery chargers, replacement cards, vape batteries, vape juice, and other hardware yields more sales and profits.
White labeling vape products might be worth considering when sourcing for products. With this option, you, as a vape store owner, can put your brand and label on someone else’s vape products. That may not be feasible for someone just starting out and on budget; it is worth considering for future expansion.
Get Business Insurance
The types of insurance policy to go for depends on the business. Planning business is never complete without considering risks. A vaping store is generally considered a high-risk venture and likely to attract substantial insurance costs more than a regular retail business. However, factors like the cost of your inventory, projected revenue, equipment, and the value of your business determine the exact cost of your insurance.
General Liability can protect the financial well-being of your vape store if an accident or loss occurs. Commercial Property Insurance and Product Liability Insurance or Workers’ Comprehensive Insurance may be worth looking into, for more comprehensive coverage. In sum, look for a highly recommended local insurance agent or niche-specific insurance broker to guide you on the details and how best to protect your vaping store against loss.
Market and Build a Social Media Presence.
To stand out, you need to get creative with the branding and naming of your vaping store. When you strike a winning name or logo, protect it by filing necessary trademarks. This is very important in the era of so many counterfeit vapes flooding their way into the country.
Marketing the vape business online might be tricky and requires creativity, considering giants like Facebook and Google do not accept vape-related adverts. Building a solid social media presence and following a community of vapers remains an effective strategy to court the attention of new vapers and keep returning customers. You can also take advantage of services like Google My Business, which shows your address and phone numbers whenever someone within your location searches for the products. A GMB listing cannot be overemphasized; it is comparable to having a Yellow Pages listing back in the day.
Other ideas for content marketing and brand exposure:
- YouTube channels do wonders
- Offer a newsletter sign-up, perhaps with a discount incentive
- Have a blog just like this one, where you inform the public on vape matters
- Hold periodic contests and giveaways, working in conjunction with your suppliers
- Work in partnership with others in the industry to set up co-promotional deals
Wrapping it up
Setting up a successful vape store, whether online or physical, requires the determination to stick to the plan and clear every initial hurdle, while at the same time having the thick skin it takes to pioneer a new industry. When you get it right, the room for growth in the vaping industry, still in its infancy, is enormous. Putting this guide to work, your dream of starting a vape store becomes closer to reality.
Readers, feel free to share your entrepreneurial advice on starting up a vape shop, here in the comments or in our swag forum.
