Understand the Benefits and Risks Before Opening a Vape ShopVapor shops are a fast-growing small business trend where personal service is key.
Maybe you’ve seen a vapor shop – vape, for short – pop up in your neighborhood, or you’ve been curious about all the people walking the streets, blowing smoke from tiny vaporizers.
Vape shops are a rapidly growing sector of small business. Many smokers are switching from traditional cigarettes to vaporizers and smokable liquids. If you want to get in on the burgeoning vape shop trend, there are a few basics to keep in mind. As Bonnie Herzog of Wells Fargo Securities noted at the end of 2014, “Vapor consumption could surpass combustible cigs in 10 years.”
1. Know your market and product
This is a tenet of opening any small business, but in this small market it’s especially important to open in a location that isn’t already being served. Spike Babaian – an e-cig advocate since 2009 and founder of Vapefest – opened VapeNY in 2011. Her shop was the first e-cig store in New York City. She now runs three locations.
“The majority of e-cig shops don’t market because we don’t need to, especially in New York,” she tells NCR Silver. “There’s not much competition, like there is in California. Marketing is not as relevant as word of mouth.”
E-cigarettes are also now available in supermarkets and at gas stations, so customers need a reason to shop at your vape store. This requires you to be up on the latest trends and regulations in liquid nicotine, innovations in vaporizers, and what inspires people to move toward e-cigarettes over traditional cigarettes.
If someone is coming into a vape shop over purchasing online or at a supermarket, it’s because they’re seeking expert advice to ensure that they’re spending their money well.
2. Manage Inventory
A good tablet-based point-of-sale system will track your inventory, which, in a vape shop, can be substantial.
While stocking vaporizers themselves is comparable to selling other types of goods, e-liquids come in a vast number of strengths and flavors. To build customer loyalty, you want to make sure you’ve regularly got favorites in stock. Your customer base will likely have wildly different tastes from person to person, so it will prove a challenge to keep everyone happy. A great point-of-sale system will manage that for you, and also offer marketing tools like a loyalty program that will keep customers coming back to you for their vaping needs.
3. Understand the risk
While vape shops are a growing sector of small business, it’s also a very new and potentially risky one.
Banks are hesitant to give out loans to vape shop owners. And on May 5, 2016, the Food and Drug Administration announced it will regulate all tobacco products, including e-cigarettes. That change will have far-reaching implications for vape shop owners. It will limit where you can advertise your vaping business, noted Norm Bour, an advisor to the vape and e-cigarette industry and founder of Vape Mentors, a consultancy focused on the e-cigarette industry. “It will also affect packaging, online sales, flavoring and more,” said Bour.
If you choose to move forward, though, it’s wise to pay close attention to minute details that could help keep costs reigned in. Choose a POS system that will integrate with accounting software, keep track of employee hours, manage inventory, and doesn’t take a huge cut from your profits. Use Facebook and other social media for effective and engaging marketing. There are ways to go very DIY in your vape shop venture and carve out a niche in new communities that aren’t yet being served.