How To Open A Vape Shop
Are you an entrepreneur wondering how to open a vape shop? Your timing could not be better. Perhaps you have seen a lot of vape shops in your area and may be thinking the niche is already saturated. Well, maybe this will change your mind.
Wells-Fargo analyst Bonnie Herzog has been tracking the vapor industry for several years. She is the industry’s go-to resource for business forecasts. Her latest analysis indicates an expectation that the vapor industry is going to double in the next three years.
It is not too late to get into the game. The industry is both stable and steadily growing. FDA regulations of e-cigs may be changing toward a more open posture. If that happens, the growth could be even bigger.
Table Of Contents
- Vaping Franchise or Open Your Own Vape Shop
- Where To Get Vape Shop Inventory
- Watch Out For Snake Oil
- How To Choose A Vape Shop Location
- Hiring Vape Store Employees
- Watch Your MarkUps
- How to open a vape shop and get a boost from social media
- Vape Shop Websites and E-commerce
- The Last Step To Opening A Vape Shop
Vaping Franchise or Open Your Own Vape Shop
There are two roads to opening a vape shop. If you have sufficient financing, you could opt for the vaping franchise model. That has pros and cons. The pros are that you get a ready-made business model, they show you how to open a vape shop, marketing assistance, and brand recognition. The cons include extra costs and less control.
The other option is your own independent vaping store entirely under your control. You build your own brand and reputation choosing your own product inventory and control marketing. Who knows, maybe someday you’ll be selling franchises of your shop. Why not think big?
Federal, State, and Local Vaping Regulation
Before you can get into the physical details of how to start a vape shop, you need to know the rules. The federal regulations are pretty straightforward. It is the state and local regulations that vary from state to state and city to city. For example, there are current laws in some cities that state you can’t open a vape shop near a school or park. In fact, many cities across the country are considering similar regulation.
One of the most significant considerations when thinking about how to open a vape shop is the level of taxation in your area. Some states have excessive taxation levels that have rendered brick and mortar vape shops at a disadvantage to compete at all with online prices. Ultimately, you will have to do some homework to understand the laws and regulations that apply to your chosen location.
Financing A Vape Shop
You are going to need access to capital and financing. If you go the franchise route, you will need to have money on hand and prove that you have access to $100 K or more. An independent vape shop can have lower startup costs, but you will be building a business from scratch.
If you don’t have enough capital to open a vaping franchise, that does not mean that your dream is over. Far from it. You might qualify for a subsidized SBA loan with your local bank. Or, if you have good credit and access to $15,000 in capital, you may qualify for financing from Ventury Capital, a company that has helped launch several vape shops. There are examples out there of people starting a vape shop with as little as $25,000. If you go the independent route, all you need is a business license, tax ID, location, POS system, and some inventory to get started.
Take some time and explore all of your financing options. You don’t want financing payments to eat up all of your profits when you are starting out. If you are building a vape shop business from scratch, it is likely that in the initial phase you will need all the cash flow possible to re-invest in inventory and promotion.
Where To Get Vape Shop Inventory
You might think that if you buy directly from the manufacturer in China you’ll be cutting out the distributor’s share and getting a better price. I can save you the effort right now. You will not get the best price buying directly from the overseas manufacturer. Unless you buy in massive quantities, your best price on authentic product will come from the large vaping wholesale distributors. Especially for hardware.
At a minimum, you will want to carry the following products:
- Hardware including mods, tanks, and starter kits
- Replacement coils
- Vape batteries
- Battery chargers
One example of an excellent wholesale distributor is Direct Vapor. They have a massive selection of hardware and vape juice lines. You will also see a large selection of regularly purchased items like vape batteries and replacement coils. Direct Vapor is a verified dealer for the leading imported vapor hardware as well as carrying in the range of 40 of the top e-liquid brands in the United States. You can manage your orders online. They ship fast and Direct Vapor has a low price guarantee.
Watch Out For Snake Oil
Once you open a vape shop and your name gets out there, you will start getting a whole lot of emails from no-name overseas manufacturers offering unbelievable wholesale prices. If the prices are unbelievable, don’t believe them. You are probably dealing with fake e-cigs. Your best bet for customer satisfaction is to work with authorized distributors selling authentic product.
Some of the counterfeit manufacturers will tell you they are selling “1:1 clones, just like the real thing”. If you want to take the risk that’s up to you. If you do decide to sell clones for lower prices, make sure your customers are aware they are getting a clone. If your customer does not know they are buying a clone, they will find out when they go home and check the authenticity code on their purchase. If they feel like you pulled one over on them, that could hurt the reputation of your vape store.
With that, we have given a rundown of some of the basics of how to open a vape shop. Based on information gathered from successful vape shop owners, we have put together a list of six steps to success.
How To Choose A Vape Shop Location
The first step in how to open a vape shop is actually three steps in one. Location, location, location! You have heard this before, and just as it is true for real estate, it is right for a retail business. How to identify that location will require market research. You’ll have to do some homework on this one. You will also have to make sure that your location meets the local state and municipal regulatory requirements. Those may vary significantly by state and city. If you are familiar with the area you have picked out, all the better
I spoke to some successful vape shop owners about how they chose a location. They reported that accessibility and visibility were crucial elements. You want people to be able to easily find you and for people driving by to recognize your business readily. Make sure you have clear, visible signage. One of the recommendations is a corner vape shop location that can be approached from two directions.
After you have the physical location selected, you then want to focus on how you present the location. An open, well lit, and comfortable space tends to be more inviting for walk-in customers.
Hiring Vape Store Employees
Your employees can make or break your business. It is very important that your staff be knowledgeable about vaping and the products. It is imperative that they know the rules and never sell to minors. No exceptions. Regulators are watching.
You want your staff members to be able to communicate with experienced vaping aficionados as well as someone who may be walking into a vape store for the first time. If possible, seek out employees who know and love vaping. Inexperienced staff should be trained thoroughly. All staff should obviously be honest, service oriented, friendly, and approachable.
Stock A Wide Range Of Products
Vape shop owners surveyed report that carrying a wide range of products enables them to serve a broader customer base. You might even want to consider adding vaporizers to your repertoire. Obviously, no vape shop can stock every product from every brand! But when you are thinking about how to open a vape shop keep in mind that vapers come in all shapes and sizes.
There are newbies, flavor chasers, cloud chasers, MTL vapers, drippers, and squonkers. You might even want to think about vaporizers. The list goes on. If you get too specialized in one aspect of vaping, you may end up having to send customers elsewhere to get what they want.
Remember, you are also competing with online vendors who most often can sell products for prices that brick and mortar retailers can’t match. Your advantage is convenience and personal service. A big part of that convenience is that customers can get what they want when they want it. Ideally, from you!
Watch Your MarkUps
The vaping industry is known for having excellent margins for retailers. You can enjoy very healthy margins, but it is advised not to get too carried away. If you offer high-end premium products, also stock more affordable lines. Have a vape juice line people can buy for about $10 to go along with your premium lines. Bear in mind that you are competing with lower online prices. Don’t get carried away with markups. It could work against you. Plus competitive prices and excellent service will get you great Yelp reviews.