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In the United States, over 10 million people vape regularly. Globally, the vaping market is forecast to reach $48 billion by 2023.
Evidently, vaping is getting more popular by the day.
As an entrepreneur, what rings in your mind when you see such exciting statistics? Opportunity, right? Well, there couldn’t be a better time to start a vaping business than now.
Ready to cash in on the trend?
In this article, we’re sharing a complete guide to starting a vape shop that will turn a tidy profit. Keep reading!
Understand the Vaping Marketplace
Just because vaping is a growing trend doesn’t necessarily mean every vape shop is making a killing. Some are running into losses and closing shop. This is why you must research and understand the dynamics of the e-cig marketplace in your state or county.
Find out the number of vapers in your local area and the reasons why they vape. Even though vaping is generally surging in popularity across the country, there are areas where uptake has been slow. You don’t want to start a vape shop in a location with poor demand. To help with your marketplace research, you can use a distance Radius Map tool to help determine franchising opportunities around a given area. You will be able to quickly decipher if there are some overlaps between your business and indirect competitors so you can decide on the best location for your new vape shop.
Next, establish the demographics of the vapers in your target market. To do this, answer the following questions:
- What’s the percentage of male and female vapers?
- What’s the average age of vapers?
- What’s their annual household income?
- What are the hobbies/interests?
This information will help you create a detailed buyer persona for your vape shop.
Lastly, how competitive is the local market?
If vaping has already caught on, it’s likely there’s a strong presence of established shops. Assess whether you’ll be able to break into the market and grab a substantial consumer share before launching your shop.
Assess How Local Regulations Affect Vaping Businesses
As vaping popularity increases, so do the number of laws regulating it. While the sale of vaping products to minors is federally prohibited, several states are also stepping in to regulate vaping in public spaces and workplaces. There are also laws surrounding vape marketing and advertising.
With this in mind, it’s crucial to understand how relevant laws affect vaping businesses in your location. Before starting your shop, consider the ease of acquiring the required business permits and licenses.
You also want to factor in the possibility and impact of future regulatory changes. What does the future of e-cigarettes look like given the increasing vaping restrictions?
If the future looks uncertain, play your cards right. Cash in on the trend, sure, but don’t put all your eggs in a shaky industry.
Choose a Business Model
So, you’ve decided the market is ripe for your vape shop. The next step is to choose the business model you want to operate.
Here are your options:
- Start a brick and mortar shop from scratch
- Buy a vaping franchise
- Open a web-based vape shop
- Run a brick and mortar with an e-commerce site.
All models have their pros and cons, but your choice will depend on market conditions and your specific circumstances.
For example, if the market you want to enter is highly competitive, a new brick and mortar store might not be able to shake off the competition. The best option is to buy a popular franchise. However, you’ll need a lot more money to acquire a franchise than start a new shop from scratch.
Whatever model you choose, it’s vital to ensure it has an e-commerce element. More than 55 percent of all vapers buy vaping products online.
Secure Adequate Financing
How would you like to fund the business?
Most vape shop owners dig into their own pockets but don’t lose hope if you can’t raise the amount on your own. You could pitch the plan to some of your relatives and friends, especially those who are vaping aficionados, and ask them to loan you the money or come on board as partners.
You could also go in for a business loan, but be warned this isn’t a recommended path for vape shop entrepreneurs. Because of the regulations and uncertainty around vaping, most lenders consider vape shops highly risky. If you’re lucky enough to get a loan, expect to be slapped with higher than average interest rates.
Nonetheless, don’t make the mistake of starting your vape shop without adequate capital at hand. You don’t want to run out of cash before your shop breaks even and becomes profitable.
Set Up Shop and Stock Up
Armed with capital, it’s time to bring your idea to life. Lease a commercial space and/or build an e-commerce site – depending on your model – and then stock up.
You’ll need to stock a variety of vaporizers and other vaping hardware, including vape coils, tanks, batteries, and battery charges. Of course, e-liquids and vape juices cannot miss from your shelves.
Before purchasing these items, identify the best-selling brands, and then shop around to find manufacturers or wholesalers offering the best prices. The secret to increasing your retail margin is to buy low, not overpricing.
You can also consider making your own e-juices. Read this great resource by Vaporescence to learn more about how to DIY e-juices.
Promote Your Business
Whether you’re selling online or off, you need a solid branding and digital marketing strategy.
Start by crafting a catchy logo and tagline for your vape shop. If you know little about graphic design, hire a designer to help.
Next, set up a blog and create business pages on Facebook, Instagram, Twitter and any other social platform that appeals to your target market. Be creative with your posts and engage with your followers.
These are free/organic ways to promote your shop, but nothing stops you from spending money on search engine and social media ads.
Starting a Vape Shop Made Easy!
Vaping is trending right now and most quick-thinking entrepreneurs are already making a profit. It’s not too late to join in on the trend and make money too.
Even better, you’ll not be jumping in blindly. We’ve fleshed out what starting a vape shop takes, so you know the mistakes to avoid and what to do right.
All the best and feel free to explore our site for more business insights.
