Vape Shops popping up like crazy...

[deltatwentyfive]

I understand this is probably not happening nationwide and even less so internationally, but it seems like there are vape Shops popping up like mad.

My question, which is only fueled by curiosity, is: "Are vape shops such a lucrative business model that it can sustain this amount of growth?"

I only have a very elementary understanding of economics and business, so I'm probably missing something, but damn... Maybe I'm in the wrong career field.

 

[rawr]

Hehe maybe, but its true. Also here in Europe there are so many new shops. Its nice to have all sorts of stuff with prices ranging from low to high, but i dont think that many of the new stores will survive on a long run. Its not just the products. Customer service is also very important and providing good and quality vape gear, not just "junk".

 

[Rickajho]

A lot of these enterprises aren't backed by much more than enthusiasm - which is not a great model for opening a small business - and they fail accordingly. It's akin to someone suddenly discovering they like to eat food and deciding that's all they need to know in order to open a restaurant.

You have the woodworkers who like it when they tinkered at building mods, but found out they didn't like it so much when they had to deal with the actual realities of turning their fun hobby into the stern reality of running a business - and actually providing product if they took money for it. Stuff like that happens too often. http://www.e-cigarette-forum.com/fo...x-claims-paid-products-not-being-shipped.html

Or the juice maker who decided he could undercut pricing on everyone and drove himself right out of business when he got flooded with so many orders he couldn't keep up with the demand - and also realized too late he was losing his shirt in the process. That one lasted about six months. http://www.e-cigarette-forum.com/fo...gh-quality-price-closed-145.html#post13447009

Etc etc etc...

 

[szot]

Supply and demand..Ecigs are here to stay and working as an alternative to analogs and saving people a ton of cash compared to real tobacco cigarettes...

will the shops sustain you ask..very easily..the demand now is everywhere...the markup is 500%-1000%...the shops all buy from china and then sell locally for 5x-10x more than they paid...example, 1300 ego battery in China =$5, sells for $25-$30 at most shops, that's a 500%-$600% markup..shops have low overhead, great profit margins , and a huge demand...this is a business now that cannot fail but is competitive..

 

[Shipmonster]

Hehe maybe, but its true. Also here in Europe there are so many new shops. Its nice to have all sorts of stuff with prices ranging from low to high, but i dont think that many of the new stores will survive on a long run. Its not just the products. Customer service is also very important and providing good and quality vape gear, not just "junk".

Agreed! I only go to shops that allow me to test drip on my DNA 30 and are nice to their customers. I've been to place that force you to test juice on their stupid e-pen.

Also, I just found a place a few hours away from me "Vermillion Vapors" and they test drip you on juice with nicotine so that you're not misslead as to the flavor / throat hit. Every other place only test 0nic. That is a place I will continue to go back to no matter what.

 

[SmokinRabbit]

A lot of these enterprises aren't backed by much more than enthusiasm - which is not a great model for opening a small business - and they fail accordingly. It's akin to someone suddenly discovering they like to eat food and deciding that's all they need to know in order to open a restaurant.

Now that's the truth. Near my house, I have three shops I can get to with a five minute car drive. One of them is clearly run by a guy who is enthusiastic, but doesn't know much about e-cigarettes other than what he's smoked himself, and there's another guy that works there that's just a pushy salesman type. It was a real turn off to try to talk to him about the eRoll and have him scoff at it until I mentioned the PCC... then the other guy was like "now that's a good idea". They are also the only shop of the three that also carries tobacco products.

The second shop (which is the one I will end up going to more often) is much more low-key, not in a big retail area, and the guys that run it seem very chill. It looks like they've been in business for almost two years and there's definitely a sense they know what they are doing. They also mix their own juice right there and have a lounge upstairs from the store... and it's a nice lounge. Their juice prices are competitive with what seems typical.

The third I haven't been to yet, but from their website it looks like a pretty big operation and several people I'm friends with on Facebook already follow them and say it's a great place. Their juice seems to be much pricier, but they also seem to have more complex flavors. I'm guessing if I go in there I'll encounter guys who know what they are doing. I'm over in that direction for a haircut once a week, so I'm anxious to go in and check it out.

My husband and I were joking that we should open up a vaping shop, but we want to have a lounge and also sell cupcakes. LOL! We would likely be nothing more than the enthusiastic type that ends up closing our doors in six months.

 

[IAmRikkiMarie]

I wondered the same thing! I mean how much money can one really be making in this business. Once people buy the mod it's pretty much sales of replacement parts, juice & little stuff. I wonder honestly if vaping is just a fad like so many other things that will fade out; then people are left with empty shops & too many smoking accessories (

 

[HecticEnergy]

I think there is a viable business model there. Mark up on hardware makes some money, but I doubt most get the traffic for that to support keeping the lights on and paying for employees, rent, and advertising.
All the shops I've been to here in town have their own juice lines. As I understand it a bottle of juice can be made for under $5 a 30ml bottle. And 5 is generous! But these things sell for like $15-25 a bottle...

I don't think devices are a "buy one that lasts for ever" kind of deal. Eventually these things fail and need to be replaced, and many people upgrade to bigger and better things. For all the RBA people out there, new rebuildables and rebuild supplies are dropping all the time, so it's hard to keep up, but defiantly this market is willing to spend some money on their setups! It's nice to go into the shop and look at the device in person. Personally I'll buy from a shop if they have a reasonable markup over what I would pay online... I'd pay 25 for a dripper I could get online for 20... But that's me!


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[Mrdaputer]

When you have a mark up of 1000% on juices I say yes. The bad ones close pretty fast too.

 

[GinnyTx]

Same here, there's one on every major freeway /exit it seems. And new ones every day, there's two advertising for partners, one's got a 4k buy in, I'm slightly mulling it over.

I think juices house blends would be the money maker, place an order to china NOW for the grand opening for hardware, mark it up slightly 100% rather than 400% I've seen with some, and get the pretty girls in there, Iv'e watch out local one, the ones that spend the majority of the money are the men/boys, women too, so get some pretty mods, some bling and sweet juices to get the women in, and then the $ will take care of itself, just like a bar business, you put a pretty girl in there they will come *lol*(oh last time I did this I got in trouble for mulling over business practices so well..ya'll know).

You have to know your stuff though, I'd think the liability would be huge, I've not called my insurance agent just yet, lets say. *lol*

I know the local one we cater is hurting financially, rent's a biggie, when my bead store retail front's rent went to $8800 from $5500 and the lease was up..I closed the doors. Labor comes second, then cost of merch. There's a couple I've been to here in Houston that are just thrown to together to make a quick buck, I've not gone back to those (no chairs, just juice on shelves on a wall and some kid that doesn't even vape booger pickin' behind some counter..no thanks!)

but it'll be interesting to see...a fad to some yes, an alternative to smoking will stay and mainstream more than likely. I've not pulled out the check book just yet, still doing market research if I'm going to invest of some those retirement dollars..so we'll see.

 

[mrmaico]

There is a shop that just opened here recently that doesn't have a real big selection of products yet but I'm hoping he'll stay in business. Too bad his markup on everything besides juices is about double the online prices. I still give him some of my business though because it's always nice to have a local source.

 

[gatorbait38]

I've got 3 that's opened with 10 miles of each other just in the last month. I tried to go to one Saturday but they were closed, even though the sign said open until 7pm. I like supporting local shops as well as the online merchants. I just don't see all of these shops lasting. Like someone said earlier, enthusiasm is not a good business model.

 

[Shellie]

we have 2 in our area that opened within the last month or so, with another one slated to open next month. of the two already open, I think both will make it for separate reasons. one is primarily a smoke shop, with a vape shop on the side. they're interested in customers who are trying to get off cigs and want to try vape. they have people who know their starter kits, and aren't selling the cigalikes. i actually got my vv3 there.

the other one is a vape-only shop, and they specialize in custom juice and mods. nowhere else in this area can you get a mod. they also have free rebuilding classes, you just have to buy the reasonably priced materials there. I think it's a good model.

Now, with those two already there, I'm not sure what the third shop can offer, but who knows. Unfortunately it's in a bad location and the other two are already pretty well known, so I hope for their sake they corner the market on something else.

 

[Bob Chill]

IMO the industry is ripe for complete homogenization. If I opened a shop I would go with the lowest overhead possible and short term lease.

Here's my personal thoughts on the current state of the business model:

By the time a new shop gets their customer base established (1-2 years) the regs will be looming. All these vape shops are going to become resellers of the same "approved" stuff. Juice in particular. Then price wars start and margins grow thinner by the day. Then a big box buys the market.

Juice will become centralized just like alcohol. Every restaurant can't be a brewpub and every vape shop can't be a mixer. I buy my bud light at the lowest priced beer store near me and I buy my micro brew from a gourmet grocery store with a massive selection and untouchable prices. I buy my beer glasses with a 20% off coupon from bed bath and beyond.

Depending on how hardware is treated will depend on how a custom vape shop will survive. All the starter gear and basic stuff will end up on the shelves of large stores with buying power. If higher end stuff goes untouched by regs then there is the sweet spot but it's a very small industry compared to the basics. It will end up being boutique style instead of high traffic. Almost head shop style in some ways.

Right now, vape shops survive on the margins of mixing their own and basic gear. If they only sold high end gear the business model becomes totally reliant on expertise and customer service. I've been to a dozen vape shops and maybe 3-4 out of those have those traits.

I mix my own juice and it costs maybe 10 cents per ml tops including the bottle. $3 for 30mls. Juice is the backbone of the business model and it's quite possible that's in big trouble in the not too distant future.

This is all speculation on my part but we've seen it time and time again. History has repeated itself over and over. Local hardware stores were great business models in the 70s and 80's. Local independent stores were a great business model across the board years ago. Nowadays, any product that can be distributed through a large channel eliminates any chance of a small guy surviving. If juice goes that way (I think it will) then the writing is on the wall.

I know this post won't be well received and it makes me sick thinking about it. I don't see it happening any other way though. The chances of juice becoming centralized from large "approved" suppliers and smaller "micro brew" suppliers seems pretty high at this time. Most basic vape shops won't have the means to be a micro brew. They will have to resell and compete.

Hopefully the entire proposed reg package gets delayed as long as possible and picked apart in court. There's a lot of pressure to "do something" though. ugh

 

[HecticEnergy]

IMO the industry is ripe for complete homogenization. If I opened a shop I would go with the lowest overhead possible and short term lease.

Here's my personal thoughts on the current state of the business model:

By the time a new shop gets their customer base established (1-2 years) the regs will be looming. All these vape shops are going to become resellers of the same "approved" stuff. Juice in particular. Then price wars start and margins grow thinner by the day. Then a big box buys the market.

Juice will become centralized just like alcohol. Every restaurant can't be a brewpub and every vape shop can't be a mixer. I buy my bud light at the lowest priced beer store near me and I buy my micro brew from a gourmet grocery store with a massive selection and untouchable prices. I buy my beer glasses with a 20% off coupon from bed bath and beyond.

Depending on how hardware is treated will depend on how a custom vape shop will survive. All the starter gear and basic stuff will end up on the shelves of large stores with buying power. If higher end stuff goes untouched by regs then there is the sweet spot but it's a very small industry compared to the basics. It will end up being boutique style instead of high traffic. Almost head shop style in some ways.

Right now, vape shops survive on the margins of mixing their own and basic gear. If they only sold high end gear the business model becomes totally reliant on expertise and customer service. I've been to a dozen vape shops and maybe 3-4 out of those have those traits.

I mix my own juice and it costs maybe 10 cents per ml tops including the bottle. $3 for 30mls. Juice is the backbone of the business model and it's quite possible that's in big trouble in the not too distant future.

This is all speculation on my part but we've seen it time and time again. History has repeated itself over and over. Local hardware stores were great business models in the 70s and 80's. Local independent stores were a great business model across the board years ago. Nowadays, any product that can be distributed through a large channel eliminates any chance of a small guy surviving. If juice goes that way (I think it will) then the writing is on the wall.

I know this post won't be well received and it makes me sick thinking about it. I don't see it happening any other way though. The chances of juice becoming centralized from large "approved" suppliers and smaller "micro brew" suppliers seems pretty high at this time. Most basic vape shops won't have the means to be a micro brew. They will have to resell and compete.

Hopefully the entire proposed reg package gets delayed as long as possible and picked apart in court. There's a lot of pressure to "do something" though. ugh

Well received.
I don't like it, but I think this is one possible outcome. Not all doom and gloom, but I think it's realistic.


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[Bob Chill]

Well received.
I don't like it, but I think this is one possible outcome. Not all doom and gloom, but I think it's realistic.


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After rethinking it for a minute, I'm not sure big box can buy the basic gear market outright. New vapers need help getting started. Quite a bit of help actually. It's not as easy as opening a pack and firing up a lighter. Prices of starter stuff will still have to be in line at smaller shops if my hypothetical situation happens. People will just buy gear as cheap as they can and then go into a vape shop for help. heh.

 

[jotter]

As the industry evolves Im sure that juice being mixed in every 3rd or 4th shop will become a thing of the past. The quality and consistency should improve as a result of this.

 

[k702]

A lot of these enterprises aren't backed by much more than enthusiasm - which is not a great model for opening a small business - and they fail accordingly. It's akin to someone suddenly discovering they like to eat food and deciding that's all they need to know in order to open a restaurant.

You have the woodworkers who like it when they tinkered at building mods, but found out they didn't like it so much when they had to deal with the actual realities of turning their fun hobby into the stern reality of running a business - and actually providing product if they took money for it. Stuff like that happens too often. http://www.e-cigarette-forum.com/fo...x-claims-paid-products-not-being-shipped.html

Or the juice maker who decided he could undercut pricing on everyone and drove himself right out of business when he got flooded with so many orders he couldn't keep up with the demand - and also realized too late he was losing his shirt in the process. That one lasted about six months. http://www.e-cigarette-forum.com/fo...gh-quality-price-closed-145.html#post13447009

Etc etc etc...

What I've noticed that I think is worse is those that have plenty of enthusiasm, but all they've ever had to do with a vaporizer is catching a news story that mentioned how much the market for them has grown in the last 3 years. In this case it is more akin to a vegan opening a burger shack.

 

[Prometheus72]

The sad part is I was in 4 different shops in Florida last Christmas, and not ONE of them knew anything about anything. They were selling some mods...but mostly just starter kits and juice from who knows where. These guys saw my RBA/RDA and mechanicals and the clouds I was blowing and were floored. They didn't know anything about rebuilding, about wire or wick material, about batteries etc. They were just selling cheap chinese start kit crap....and the sad thing is they are the ones out there giving advice to people. Just pathetic.

I'm sure not all shops are like that, but for newbies who know nothing....they can really lead them down the wrong roads

 

[HecticEnergy]

The sad part is I was in 4 different shops in Florida last Christmas, and not ONE of them knew anything about anything. They were selling some mods...but mostly just starter kits and juice from who knows where. These guys saw my RBA/RDA and mechanicals and the clouds I was blowing and were floored. They didn't know anything about rebuilding, about wire or wick material, about batteries etc. They were just selling cheap chinese start kit crap....and the sad thing is they are the ones out there giving advice to people. Just pathetic.

I'm sure not all shops are like that, but for newbies who know nothing....they can really lead them down the wrong roads

I think egos are a large part of the market. Now if they were selling rebuildables and mechs and had that reaction, I'd call that incompetence.


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