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Vaping is a relatively new industry, even compared to the budding cannabis industry. Within the last few years, retail stores popped up left and right, claiming territory on shoestring budgets as low as $15k.
People everywhere borrowed money from friends, family, or wherever they could get it to jump on the bandwagon and create a successful retail vape business. Those who did it right paid those loans back within three months and after six months had full-time employees and money coming in faster than the next hottest mech mod is released.
After a year, smooth sailing was assumed, but business stalled as big tobacco supplied disposable eCigs to c-stores, homebrewers and hackers posted instructionals online, and the market became flooded with competition.
These are all excuses – the truth is you got lazy and forgot some of the most basic Business 101 lessons. Making any of these simple mistakes will cost you your vape business.
- Overpaying for Retail Space
It’s important for a business to have a great location, but the best location isn’t necessarily the most high-trafficked or highly visible. I’ve seen neighborhood vape shops flourish without being anywhere near an expensive mall, where you’ll deal with too many underage kids and judgmental parents.
Don’t think like a green-rusher trying to make a quick buck with a get-rich-quick vaping scheme. Stop looking at potential customers as addicts, idiots, or sheep, and focus on making the most of a space you can afford.
Think like a vaper and look for nearby vape shops in your city. Plan your location so you’re providing convenience in a populated area without impeding on someone else’s territory. Competition isn’t a bad thing, but oversaturation is.
Some friends of mine in the vape business split office space with other businesses to test it out before signing an expensive 3-year lease. If you can’t find a way to do this, you’ll just have to put more effort into marketing, which reminds me.
- Ignoring Sales Opportunities
You built your store for locals, so why bother catering to tourists and other outsiders? Well for starters, it’s easy residual revenue. If you’re in business, you should be looking for every sales opportunity. If you don’t, someone else will maximize their revenue and become the next VapeRev.
Getting listed on Yelp, Google Maps, and Apple Maps is easy and gets you listed on many widely-used GPS mapping systems. Anyone looking for a physical vape shop online will use these mapping programs, so if you’re not listed, you don’t exist to a large potential customer population. Encourage customers to comment and rate your business on these sites.
You’re not even part of the conversation if you don’t have a website, which will be referenced in the map programs. All it takes is a webhosting service like GoDaddy to store your site. WordPress and Joomla have efficient webpage templates to build a site, and Shopify and a variety of other services offer intuitive shopping carts and other ecommerce solutions to ensure each page of your site has a call-to-action.
Once you have a website, get it listed on search engines like Google, Bing, and DuckDuckGo to increase online visibility.
This is all free, but if you have a marketing budget, you can also purchase ad space on Yelp and increase Map visibility. Now your business looks as official as Wal-Mart, instead of like some shady pawn shop on Knockturn Alley.
- Buying Too Much Inventory
The only way to draw customers is to offer the latest, greatest mechanical and box mods, right? Wrong – don’t get tricked into hitting high minimum orders just so you can stock the next hot mod. Lifespan of tech is notoriously short, and in another 2-4 months, the next hyped-up mod will be released, and you’ll have a huge inventory of outdated models.
Like the stock market, it’s best to diversify your investments. It’s best to have a large spectrum of ejuice flavors and nicotine levels to match a wide array of customer palettes. It’s common sense that more juice will be sold than mods as they’re cheaper, and a mod can vape more than one bottle of juice (unless it’s a POS, which you shouldn’t be selling). Use awesome sales floor tools like Vape Menu, which provides a free service that saves time and money by organizing all your e-juices in one professional digital menu. Remember, efficiency is key to scaling up your monthly sales!
For hardware, stock 50% starter kits, 40% mid-level, and 10% high-end and luxury mods is a good starting formula, though you should adjust to match your market and business model. In addition, be sure to carry a variety of accessories (tanks, wicks, coils, chargers, etc.) to cater to those looking for replacement parts.
- Creating an Island
Ignoring everyone else in the business is a guaranteed formula for failure. Brand loyalty is important, and vape brands take care of their long-time customers. Instead of constantly rotating inventory, find a dozen or so brands in each category (or even a distributor like Beyond Vape), and stick to them.
Start networking and making business connections with the ejuice brands you carry. Find their marketing people on their website or LinkedIn and reach out to introduce yourself as an ejuice retailer. This helps solidify you as part of the larger vape community.
A presence at vape competitions and trade shows like ECC can help as well. Meeting with vape industry leaders at these events can get you into doors you wouldn’t have otherwise been able to enter. Vape politics exist just like in any other industry.
- Avoiding Social Media
Social media is more than just a trend. Facebook and Twitter going public pretty much proved that, so stop ignoring social media.
Use these sites, along with Instagram, Vine, Tumblr, and Pinterest to display hi-rez photos, videos, and other marketing materials. Customers and enthusiasts will share these posts to their circles, spreading your reach. In addition, insightful posts on sites like Reddit can turn into huge traffic for your site.
Recently, influencer marketing has been gaining popularity for products, stores and services. Micro influencers of 1000-100,000 followers have been getting a lot of attention lately for their engagement and low marketing costs. The only downside is that there really is no way to track your ROI. We recently wrote an article about it here.
If your profiles are descriptive, you’re posting insightful thoughts, and including beautiful visuals, you’re creating a solid social media foundation. Apps like Hootsuite automate posts across social media sites, so you’ll only spend a few hours a month keeping up an active social media second life for your vape business.
- Forgetting Customers
It should go without saying, but the most successful vape businesses offer world-class customer service. There’s always a friendly person onsite willing to help, as opposed to a douche with a cool-guy attitude. Stop discriminating and start being friendly to your customers and treating them with respect. Profits will immediately increase.
Also be sure to encourage a friendly attitude among customers. People may be new to vaping, and you don’t want to be the place that discourages them. Everyone was once a noob, so model your atmosphere after the accepting yogis in a yoga shala, as opposed to elitest bouncers in a Vegas VIP area.
- Shooting Too High
We all loved watching the excessive spending of Wolf of Wall Street, but you may want to save your money. Getting too ambitious and spending money you don’t have based on sales figures alone is a highway to trouble.
What are you going to do if new vaping regulations eliminate 90% of all vape shops? Are you even aware of what’s happening in the vaping industry? Don’t start throwing all your profits into sponsoring huge events and opening more stores before understanding the intricacies of your business sector.
Play it safe and leverage the success you have while evolving your business and opening more revenue streams, even if they’re not vape-related. If 50 Cent and Puffy can expand beyond music, you don’t need to pigeonhole yourself.
- Dividing Attention
Be sure not to divide your attention too much though. Vaping is still a big business with a lot of players, and every opportunity you don’t take goes to someone else. A lot of smart shop owners work a 9-5 while paying full-time employees to work their shop.
This is a great break-fix for temporary situations, but if you’re doing it for more than a few years, it may be time to choose.
Retail vape shops are opening on every corner, and not every one will be successful. Vape entrepreneurs need to be willing to put in the time and research to make smart business decisions. Focusing on inventory, budgeting, customer service, and the industry as a whole will prepare you for success and help you avoid the common pitfalls of opening a vaping business.
You may also want to check out our other article ‘8 Tips to Scale Your Vape Business’
Brian Penny is a former business analyst at Bank of America turned whistleblower, consultant, troll doctor, and writer. He’s featured on The Huffington Post, Mainstreet, Lifehack, Money Side of Life, Gaiam, HardcoreDroid, and more.