The vape industry is one of the fastest-growing industries globally, expecting to exceed $61 billion by 2025. If you’ve been thinking about opening a vape shop, now is the time. While it’s a lucrative industry, it’s a bit trickier to open a successful vape shop than a typical retail store. So, with that in mind, let’s go over how to open a vape shop the right way.
When opening any business, you should build a plan that outlines everything from your budget, expected costs, competitor analysis, market research, as well as your business goals and how you’ll achieve them. This might seem like an overwhelming task, but there are plenty of online resources that will help you outline your business plan.
However, vape shops require some extra planning that other businesses typically don’t need. On top of budgeting for inventory, rent, salaries, taxes, and insurance, you’ll also need to consider the costs of licenses and permits for selling vape products. Depending on your geographic location, your fees may also be higher than other businesses because vape shops are considered ‘high risk’ businesses.
The vape industry is considered ‘high-risk’, which according to Small Business, simply means your business involves health and safety – and “may affect your company’s ability to acquire financing, insurance and merchant accounts.”
Register your business with your federal, state/provincial, and local government, and obtain any required licences or permits for your store. This will depend entirely on your location, as the regulations often vary depending on your Canadian province or American state. If you’re living in America, you’ll need to consult the FDA regulations, and your local state regulations. Canadians can consult the Canadian government site for vaping regulations. This can be the trickiest part of opening your vape shop – sometimes, your local guidelines will contradict your federal guidelines. It’s a good idea to consult a lawyer to ensure you’re following the regulations properly – the last thing you want is to get fined or shut down.
Likewise, any business will need business insurance. You can expect to pay higher fees due to the high-risk nature of your store. While many businesses can just buy their insurance from general insurance companies, your best bet is to go with insurance brokers that specialize in vape shops. Most general insurance policies won’t cover e-cigarettes, e-liquids, defective products, or health hazards – but a policy specifically tailored for vape shops will.
When choosing a location for your brick and mortar, keep in mind your budget, your competition, as well as your target market. Ideally, you should choose a location that’s within your budget, and is within reach of your potential customers – without being too close to your competition. You want to be accessible to your potential customers, and yet if you’re too close to your competition you won’t reach the success you want. Likewise, try to pick a location that is space efficient. You’ll need a space big enough for customers to browse comfortably while maintaining social distance, but also not so big that it will be hard to fill with stock or to afford the rent.
If you’re opening a business in 2021, you’ll need to have an online presence. As of 2020, 21.3% of sales were online – and we can only imagine how that number has risen since the pandemic. With an online store, you’ll have more reach, more sales, and more brand awareness. If you’re still unsure, here are a few reasons why you should take your vape shop online.
The two most popular site platforms are WooCommerce and Shopify. For an ecommerce platform, we recommend WooCommerce. Not only is it more affordable and customizable, but it’s more vape-friendly than Shopify. As of recently, Shopify has introduced its own payment processor, Shopify Payments, which prohibits any business that sells e-cigarettes, e-liquids, or age-restricted products. While you can still use other payment processors that do not have these restrictions, Shopify will charge a 2% transaction fee – and that’s on top of whatever your payment processor will charge!
With WooCommerce, you can accept payments from almost any payment processor, such as vape-friendly authorize.net, so it’s much easier to run your online store.
Before you can open your store, you’ll need to get your inventory. Where? We recommend finding a wholesale supplier, ideally in your region or close to it. You can find a lot of inexpensive wholesale vape products from China, but if you’re opening a business in the US or Canada, the extended shipping time and costs aren’t worth it unless you’re buying in huge quantities (which you probably shouldn’t be if you’re opening a small vape shop). Stick to a distributor in your region. Shipping will be faster, and you’ll likely have better customer support.
Finding the right POS for vape shops is tricky. You’ll need a solution that’s affordable, user friendly, keeps track of your inventory, and keeps track of your customers. What’s more, if you decide to take your store online, you’ll need a POS that syncs with your online store.
That’s why vape shop owners love Oliver POS. Oliver is a free WooCommerce POS that syncs in real-time with your online store to simplify your vape business. Oliver offers customer profiles and purchase history so you can deliver the best customer service possible while getting to know your customers. It also offers in-depth analytics, inventory management, and staff roles, all which you can manage on your POS.
Many marketing platforms prohibit vape promotions, like Google and Twitter. Your Federal regulations are also pretty strict about how you can and cannot market your store. But don’t worry, there are other ways to market your new business.
One of the best ways is to learn how to conquer SEO (search engine optimization) to get organic traffic to your online store. No paid ads necessary – just a little bit of research.
Maintaining a lively presence on social media is a great way to market your vape shop, as well. Although platforms like Twitter won’t allow paid ads, you can still engage with your followers and post interesting content to gain more brand awareness.