Like any other industry, success in the vape industry depends on using a solid business model as a foundation. The sign of a great vape business model is its scalability – the model should be a replicable system for delivering consistent-quality goods and services at the same pace, whether to one customer or one million, without increasing operating costs.
If operating costs increase with revenue, your vape business isn’t scalable. This is why entrepreneurs and smaller teams often rely on automation to compete with larger firms.
Scaling a vape business is particularly difficult because the market is crowded and local municipalities strictly regulate both vaping and vapers. These eight steps will keep your vape business on track to exponential growth and profits.
Nobody can win alone; it takes a team constantly selling and marketing any product to keep it going. You won’t be able to do this yourself, but that’s ok, so long as you know to involve channel partners.
Channel partners are third-party vendors hired out for the purposes of sales, marketing and promotion. Hiring channel partners gives you an experienced sales team following dedicated processes and procedures to keep your vape products in everyone’s eyes. Industry commission rates can range from 15-30% depending on each channel partner.
Vape hardware manufacturer or e-juice companies should look for nationwide distributors to push the brand to the next level. More notably, companies like VaporBeast, LocalVape, BeyondVape and VapeRev all have large networks of over 5000 retail stores within their reach. Keep in mind, no matter how great of an RDA you have or amazing your new flavor is, you’ll need to lower your prices when selling wholesale to these distribution partners.
Also look for ejuice and vape stores in various regions that offer group buys within their area. This can be a little more personal if you want to grow organically while negotiating a fair price. This is a great option if you can’t ramp up production fast enough.
B2B platforms such as Ejuices.co and NexinVape, which provide a one stop shop for retailers to purchase wholesale directly from the vendor, are quickly becoming the next big thing in vape and ejuice sales.
These channel partners don’t hold inventory, instead taking a commission for each sale provided from their online platform. They aren’t pressured to move pre-purchased inventory, and the manufacturer can set their own price margins. This is a win-win for everyone.
Also look into affiliate programs that allow web publishers and social media users to post links to your products for a commission on any sales that come in. Make your affiliate page accessible in your website’s footer and main menu for maximum visibility. Our brand Vape Chemist uses LeadDyno paired with our Shopify ecommerce platform. More well-known companies like ShareASale are great options as well but involve a pricey sign up fee.
Do your research and find which affiliate program works for you.
#ProTip - Before signing up with any vape business partners, thoroughly research their background by contacting current customers and asking how their experience is, doing a google search, and hiring a background verification service if necessary. This vital step of due diligence is like checking a used car’s Carfax report and should never be skipped.
Throughout the year, vaping is represented at cloud-blowing competitions, vape business conferences, and vape, tobacco, and cannabis trade shows, expos, and exhibitions.
From the Vape Summit in Houston to the Tobacco Plus Convenience Expo in Las Vegas and the BIG Industry Show in Denver and Miami, vape events draw tens of thousands of B2B attendees. Attending, exhibiting, and sponsoring these events puts one sales pitch in front of tens of thousands of potential business clients and is key to scaling a vape business.
Don’t just stick to vape-centric events; a presence at any large-scale events for people 18 and older can lead to sales. Just be sure to check local laws prior to selling or you may end up in jail for doing business without the proper permit.
#ProTip – If you don’t have the marketing budget to purchase booth space and a build-out, attend the event anyway. Bring a suitcase of business cards, promo items and products you can demo to buyers walking the floor. Know who’s who in the industry, and pitch to shop owners or potential partners who hang around vendor booths. If you can’t even afford a ticket, hand out free samples and promotional materials outside.
The reason you’ve heard of brands like Nike and Gatorade is because of extensive sponsorship and endorsement deals these companies have with top athletes of the day. As previously discussed in the vape sponsorship article, these deals can be mutually beneficial by exposing your vape brand to an audience through a trusted brand.
If you sponsor any concert, promotional bar/club event, cloud competitions, expos, conventions, or trade shows, your promotional materials are included in program guides, as posters, and announced throughout the event (depending on the amount of money given in the sponsorship).
By signing an endorsement deal with a celebrity, they agree to provide certain levels of marketing and advertising (appearing in commercials, on your website, or mentioning your product in public appearances). Make sure to double check contracts before signing them to ensure you can disassociate your brand if the celebrity ever goes Bill Cosby on you.
#Protip – If your budget is limited, find YouTube reviewers, vape tricksters on Instagram and Vine, or local cloud chasers who compete. These endorsements aren’t always monetary; more than 80% only want free product in exchange for their reach. Provide your ejuice, mods, and branded merchandise to these online influencers to increase your vape brand’s visibility far beyond its current reach.
Search Engine Optimization (SEO) is free and can be the biggest traffic draw to your website. Organic search traffic is the goal of any website online as it’s consistent, free, and raises your brand’s overall profile. Typically, organic Google searches can represent 60% of your analytics matrix.
Properly name and format images on your website, create compelling product descriptions and write informative, keyword-rich, 500- to 750-word blog posts. Following these basic principles can provide huge influx of traffic and an ROI you didn’t even know existed.
When paying for any kind of PPC, SEM, CPC, or other digital or social media marketing efforts, focus them locally. This helps you measure the effectiveness of each campaign by local market and adjust accordingly over time for the best possible ROI.
Be aware vaping is considered a tobacco-related sector, so many advertising platforms like AdWords don’t allow advertising of vape-related sites. Look for ad platforms such as Mantis that are vape-friendly.
#ProTip – You know that annoying friend that always corrects your grammatical mistakes? Put them to work creating (or, at the very least, editing) text for your website. If you don’t have one of those friends, you can crowdsource the work through services like CrowdContent or find a professional writer through Freelancer, ExpressWriters, or even Craigslist.
Every person you talk to is an opportunity to sell your vape products. While drug dealers shouldn’t get high on their own supply, it’s a good idea in the vape business to test your own mod kits, be the best coil wrapper in the building, and know your tanks, atomizers, batteries and wattages.
Always promote the vaping lifestyle and live it to the fullest. Update your social media profiles to show your commitment to your brand and business. If your friends don’t think of you as their go to ‘Vape Guy’ then you haven’t done your job. This is how you inspire confidence in your industry and, eventually, your products.
#ProTip – While large, bulk orders generate more revenue than individual sales, every sale contributes to your vape brand’s profitability. A website provides you with a low-cost, 24/7 storefront to sell your products, and services like SalesForce provide a back-end CRM solution to keep your sales and customer data both organized and safe from data theft.
Turning customers into channel partners is a great way to scale a vape business. Loyalty and incentive programs motivate customers to buy more of your vape products. Repeat customers represent a huge chunk of your business that can be often overlooked, along with upselling (i.e. – adding extra coils and a customized mouthpiece for a mech mod purchase).
While loyalty programs work for juices, equipment like mods, tanks, mouthpieces, cartomizers, and coils is more difficult to convince customers to buy multiples of through anything other than product quality. Incentive programs for these items should focus on referral bonuses for referring new customers.
#ProTip – Try a variety of incentive programs, but be sure to always follow through on any discounts so customers trust your vape brand. Ask for product reviews and give em a 10% discount code for reviewing your products. Offer cash incentives for referrals from your best customers, or provide BOGO offers or a free bottle of juice with the purchase of 10.
Subscription business models are a major trend these days, and it’s not hard to see why. Recurring revenue is guaranteed and consistent (thus able to forecast) income that can be depended on. Every customer subscribing to your products is keeping you in business for another month without raising your acquisition costs.
Dollar Shave Club (men’s hygiene) and Birchbox (women’s beauty) are two of the most successful subscription services on the planet, and vape companies like ZampleBox, CraftVapery, and Vapebox quickly capitalized on the trend.
These services curate content to provide subscribers with a box of assorted vape juices and accessories every month for a low subscription price, providing perceived value while still making good margins and promoting the brands contained in the box.
#ProTip - Try offering a subscription delivery service to start building recurring revenue. Keeping these customers from leaving requires offering a value (such as a discount) for subscribing. If you don’t have the time or resources to set up a subscription for your own products, contact the companies above to negotiate the inclusion of your vape products in their boxes. Providing samples in a vape subscription service raises your brand’s visibility.
The general public doesn’t understand how effective email marketing truly is and why spam has existed and persisted for decades. Email marketing is consistently ranked as the most effective digital marketing tactic by professional marketers. Customer engagement, sales revenue, and conversion rates for email outperform those for social media, SEM, and other online marketing campaigns.
MailChimp is free to businesses with less than 2000 subscribers – take advantage. You may get annoyed with spam emails, but trust me they do work. You may lose a few subscribers here and there on each email blast but your loyal customer base will appreciate the heads-up. Remember its quality over quantity.
Experiment with A/B testing to see what content and incentives work for your vape brand. Once you master the art of how to write effective newsletters, there’s nothing stopping you.
#ProTip – Analyze vape- and non-vape-related newsletters to find compelling sales techniques you can apply to your business. Vibrant photos and strong keywords are the key to your success in email marketing.
Scaling a vape business is a lot harder than it looks in the trade magazines. There are over 50 search terms related to vaping, and there are dozens of companies competing for revenue in each of them. With a saturated market that’s possibly facing an implosion due to regulations, a scalable business model is essential to building a solid vaping 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.
Additional content by Vape Chemist founder Conrad Alberto