I previously declared smoke shops as having better business models than vape shops. Since I run a vape business, I realize this is a bit of a shock to some of you, but there’s a method behind my madness. And it has nothing to do with a recent trio of lawsuits by vape shops against the FDA.
In my experience with visiting smoke shops, they have the best of both worlds. They make a killing on regular smokers coming in to buy a pack, and they do equally well with vapers picking up their 60ml for the week. The advantage they have is exposure to smokers. The product is presented to them where they already are. They come in to buy their pack and look over at the vaping products. At some point their curiosity will win them over in to trying out a vape pen.
Even if they only vape once and decide it’s not for them, they’ll still return to the smoke shop. While data shows 1.5 million vapers in the U.K. alone have not returned to smoking, another 1.4 million have.
By contrast, the vape shops have nothing else to offer outside of vaping. You’re either in or out, and in a lot of cases, customers just never returned.
Smoke shops in general make decent money, so for them to step one foot into the vape side is much easier than a new vape store going up. It’s just a matter of allocating money to vape inventory and hiring a worker with vape knowledge. A model like that will attract potential investors, as the risk level would be fairly low.
Smoke shops are known to have less sexy looking stores. And honestly, they don’t care. What they care about is what generates revenue quickly so that the customer is in and out. They carry candy, soda, drinks and other random stuff that yield high margins. They cater to vapers, smokers, cannabis users, and anyone else who walks in their doors.
Think convenience store. There’s a reason why 7-11 holds the title as the #1 franchise to open in the world. Maybe it’s time for vape shops to take a page out of that book?
Otherwise, we’re going to see more and more vape shops closing. The vaping industry bubble has burst, and only the strongest businesses adding true value to customers will survive.
More continued on Part 3: 5 tips on how Vape Shops can be successful in the long run