As you may already know, I have operated my own e-cigarette website for a number of years now. Readers often take the time to send their comments and questions and I’ve been asked many times for advice about how to start a vapor shop. This is a difficult question to answer as I’ve often felt that people start vapor shops without a full understanding of the challenges they’ll face. It’s hard to resist the urge to simply tell them, “you probably don’t want to start a vapor shop.”

The full answer, though, isn’t that simple. Let me preface this article by explaining that I don’t own a vapor shop myself, nor do I intend to ever start one. However, after covering this industry for years, I believe I have a unique perspective that might help potential vapor shop owners get a leg up.

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If you’re thinking about starting a vapor shop, I hope you find this article helpful — and if you already own a vapor shop and would like to lend your advice, please leave a comment below. I’ve also reached out to some acquaintances who have found success in the e-cigarette industry; you’ll find their thoughts throughout this article.

So, let’s begin with the biggest question of them all.

I love vaping and want to spread the word. Should I start a vapor shop?

Probably not. Leaving aside the challenges that you’ll face due to a harsh regulatory climate, you can expect to have difficulty starting a vapor shop because of the competition you’ll face from all sides. E-cigarettes got their start primarily through online commerce, and the biggest e-cigarette companies are now bigger than ever. The V2 Cigs, Blu Cigs and Vuse Vapor websites receive more than 1 million combined visitors every month — and that’s just four out of possibly hundreds of online e-cigarette merchants.

You’ll also have to deal with local competition. Every gas station, convenience store and local supermarket in your community probably carries at least one e-cigarette brand already. If they don’t, they will soon. These types of retailers make buying e-cigarettes easy because people will shop at them anyway. Even online e-cigarette companies are feeling the sting from local retailers, with many online sellers reporting the lowest conversion rates they’ve seen in years.

Starting a vapor shop, you’ll have to prepare yourself for the fact that business may start slow and remain that way for a while.

Not stymied yet? These are the tips that I believe can help put your vapor shop on the map.

How to Start a Vapor Shop: The Keys to Success

1. Know Your Market

Learn More: Why Your Vape Shop Needs a Website

Before you start a vapor shop, there are two things you absolutely must know about your local market. First, you need an intimate understanding of what people pay for tobacco cigarettes. Second, you need to know whether any dedicated vapor shops already exist in your area. If you live in a smaller city that already has an established vapor shop, it’ll be that much harder for you to get a foothold. You may have to try something a little different such as a mall kiosk.

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Equally important is the need to understand the tobacco sales climate in your area. Marketing e-cigarettes is easy in states such as New York and Illinois where the price of cigarettes exceeds $10 per pack. In states such as Virginia and Tennessee, you’ll need to present a more compelling case for the fact that your customers can save money by switching to e-cigarettes. Although we as e-smokers certainly hope that e-cigarettes can help to reduce the harm caused by tobacco, it’s the price that ultimately makes the sale. You’ll need to make sure that your product lineup can compete head-on with the packs of cigarettes that your potential customers are currently buying.

2. Carry the Best E-Cigarette and E-Liquid Brands

When you start a vapor shop, it goes without saying that you should carry the e-cigarette brands that you would personally use. Not only will you find these brands easier to promote because you’ll naturally want to speak highly of them, but you’ll also deal with fewer returns because of the high quality of the products.

Upcoming regulation is going to present new challenges for the e-cigarette industry, and it will be tougher for smaller stores to meet the requirements of the FDA. Those creating their own e-liquid in-house may be better suited selling established brands that can handle the burden of compliance.” — Jason, Halo Cigs

This may be even more important when it comes to the e-liquid brands your vapor shop carries. While part of your customer base will consist of smokers trying e-cigarettes for the first time, the other portion will consist of existing e-cigarette users who want to buy their favorite e-liquids locally without waiting for shipping. Carrying the most popular e-liquid brands will help you attract business from e-smokers who would otherwise buy online.

3. Leverage Social Media

Learn More: How to Promote Your Vape Shop Online

You may already be aware of the fact that search engines such as Google and Bing won’t allow you to bid on pay-per-click keywords if you’re advertising an e-cigarette business. This makes it incredibly difficult to get the word out about a new vapor shop, which is why so many e-cigarette websites resort to spam tactics to get noticed. This means you’ll need to get your customers to become your ambassadors. Make sure that your vapor shop has Facebook and Twitter accounts and use those accounts to publish articles and other information that your customers will find valuable enough to share with their friends. Be creative and make sure that your content is original and witty enough to break through the social media static. Otherwise, people may follow you but they’ll ignore your posts. Need help? Learn about our vaping SEO service.

4. Keep Costs Low

Learn More: Choosing a POS System for Vape Shops

One of the things that makes starting a vapor shop seem like an attractive proposition is the fact that the wholesale prices for e-cigarettes purchased from China are often incredibly low. Just stop by AliBaba and you’ll see some pretty wild prices. A lot of 100 eGo e-cigarettes in blister packs, for example, will carry a cost of around $350. Sell them for $19.99 each and you’ll have nearly $2,000. Repeat until you’re a millionaire. In real life, though, it isn’t that easy to start a vapor shop and get rich. You can’t just carry one e-cigarette. At the bare minimum, you’ll need something small such as a disposable and/or KR-808 e-cigarette, a midrange product such as an eGo e-cigarette and a high-end vaporizer along the lines of the VaporFi VOX II.

Stocking e-liquid will prove to be a much greater challenge. E-liquids are available in an enormous variety of different flavors and every e-smoker has their own personal taste. In addition, every e-smoker has a preferred nicotine strength. If you carry one brand of e-liquid that’s available in 30 different flavors and four different nicotine strengths, you’ll need an initial stock of 1,200 e-liquid bottles if you want to have just ten of each variety. If you want to carry more flavors or more than one brand of e-liquid — well, you get the idea. If you don’t carry the best-known e-liquid brands, you’ll miss out on some business.

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Keep your costs low by allowing as much customization as possible in the e-cigarette kits you carry. By carrying a supply of batteries and various types of attachments, you can allow people to customize their e-cigarette kits and potentially cut some of the costs associated with carrying pre-assembled boxed kits. You can reduce your e-liquid costs by carrying Chinese-made e-liquids, but you’ll run the risk of losing the loyalty of customers when they eventually discover better tasting e-liquids. Alternatively, buying bulk ingredients and manufacturing your own e-liquids can dramatically reduce your long-term costs, but there may be extra startup expenses in the form of obtaining necessary certifications and renting a lab facility. Making your own e-liquids will also mean that you’ll need to stay abreast of changes in the law as the FDA seeks to regulate the e-cigarette industry.

5. Start a Vapor Shop With a Clean, Comfortable Layout

I have read some shocking things about vape shops on Yelp and other merchant review websites. When I think of e-cigarettes, I think of them as a cleaner and more affordable alternative to tobacco cigarettes. I strongly dislike the “vaping subculture” and believe it can potentially exclude smokers who dismiss e-smoking because of the drug connotations. If your vapor shop has bars on the windows and/or reminds people of a pawn shop, head shop, nightclub or strip club, you shouldn’t be surprised if it attracts a specific type of clientele and that others stay away. If your community already has a number of established vapor shops, you may stand a chance of competing with them simply by laying your shop out in a manner that is well-lit, comfortable, safe and inviting.

Below are just a few pictures of vapor shops around the country, found on Google images. Which of these would you like to emulate?

6. Promote Your Vapor Shop Creatively

Learn More: Why Your Vape Shop Needs a Great Logo

Being unable to advertise your vapor shop on search engines severely limits how easily you can get the word out. This means you’ll need to promote creatively. Sales and giveaways will certainly generate buzz when you first start a vapor shop, but the expense of these promotions will be great. This means you’ll need to be creative in looking for low-cost promotional avenues. Reddit is one website where I’ve seen e-cigarette advertising, and you may also be able to use classified services such as Craigslist. You’ll also find online advertising services specializing exclusively in e-cigarette companies. These services such as eCigMedia operate on a CPM basis, charging approximately $8.00 per 1,000 views of your advertisement. They work by “retargeting,” or displaying your advertisement on well-known websites to users who have already visited another website in the same advertising network. These services generally do not allow you to target users in specific regions, though, so they may not be cost effective unless your business also sells products online.

Although online avenues for promotion certainly exist, you’ll find that when you start a vapor shop, you’ll need to do most of your promotion locally. Radio and newspaper ads can be surprisingly affordable, for example. Don’t be afraid to think outside the box a little, though. Hire people to become ambassadors and use e-cigarettes in local clubs and bars. Give a free disposable e-cigarette to smokers that you meet on the street. Every loyal customer that you manage to earn will bring you one step closer to having a successful vapor shop.

Learn More: Business Directory Guide for Vape Shops