Will The Vaping Industry Continue Its Surge?

The e cig industry has been good for a lot of people. It has made a big financial difference to ex-smokers and has given business people a way to make a living. Electronic cigarettes are the focus of an industry on the rise.

Beleaguered Americans

A few years ago, it was not uncommon to walk down even a busy commercial street and see 20% of shops boarded up or their windows cold, dark, and empty. Now, many of those empty windows are full of life, warmth, and activity again. E cigs gave hope to Americans hit by the recession.

While entrepreneurs found openings for their business plans, they also had to hire employees. Successful stores expanded to open two or more locations in one city, a state, or nationally. Contractors decorated and renovated. With every new store, more employees and contractors needed to be hired. The United States Postal System has been hopping with deliveries. Logistics companies are busy too with shipping and receiving.

Small Business Categories

What are these small businesses selling? There are two categories:

• Electronic cigarettes and accessories
• E-liquid

Out of these businesses, some are open to the public but others make and sell their products through distributors and small e cig shops. Numerous companies operate online only, but they keep only a few employees and limited stock. Otherwise, selection, atmosphere, and pricing are the main differences between stores.

Vaping Stores Setup

For instance, numerous shops are organized around the needs of early and intermediate vapers. Their products are uncomplicated to operate and inexpensive to buy; thus, shops are able to stock several different examples of items which do the same sorts of things. Their batteries come in loads of colors and 3 or 4 sizes. They offer 4 or 5 types of clearomizers, maybe more.

Starter kits are compiled with chargers and cases. Juices on their menu come in loads of flavors and are usually fairly balanced or favor propylene glycol over vegetable glycerin. Many such companies sell e-liquid at extremely competitive prices. They might carry a few disposable e cigs, but not usually rechargeable cigalikes.

You will notice that relatively few companies sell cigalikes from vaping shops. They concentrate on the next level or above.

Even those stores for early vapers carry some advanced devices, but the most complicated thing you can find is usually an electronic box mod like the Innokin iTaste MVP 2.0. Sometimes a business stocks the original brand, but often the absence of a brand name allows shop owners to sell goods for lower prices. They might or might not offer juice tasting. At the early to intermediate level, brands you typically see are Aspire, Innokin, SmokTech, JoyeTech, Boge, and/or Kanger with liquid by Hangsen, and Dekang.

Another store setup would be to provide only advanced devices from variable voltage mods to purely mechanical mods. These will be solely authentic products costing $50 for an atomizer and up, solely inexpensive clones, or a mixture. Generally, popular brands include Innokin and SmokTech once again: the Cool Fire II and SmokTech Ace. Other examples would be the Provari and Hana Modz. These products can be adjusted by pressing buttons to direct voltage up or down.

Mechanical mods only feature firing buttons and the battery powers an atomizer in the tank, but the way you adjust voltage and resistance is to change the atomizer set up for fewer or more ohms, to change airflow, and to change a small battery for a big one. Kamry 101 telescopic mods are popular in this category. Vicious Ant, RJ Mods, and Madz Modz also fall under this heading. These are made to be rebuilt so the store will stock extra parts.

Along with mechanical mods you will always see rebuildable atomizers. These are not merely replaceable heads but atomizers designed to be used with high-powered devices and at sub-ohm values. Some are for dripping high-vegetable glycerin juice. At these stores the e-juice is high-end: Suicide Bunny, Vaping Birdy, Villain Vapors, and the like.

E-Juice Stores

In this category, there are lots of companies selling only through distributors; no shop fronts. The others frequently sell products online directly to customers or the juice line is made by a vaping store carrying electronic gear. Small businesses focus on hand-made products and do not always have the facilities to mix juice in a lab, but they often make each product to order so it is absolutely fresh each time it goes out the door. Some vape shops also provide lounging areas and e-juice bars where clients stop by to try flavors. They might set a limit or maybe not, but these are popular places to try flavors and brands for the first time.

E-juice companies generally make liquid to be sold by the bottle, not in pre-filled cartomizers. Only a few companies do that. They are not small businesses and the pre-fills are for cigalikes anyway: the Halo G6 and VaporFi Express, for instance.

Forecast for Vaping Companies

With the e cig situation still up in the air, one cannot be too sure how to read the financial forecast for small electronic cig businesses. If they are about to be strictly regulated then it is possible the small stores will either shut down or their e-juice will no longer be sold. Small businesses will go first. They do not have the capital or infrastructure to complete tasks required by the FDA.

Or do they? Markups in this industry are remarkably high. Companies are not earning a few percent on each dollar. This is the other factor one must consider: will regulations also affect markups? If so, there are possibly some businesses about to go bust because they were created on the basis of huge profit margins.

Transformation

Let’s hope the industry doesn’t take too big a hit. Vaping stores did not push out existing shops but, instead, filled empty places that were turning high streets into ghostly, forgotten places. Even non-vapers benefit when a street does not look deserted and customers, full of the joy of e-juice, suddenly want a coffee or dinner at the restaurant next door

Hops & Haze • August 28, 2016


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