Do you want to start a vape shop business and want to know the cost? If YES, here is a cost breakdown for opening a vape shop and the profit margin/ROI.
If you are looking towards launching a smoking lounge related business as an aspiring entrepreneur, one of your best bets is to launch a vape shop. The right time to start such business is now because smokers are switching to vaping and the business is presently at its growing stage.
What is a Vape Shop?
A vape shop is a retail outlet that is predominantly into the selling of electronic cigarette products. There are also online vape shops. A vape shop offers a range of e-cigarette products. The majority of vape shops do not sell e-cigarette products that are from “Big Tobacco” companies.
In 2013, online search engine searches on vape shops surpassed searches on e-cigarettes. Around a third of all sales of e-cigarette products take place in vape shops. Big Tobacco believes the independent e-cigarette market is a threat to their interests.
An ideal vape shop offers a range of e-cigarette products. They do not customarily sell tobacco products. Vape shops generally have an unfriendly relationship with the tobacco industry.
The Estimated Cost Breakdown for Opening a Vape Shop
One of the major areas you should mindful of when considering starting a vape shop is the total cost for setting up the business. However, starting up a vape shop business may not require pretty huge startup capital, it also needs a significant investment capital, solid planning, and attention to detail in order to keep your business profitable.
From our market survey and feasibility studies, we have been able to come up with a detailed budget on opening a standard vape shop in the united states of America and here are the key areas where you are expected to spend your startup capital;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
- Marketing promotion expenses for the grand opening of the liquor store in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580
- The cost for hiring business consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost of accounting software, CRM software and Payroll Software – $1,500
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of – $35,600.
- The cost for shop / facility remodeling – $25,000.
- Other start-up expenses including stationery – $500
- Phone and utility deposits – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $30,000
- The cost for start-up inventory (a wide range of electronic cigarette products, E-liquid (mixture used in vapor products such as e-cigarettes and usually contain propylene glycol, glycerin, nicotine, flavorings, additives, and differing amounts of contaminants), vape pen, replacement coils and juice may cost you as little as $50 for the first month, while a full-featured box mod paired with an MTL tank, coils and juice may go up to $120. After that, you should expect an average of $30-60 per month for coils and juice) – $16,027
- Storage hardware (bins, utensil rack, shelves, glasses case) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $6,000
- The cost for serving area equipment (glasses, flatware) – $3,000
- The cost for store equipment (cash register, security, ventilation, signage) – $3,150
- The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $8,000.
- The cost of launching a website – $600
- Miscellaneous – $2,500
From the rough estimate as listed above, you would need a minimum of one hundred and forty – three thousand USD ($143,000) to establish a medium – scale but standard vape shop business in any city in the United States of America. Please note that this amount includes the salaries of all the staff for the first three months of operation.
What You Must Know Before Opening a Vape Shop
The existence of some “vape and smoke” shops are opposed by most of the vape shop industry, based on anecdotal evidence. In recent time, retailers specializing in tobacco started selling an assortment of vaping products along with their regular products.
These vendors are generally opposed by vaping purists and advocacy groups. Brands owned by tobacco companies offered a limited range of e-cigarette products, whereas brands owned by vape shops emphasized a panoply of flavor and nicotine options.
By 2014 all the major multinational tobacco companies had entered the e-cigarette market. They did so either by buying existing e-cigarette companies (including Ruyan, the original Chinese e-cigarette company, which was bought by Imperial Tobacco) or by developing their own products.
Although there continue to be independently owned vape shops, from economic and political perspectives the e-cigarette business is now part of the traditional tobacco industry. The smaller operators who are independent sellers of e-cigarettes (so-called vape shops), are losing market share to the large tobacco companies.
In order to invest wisely, you need to carry out a research on the industry or line of business you intend investing in. If you are opening a vape shop for the first time, it is important you conduct a thorough research so that you can be well guided when making a choice from the array of options that are available to you.
One truth is that, you will not only compete with vape shops in your location or city, but you would be competing with every other entertainment option such as wine bars, night clubs, restaurants, casinos et al where cigars are retailed and can be freely smoked.
Please note that this is a rough estimate and we usually advise our readers who are interested in opening a vape shop to have a clear picture of what they want to achieve, go to the market or directly contact sellers of the items they would need to get the real time prices of these items. The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.