Choosing to open a vape shop is one of the best decisions you can ever make as an entrepreneur. Running a vape shop can be very profitable, and vape shops also serve an important purpose in their communities because they play a role in keeping people away from tobacco products. Vape shops, however, aren’t exactly the same as other types of retail businesses – you’ll need to consider a few important things before you get started if you want to have the best possible chance of success. In this article, we’re going to explain the most important of those things. These are the four biggest mistakes that new vape shop owners make.
One of the most important things you’ll need to consider as a new vape shop owner is where you’re going to get your products – and that means selecting a distributor. The distributor(s) that you decide to work with will determine what products you’re able to offer in your vape shop and how much profit you can expect to earn from selling those products. The best vape juice distributor will offer the widest variety of products at the lowest possible price.
The thing that’s even more important than a distributor’s price and selection, however, is product authenticity. Fake vapes and e-liquids do exist, and there are more of them on the market than you might think. Selling counterfeit products can be a death blow for any vape shop, even if it isn’t your fault. It’s important to either select a distributor that gets its products from the original manufacturers or to work directly with the manufacturers yourself.
It’s highly unlikely that your vape shop is going to be a cash-only establishment, and that means you’ll need to find a company to process credit card payments for you. This is where you’ll run into one of the biggest challenges of owning a business in the vaping industry: Many payment processors don’t want to work with vape shops because they’re considered “high risk.”
Vaping business have the high-risk designation because transactions relating to vaping products are more likely to result in chargebacks than most other types of retail transactions. As a high-risk business, you will probably need to pay slightly higher processing fees and may also need to supply proof that you’re verifying customers’ ages before selling to them.
Working with a payment processor that offers high-risk accounts means that you’ll pay more for transactions, but that’s a cost of doing business in the vaping industry. Don’t try to sneak transactions through a payment processor that doesn’t allow vape sales because you’ll end up having your account cancelled. In the event of an account cancellation, the payment processor may hold your funds for several months until chargebacks are no longer possible.
It’s important to remember that whether your vape shop is an online or brick-and-mortar business – or both – there will be some marketing channels that aren’t open to you. For example, the two largest providers of paid search engine advertising – Google and Bing – don’t allow companies in the vaping industry to post ads.
Major social media companies such as Facebook also don’t accept ads from vaping companies. These days, social media posts have almost no organic reach. If you have a page on Facebook, only about 5.2 percent of the people who follow you will actually see your posts in their feeds. Since you can’t pay for better reach, it’s unwise to invest large amounts of money and resources into social media content unless you know that people are specifically visiting your page to see your latest posts.
Improving your website’s content is always the best investment that you can make to increase your web traffic. Unlike with external platforms such as social media sites, the content that you publish on your website belongs entirely to you. No one else can remove or deprioritize that content – and once you’ve made the investment to produce that content, it’s yours forever.
If you’re running a local vape shop, it’s also wise to focus on marketing channels that reach people within your community. Radio and newspaper ads, for instance, can be very effective. You should also add your vape shop to as many local business directories as possible.
Once your vape shop is operational, you’ll have two tasks at hand. The first task – which we discussed in the previous section of this article – is to bring as many new customers to your shop as possible. The second task is to keep your existing customers engaged, so they’ll keep coming back. Having a loyalty program is one of the most effective ways to maintain customer engagement, but most small businesses don’t handle their loyalty programs in the correct way.
Does your point-of-sale system manage your reward program automatically, perhaps by assigning points to customers when they purchase products and giving discounts to customers when they reach a certain number of points? If so, your reward program is only minimally helpful to your business. It’s helping you capture customers’ contact information – phone numbers, email addresses or both – for your future marketing efforts, but there’s a good chance that your customers aren’t tracking their point totals and don’t even realize when they’ve earned rewards.
A good customer loyalty program keeps customers engaged and encourages them to buy from you rather than your competitors because they want to earn more points. To make that happen, you need to offer more than just discounts. For example, you could offer double reward points on days that are typically slow for your vape shop. You could also identify products that aren’t selling as well as you’d like and offer double points on those items. You can also increase engagement by creating a tiered reward program in which customers receive gifts or reward packages when they reach new tiers. The Dior reward program, for example, is a tiered program that’s worth emulating.