The Money Side of Starting A Vape Shop
Last year the word “vape” was determined as the word of the year last year because of how fast the industry took off and became so popular within the mainstream society. ANd it seems to be that this is not just a trend, economists believe that this is something that is going to stick around for a long time yet. In fact, they project that by the year 2025 the industry will be worth upwards of $61.4 billion dollars. This type of money makes new entrepreneurs, new and along in the saddle alike, want to find a way to get into the industry and make a handsome profit off of a vape store.
Vaping has become increasingly popular thanks to society’s push to consciously get rid of traditional cigarettes. Research has found that though vaping is not necessarily healthy, it is by far a healthier option than smoking cigarettes. It also gained even more popularity after marijuana started becoming legal to smoke in a few states. As marijuana has become legalized, vaporizers were made specifically for the smoking of marijuana. As it becomes legal in more states, more of these vaporizers sell.
The vaping industry has become so popular that the business world cannot turn its back on it anymore as it continues to be the biggest growing business trend today. So, if you are thinking that you want to start a vape shop, there are a few economic factors you need to think about before starting your business.
The Economics of Your New Vape Shop
Starting any business big or small is going to take a lot of hard work and thanks to things like FDA regulations, taxes, and other logistics, it can be challenging. Vape stores pose an even more unique of a challenge. If, despite the challenges, you still want to be your community’s vape supplier, following certain steps can help you.
Look at your state and local taxes
Depending on where you live, you can expect to have to pay some pretty hefty taces for your vape products especially if you are planning on opening a physical location. There are currently no federal excise taxes on products like vaporizers and vape juice, but vape juice and other vape products are taxed at the state and local levels of government. These taxes can make running a vape shop incredibly expensive, making shop owners have to hike up their prices which can potentially turn away business before they even get any.
Think about the licenses you will have to get
If you look at your tax prices at the local and state level and figure out your budget can swing it, you then need to look at the business laws at the federal, state, and local level. Since the FDA considers there to be tobacco in the vape juice of e-cigarettes, you have to comply with their regulations on how to sell them.
There are also strict regulations that you will have to follow if you plan to mix your vape juices and make your own concoctions, or if you try to modify vaporizers.
Depending on the state that you are opening your store in, you may have to obtain extra licenses and permits in order to operate your vape shop. Fees for these permits may vary, and not getting them can stack up on some serious fees as well.
Think about your start-up costs
No matter what industry you are starting your business in, as a new business owner, you will need to save up funds that are going to occur when you open a physical location. You will have to think about costs like a business account, a location, a supplier for your store, marketing campaigns, staff costs, and the cost of stocking your inventory. When you first open up your vape store it is recommended to have the basics like hardware, replacement coils, vape juice, vaporizer batteries, chargers, and different vaporizers. Going through a wholesale supplier can save you money on your inventory!
In 2013, a business report came out which estimates that it takes a minimum of $7.,000-$10,000 on a monthly basis to operate your store not including stocking the products. However, it is recommended that you have a $50,000 cushion to use to open your shop.
Cost of insurance
Your vape shop will need a really good insurance policy and that needs to be factored into your start-up and monthly budget. Look around at niche insurance brokers to find the best policy for you that will give you the best bang for your buck!