Over the past five years, vape shops have become very popular businesses
as more and more people seek to stop smoking traditional cigarettes. Although
the taping is not exactly the most healthy thing that a person can do, it is
believed that it is far better than smoking tobacco cigarettes. As such, these
businesses have exploded in demand for electronic cigarettes and related
products. The startup costs associated with the new vape shop are relatively
low, and these businesses can be founded for as little as $50,000 was much as
$150,000 depending on the location and the amount of inventory that is going to
be carried. One of the key strengths related to these businesses is that they
typically are able to generate a substantial repeat customer base once they
establish operations. The gross margins from sales ranges from 50% to 70%
depending on the specific products offered by the business.
As it relates to weaknesses, vape shops are
required to adhere to all laws as it relates the sale of tobacco and tobacco-related
products. As such, procedures and protocols need to be put in place in order to
prevent people under the state minimum age from purchasing these products. The
retail sales space associated with these businesses can also be somewhat of a
high expense especially in a highly trafficked area.
For opportunities, these businesses can readily
expand by simply establishing additional locations outside of the initial
target market. For vape shops, this is typically the only way that these
businesses are able to expand and less the business develops an online
platform. It should be noted that only certain products relating to this
product line can be offered in an online capacity as per regulation.
For threats, outside of major competitive issues
are is really nothing that is going to impact the way that these businesses
conduct their operations. Of course, strong procedures need to be put in place
in order to ensure that the business is able to remain within the letter of the
law at all times. During times of economic recession, most vape shops are able
to remain profitable and cash flow positive is this is typically considered a
product that is part of a person’s lifestyle. Additionally, this is a
relatively low cost product line that is in continued demand among the general
public.
Vape shops can be a highly profitable small
business enterprise for an entrepreneur that has extensive experience in the
field of retail management. These businesses are enjoying a very substantial
rate of growth which is expected to continue in perpetuity as people stop
smoking.
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