How Much Does a Vape Shop Make In a Year
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The vape industry has suddenly captivated the attention of countless entrepreneurs and business people all over the world. Rightfully so, as the numbers and sales projections are increasingly positive.
But the fact that the industry is growing and sales projections are assuring does not necessarily mean a vape store shares the same potential to be profitable. As with any other business in any industry, profitability will highly depend on execution and your business ability.
But there are a few industry-based statistics we can benchmark off to gauge precisely how profitable a vape store can be.
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Are Vape Stores Profitable?
Suppose we were to determine how much vape shops make a year. In that case, we'd have to get access to an average vape shop revenue in the U.S. While this data is challenging to obtain, we were able to find a 2015 vape shop index pulled together by ECigIntelligence, Roebling Research, and The Smoke-Free Alternatives Trade Association (SFATA).
The index analyzed the financial status and other market-relevant information for each of the 540 vape shops in the report.
Although the report is around six years old today, it still sheds light on valuable information like average vape shop revenue & how much do vape shops make a year.
The report included information about the more famous and widely spread vape shops. But this isn't a realistic view of what we want to achieve with this blog post.
So the information we want to concentrate on that's relevant to how much vape shops make a year is the overall average of independent vape shop revenue. More importantly, how they make their revenue and the types of products they sell.Independent vape shops earned a combined annual revenue of USD 1.5B in 2015.
While this doesn't say anything about average revenue per vape store, it does shed some light on a growing industry's profitability.
Sixty percent of that revenue was made with e-liquid sales. Of that portion of the sales, 50% of e-liquid sales were in the 3mg-6mg of nicotine levels.
From 2015 to 2021, the vape market share of marijuana has also increased, so nicotine e-liquid sales have likely shifted due to this.
That said, the vape industry regulations are an impending burden on vape shop owners as they are continually changing. However, most owners showed themselves optimistic in 2015, and with recent changes in cannabis legalization across the country, the future of the vapor industry is likely brighter still.
Average Vape Shop Revenue
The Vape Shop Index also showed that brick & mortar stores generated an average of $3,000 in annual sales per store.
It’s still challenging to determine the vape shop earnings you can expect when starting a vape company from scratch. This type of information is probably your best bet when it comes to making decisions.
However, you’ll be able to acquire access to actualized information online from reliable companies that are dedicated to collecting market data, which should be what you do if you’re taking this ‘starting a vape company’ thing seriously.
Especially if you consider that the data supplied above is already six years old, a lot can happen in an industry in that period, even more so in the vape industry.
Starting a Vape Company
While the average vape shop revenue in the U.S. stood along the lines of $26K back in 2015, a starting investment in a brand new vape shop could be anywhere between $25k-$50k, which would mean that a month’s worth of work would technically cover your starting investment.
The issue is now reaching the point where your vape shop earnings reach that revenue range.
Selling vape products is not the same when you start a business when you already have a brand that people know and look for, regardless of whether you run an online vape shop or a brick-and-mortar store. Chances are, you won’t make $26K from the get-go.
The amount of your initial investment could also vary depending on location and size of your retail operation. The main costs involved in running a vape shop are:
- Rent
- Licenses and Permits
- Vape Shop Insurance Fees
- Taxes
- Payroll
- Inventory
- Marketing Costs
There is also the option of going with a franchise vape store if you have a brick & mortar business—the costs, in that case, maybe between $10k-$20k.
But starting a vape company goes well beyond the costs involved.
You’ll also need to do quite a bit of planning and, likely, executing. This means that the investment is not only reflected in money but also in time. The first step is to write a business plan.
A well-crafted business plan must include an executive summary that explains the mission statement, general-purpose, highlights, products, services, financial information, and goals. The executive summary is written to provide a quick ‘guide’ of your company to potential investors or money lenders.
You’ll need to include other important information in your business plan: a company overview, a market analysis, detailed descriptions of products and services, marketing and sales strategies, and a detailed financial strategy with projections.
After that, you’ll have to register your business, which entails following FDA rules for sales of e-cigarettes and tobacco retailer and manufacturer regulations. On top of registering your business, you’ll also need to comply with vape industry regulations by applying for the correct licenses and permits.
Along with running a business, being legally licensed as a vape shop in the U.S. is probably the most challenging part of starting a new vape shop.
Once this step is dealt with, the only steps missing will be purchasing business insurance and securing funding.
Conclusion
There is no standard for how much vape shops make in a year. Running a profitable vape shop will depend on various factors, including location, size, number of employees, and of course, vape shop earnings.
An average vape shop revenue is a good piece of information to follow when deciding to start a vape business. But it’s not necessarily the most accurate because the same company could run many of the vape shops taken into account. Beginning a vape company and running it successfully will depend on your ability to execute several vital tasks.
References
[1] Home - Smoke Free Alternatives Trade Association. (2021). SFATA. https://www.sfata.org/
[2] ECigIntelligence. (2021, March 9). ECigIntelligence, Regulatory & market intelligence for e-cigarette market. https://ecigintelligence.com/
