Starting a Vape Shop

The Marketing Environment for the Vaping Industry

With the vaping trend becoming more and more popular, the oxford dictionaries recently incorporated the term “vape” as the word of the year. It is estimated that by 2025 the vaping industry will be at least worth $61.4 billion. For this reason, investors are eying the price, as this is a growing industry where starting a vaping shop now and in time to come will be a business to go for.

Further, the switch from the old school cigarrete smoking of tobacco can be attributed to the fact that the latter is regarded as more harmful compared to using the vape juice. As a result, a number of tobacco users continue to switch to vaping due to the rising of a more health-conscious population. Besides, vaping is even becoming more common with the legalization of marijuana in most of the states where they have since been integrated as part of the ingredients used in the e-liquids.

What’s more, as revealed through a research carried out by Quartz, there already exist nearly 2.7 million of vaping shops in most of the bowling alleys opened in the US. The shops continue to increase in number as the business trends in the smoking industry continue to change. The following are some of the key pointers that one should consider before starting a vape shop.

1. The Economics of starting the Vaping Business.

While starting the vape shop business would not be necessarily easy due to expenses from taxes and regulatory bodies such as FDA, the number of vape users suggest that it could turn out to be a very lucrative business after all. This is going by the 2016 statistics that estimated that by the time, there were already over 35 million vape juice users in the US alone. Consequentially, because of the high number of users, it means that the supply chain of the vape juice has to be in plenty, thus a business opportunity in the vaping industry.

2. The Amount required to pay of the Local Vape Taxes

One should consider checking on the tax requirement for operating a vape shop as the levy imposed on the businesses varies from state to state. For instance, the highest rates recorded in some given states are such as the 95% in Minnesota and 70% in Washington D.C. , which can really affect the profit margins of the entrepreneur , thus rending the business unviable.

3. Check the Business Registration Requirements

Some of the business registration requirements that one should consider checking before starting a vaping shop include FDA regulations, permit, and licensing besides checking the federal, state, and local laws. Furthermore, as per 2016 laws, the FDA regards the vaporizer (also known as the e-cigarettes) as tobacco, which means that a health hazard warning must be indicated in its advertisements and packaging. Again, modification of the vape juice such as mixing with loose tobacco must also follow the FDA tobacco manufactures and retail regulations. Other things to put to mind as an entrepreneur in the vaping industry are such as the local state laws about the product, fees, and protecting your business as an entity against lawsuits that may arise.

4. Insurance

Starting a vape shop requires high insurance fees where they are slightly higher than for the general policies of retail shops. While the average amount of small business owners go for around $591, the vape shop insurance policy can cost up to $711. The insurance fee is again determined by the business’ projected revenue, the property value, quantity of stock, and equipment. Equally important, there are some insurance brokers who specialize in vape shop products including vape juices, defective products, and health hazard as an insurance policy.

5. Know your Market

As a starter in the business, one needs to carry out a market research in the vaping industry to understand who are your customers and competitors. By carrying out research will help you know how to strategize on your business as some of your competitors could also be the traditional tobacco products where customers may want to switch to e-cigarette. For this reason, it is paramount for the vape shop entrepreneurs to find out the culture of the community and the political environment besides knowing what their customers are looking for in the vape juice to fulfill their needs.

Website Development Costs: Breakdown and Explanation

Website development costs can be incredibly hard to estimate.  The budget for your small business site will vary dramatically based on factors that include the number of pages, the available resources, the required capabilities, and whether eCommerce functionality or other special features are required.

If you’re trying to get a handle on the price of your new website, here’s what you need to know about the components involved in website development costs and how each is typically priced, based on numbers provided by Digital.com.  Although your site may not need all these elements, you can use the information to estimate a realistic web development budget.

Setup Costs

Every website needs certain essential components.  These include:

  • The domain name, which costs about $20 annually for a standard .com or .org address and up to $300 for a custom extension like .restaurant.  This is the address that customers type in their browser to visit your site.
  • Website hosting is the storage solution for all the files, images, and content that appear on your site.  Monthly hosting costs range from $10 to $200 per month ($120 to $2,400 per year).  Hosting costs rise as your site traffic rises.  Managed hosting, which provides additional services and features, is also more costly.
  • You’ll need a secure socket layer (SSL) certificate if you run an eCommerce site.  This technology protects consumer data from being intercepted during transmission and costs between $10 and $100 per month ($120 to $1,200 per year).  As with hosting, paying for a year in advance is more cost-effective.
  • The content management system (CMS) is the portal through which you’ll access and update your website content.  Many CMS options, including WordPress, are free.  If you need a custom CMS, however, it can cost up to $5,000.

Your total setup costs can be between $260 and $8,900 for the year.

Web Design Costs

Small business owners can choose from a few different options when it comes to website design.

  • To upgrade an older design to be responsive, meaning it automatically adjusts to the screen size of the viewer’s device, you’ll pay about $2,000.
  • A complete site redesign can cost between $1,000 and $20,000 depending on the features you need, the CMS you use, and other factors.
  • If you use a CMS like WordPress that supports themes, you may be able to use a free theme for your website.  Custom themes start at $10 and go up to about $200 depending on required functionality.  Most businesses need a theme with at least some degree of customization.

Your total website development costs for design are a one-time investment that can range from $200 to $20,000.

Online Marketing Costs

Although online marketing costs don’t necessarily need to be a part of your website development costs, these add-on expenses can make a major impact when it comes to driving traffic to your website, raising your search engine ranking, and improving your conversion rates.  Some of the line items in which you should consider investing include:

  • Search engine optimization (SEO) – Designed to help your site rank high on search engines for specific keywords, attracting more visitors and establishing you as an authority in your industry.  Although costs vary dramatically depending on the extent of your website content and the size of the company you choose, expect to pay an initial cost ranging from $3,000 to $9,000 and a monthly maintenance fee of about $200 to $500.
  • Conversion rate optimization – Focused on implementing features that encourage site visitors to interact with your brand.  Examples include calls to action, sign-up sheets, email newsletters, landing pages, and other interactive options that gather customer information and increase engagement with your content.  This strategy usually carries a one-time cost of $300 to $600.
  • Content writing and marketing services – Ensure that the information you provide stays fresh and offers your visitors value, another important component of SEO as well as a critical factor in building brand loyalty.  Budget approximately $300 to $500 a month for updated blogs and pages by a professional copywriter.  If you want to add elements like illustrations and video, you’ll likely pay around $1,000 a month depending on the volume of content you plan to produce.
  • Social media marketing – Designed to get all that outstanding content in front of your audience where they spend time – on their social media pages.  You can hire a dedicated individual on staff to post content to your pages and measure the ROI, or you can pay a professional social media agency a maintenance fee that can range from $250 to $2,500 a month.

Total online marketing costs can range from $3,000 to $10,000 up front, plus monthly costs of $750 to $4,000 depending on the site features you opt to implement.

Additional Considerations

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Image via Flickr by PlusLexia.com

Based on these website development costs, a small business can plan to invest a minimum of $3,500 to build a basic website, with monthly costs of at least $500.  Keep in mind, however, that every business is different.  If your funds for this project are limited, choose the site elements that are most important for your mission and use that framework as a starting point.  It’s okay to start small and grow the ideal website over time; many clients become bogged down with their vision of the perfect website, which creates an insurmountable roadblock to web development.

Ask yourself these questions before meeting with a potential developer:

  • Realistically, what is my budget?  How much can my business afford to spend on one-time and monthly website development costs?
  • Do I want to do some or all of the set-up and maintenance work myself, or do I want to have an ongoing contract with an agency that will administer the site long term?
  • What are my must-have-nows, must-have-laters, and might-want-in-the-future features?
  • What is my team’s level of tech savvy?  Do I have personnel who know some code and can find their way around a CMS?

At IronPlane, we specialize in smart, responsive eCommerce sites with outstanding customer support.  Services include website development on the Magento platform, as well as hosting on a cloud environment customized specifically for your business.  We can also review your code and take other steps to optimize your site.  Get in touch today for your eCommerce consultation.