The U.S. e-cigarette market, projected to hit $9.4 billion in 2025 (yes, billion), presents a major opportunity for entrepreneurs who want to learn how to sell vapes.
But before stocking up on vape flavors, you need to familiarize yourself with the essentials — from industry regulations to market trends to product strategies — to build a profitable and compliant business.
This quick guide covers all the practical steps of owning and operating a vape shop, including pricing, marketing, technology, and more.
Abiding by federal and state regulations when selling vapes is a non-negotiable — but it can quickly get confusing with frequent rule changes and unclear, state-specific documentation.
At the federal level, the FDA has broad oversight of tobacco products, which includes e-cigarettes and vapes. Necessary regulations to note include:
- The Tobacco 21 law, implemented in 2019, increased the minimum age for tobacco sales (including vapes) from 18 to 21.
- The Tobacco Control Act allows the U.S. Food and Drug Administration to regulate the manufacturing, marketing, and distribution of tobacco products.
- Health warning requirements mandate the display of specific health warning statements in vape advertisements.
To help retailers better understand these federal regulations, the FDA offers a program called "This Is Our Watch," which provides educational resources and tools. (Check out the FDA’s website for more information and access their toolkit.)
Beyond federal regulations, state and local regulations add another layer of complexity. In general, you need to obtain standard business licenses, like an operating license, and comply with building codes.
Here are a few vape-specific regulations to consider:
- Some states and cities have implemented flavor bans, restricting the sale of certain flavored e-cigarettes. For example, California and New York have banned most flavors except for tobacco and menthol.
- Premarket Tobacco Product Application (PMTA) registration laws require FDA approval for e-cigarette products before being sold in some states (e.g. Alabama, Louisiana).
- Taxation policies also vary widely, with some states imposing high taxes on e-cigarettes (e.g. California, Vermont) and others having lower rates.
When in doubt, verify your local and state rules for any additional requirements. You can assess the current regulatory climate through tools like the Consumer Choice Center’s Vaping Index, which gives a snapshot of how friendly each state is towards e-cigarette businesses.
Tips for Legal Compliance
Here are some suggestions to keep your store operating efficiently and legally when selling vapes:
- Review regulations: Frequently assess regulations for packaging, taxation, and licensing for your state, as these rules change frequently.
- Use age-verification technology: Invest in ID scanners or other reliable hardware to verify customer ages.
- Display required warnings and signage: Prominently display all necessary health warnings and other mandated information throughout your store and products.
- Partner with compliant suppliers: Work with suppliers who follow all applicable FDA and local regulations, especially regarding PMTA requirements.
Regardless of your location, responsible retailing is paramount. Establish clear internal policies for age verification and product handling, maintain accurate sales records, and actively monitor regulatory updates.
A vape-specific point of sale (POS) system provides accurate records for compliance purposes, tracks product sales to identify potential issues, and even integrates with age-verification technology for secure transactions.
Related Read: The Official Guide to Tobacco POS Systems
Developing a Product Strategy
To succeed in the vape market, you need a strong product strategy to understand what your customers want, identify emerging trends, and curate a selection that sets your shop apart.
The first step is to recognize vape users’ diverse needs and preferences. Some customers prioritize convenience and portability, which explains the popularity of disposable vapes. Others seek a more personalized experience with refillable devices and a wide range of e-liquid flavors or alternative products like CBD or legal THC blends.
Keep these points in mind as you develop a product strategy catering to your diverse audience:
- Research trending products: Stay informed about the latest disposable vape options, nicotine-free e-liquids, and alternative formulations.
- Offer a variety of flavors and nicotine strengths: Provide a broad selection to satisfy different tastes and preferences, from classic tobacco and menthol to fruity and dessert-inspired options.
- Stock a range of hardware options: Include starter kits for beginners, pod systems for convenience, and advanced mods for experienced vapers.
- Curate a selection of accessories: Don’t overlook the importance of accessories like chargers, cases, coils, and replacement pods.
Beyond these basics, it’s crucial to stay aware of emerging trends. For example, disposable vapes are a major category, as well as devices with long battery life, high puff counts, and even eco-friendly designs.
Related Read: High-Risk POS for Vape: 3 Top Smoke Shop Providers
Tips for Your Product Strategy
Consider these tips to develop an effective product strategy:
- Conduct thorough market research: Analyze customer demographics, preferences, and purchasing behavior to identify the most in-demand products.
- Prioritize product quality and authenticity: Stock high-quality, genuine products from reputable manufacturers to build trust and avoid counterfeit issues.
- Cater to different customer segments: Offer a diverse selection of products to appeal to beginners, experienced vapers, and those interested in specific niches (e.g. flavor enthusiasts, cloud chasers).
- Consider sustainability and ethical sourcing: Include products made with environmentally-friendly or ethically-sourced materials, as this is increasingly important to many consumers.
Understanding how to sell vapes requires a well-informed, customer-centric product strategy that meets diverse needs and drives sustainable business growth.
Implementing Effective Pricing
To determine the best price for your products, you should identify the sweet spot between covering costs and making a profit while still attracting customers.
Start with market research to understand your target customers: Who are you trying to reach, and what are they willing to pay? If you’re focusing on budget-conscious customers, for example, offer more competitive pricing on basic items. Alternatively, if you’re catering to vape enthusiasts who want premium products, you might be able to charge more.
After determining your target audience, conduct a thorough cost analysis by calculating your wholesale prices, production costs, overhead expenses (e.g. rent, utilities, salaries), and your desired profit margins.
Tips for Effective Pricing
Here are some key pricing strategies to help you balance costs and customer expectations:
- Communicate product benefits: Highlight your products’ unique features, quality, and advantages.
- Develop perceived value: Use attractive packaging, displays, and branding to justify your pricing and differentiate your shop from other stores.
- Try A/B test pricing strategies: Experiment with subtle price variations on certain products to gauge customer response and identify optimal price points.
- Consider tiered pricing: Implement different price levels for various product lines (e.g. budget-friendly vs. premium) to cater to diverse customer segments.
- Sign up customers for loyalty programs: Offer exclusive discounts to loyalty program members to encourage repeat business.
Related Read: How To Implement a Successful Tobacco Rewards Program: 6 Simple Steps
Pricing is all about creating perceived value — you need to demonstrate to customers that your products’ prices reflect the quality and the experience your store provides.
Consider using your POS system to track sales by product and customer segment, as this provides valuable data for refining your pricing strategy. You might explore dynamic pricing tools that automatically adjust prices based on real-time factors like inventory levels and competitor pricing.
Utilizing Marketing & Promotions
You can't just open your doors and expect customers to find you. Effective marketing and promotional strategies help you attract customers, build a loyal following, and ultimately, drive more sales.
A good starting point is identifying your brand identity, which encompasses everything from your shop's name and logo to its overall aesthetic and the feeling you want to evoke.
What makes your shop unique? Is it the product selection, the atmosphere, or your staff's expertise? Make sure your branding clearly communicates that unique value to your customers.
Once you've solidified your branding, it’s time to consider the specific marketing tactics that will resonate best with your target audience.
Related Read: Digital Marketing for Vape Stores: Tips, Tools, and Regulations
Tips for Marketing & Promotions
Here are some additional marketing strategies to consider:
- Utilize social media: Use platforms like Instagram and Facebook to connect with a broader customer base and showcase new products or limited-time promotions via Instagram Reels or Facebook Stories.
- Implement email marketing: Collect customer email addresses (offer incentives for sign-ups) and send newsletters, promotions, and exclusive offers to keep them engaged.
- Leverage customer reviews: Actively solicit reviews from satisfied customers on platforms like Google and Yelp, and prominently feature positive quotes or stories on your website and social media to build trust.
- Offer exclusive online deals: Drive online sales or in-store visits by providing unique discount codes or promotions only available through your website or social media channels.
By implementing a comprehensive marketing and promotion strategy, you can build a strong brand, connect with your core audience, and drive sustainable business for your vape shop.
Key Takeaways on How To Sell Vapes
Knowing how to sell vapes effectively requires a comprehensive approach. Consider everything from shifting regulations and compliance to curating a product selection and pricing strategy that meets your target customers’ needs. That’s where the latest technology makes things easier, especially a specialized POS system like Cigars POS.
Cigars POS handles all the time-consuming details, with features for real-time inventory and sales tracking, automated loyalty programs, and organized customer records, freeing you up to focus on building stronger customer relationships.
Schedule a free Cigars POS demo to see how our solution helps you run a more productive — and profitable — vape shop.
