­So You Want To Start A Smoke Shop

­So You Want to Start a Smoke Shop

­So You Want to Start a Smoke Shop

For anyone who’s been thinking about opening a smoke shop, 2018 might be the perfect time.  With many states passing cannabis-tolerant legislation, and with the explosion in popularity of vaping, e-cigarettes, and hookahs, the opportunities for business entrepreneurs in this market has increased dramatically in the past decade.  Even with declining tobacco use, the success of the non-tobacco market has more than compensated for slower tobacco sales. Smoke shops have positioned themselves to become one of the more popular business start-ups in the country.

The question then is simple: What kind of smoke shop should you open? Are you leaning towards a traditional brick-and-mortar shop, or an online store? Should you go the time-honored route and open a physical building that offers plenty of visibility and foot traffic? Or should you take advantage of the benefits that an efficient and accessible online store can provide?

Here is an examination of the pros and cons of each type of market. We have included information that will help  entrepreneurs discover what kind of store is best-suited for his particular business goals.

Brick-and-Mortar ­So You Want to Start a Smoke Shop

Pros:

Traditional brick-and-mortar stores offer customers high visibility for a variety of products and merchandise. Being able to see and choose what you want from a wealth of inventory is a benefit that retail customers value highly.  For retailers in popular downtown areas that attract a lot of foot-traffic, brick-and-mortar stores can be very effective markets for sustaining successful businesses.  Also, cities that are looking to increase the retail business in specific areas are often willing to incentivize vacated locations for potential buyers, offering tax breaks and reduced costs in attempts to attract entrepreneurial interests.  Brick-and-mortar stores can be particularly effective at establishing customer loyalty. This can be easily established by attractively displayed and high quality customer service.  Attracting and keeping customers is essential for the long-term success of a brick-and-mortar store.

Cons:

The cost of starting a brick-and-mortar store is not insignificant, however.  The following is a list of what it takes to successfully operate a location:

  • Maintaining inventories,
  • Maintaining reliable staff ,
  • Product licensing,
  • Physical costs (rent, insurance, utility bills, etc),
  • Marketing and advertising,
  • Inspection/code fees,

Based on current research, these cost have recently increased as there has been a influx “downtown” traffic. This has resulted in an increase in competition and therefor cost of living. More explicitly, there has been a shift of population from the suburbs to the city. Many of the nation’s young professionals has had a direct impact on the feasibility of operating a downtown business without heavy investment.  Plus, competition from online sources have had a negative influence on the foot traffic brick-and-mortar store’s.

Online Stores ­So You Want to Start a Smoke Shop

Pros:

Online sales in the United States have shown rapid growth in the past decade. In particular, each quarterly report since 2010 has showed unflagging increases.  Current online sales account for nearly 10% of all sales, and economic forecasters predict continued growth in this sector.  Subsequently, the benefits to operating an online store are vast, including cheaper prices, greater selection, and no employee costs.  Additionally, the set-up of an online shop is a relatively pain-free process. When entrepreneur uses a service like Smoshe, they can establish an online store in minutes.

Online smoke shops are attractive to customers for their affordability, selection, and the user-friendly ease of ordering from a website.  For the business owner, online shops can eliminate many of the challenges that staffing a traditional brick-and-mortar shop can entail, and the reduced operating costs can lead to greater profitability and more relaxed margins.

Cons:

A common drawback to operating an online store is the “immediacy” effect. Though online shopping is at an all time high, many still like the idea of having product in hand after a transaction. Some customers don’t like to have to wait 3-5 days for their products to be delivered. It should be noted, though, that the continued success of online delivery companies like Amazon Prime has shown that Americans are becoming increasingly more willing to sacrifice immediacy for the benefits and ease of online purchasing.  However, some customers still value the physical process of shopping at a store and returning with the item of value immediately.

There are shipping and return costs to factor in as well. It is essential for an online smoke shop to offer competitive prices for delivery and packaging.  Therefore, many of these costs can be mitigated by maintaining bulk accounts with delivery services that offer reduced rates.

Another drawback to operating an online smoke shop is that some major marketplaces restrict tobacco and smoking products from being sold on their websites.  PayPal, Skrill, and Apple Pay, for example, do not allow the processing of tobacco products with their services.

Using Smoshe

To combat these challenges, a business entrepreneur can use the services of Smoshe, an online company that helps eliminates these restrictions.  Smoshe works with business owners by providing an online location that eliminates the necessity of purchasing a domain and obtaining hosting for the domain, in addition to website security features, like SSL.  Smoshe also has a credit card processor already in place. This means that sellers no longer has to worry about the restrictions in place for services like PayPal and Apple Pay.  In addition, Smoshe provides advertising and marketing services for all of its customers.  And since Google doesn’t allow smoke shops to use Google AdWords, Smoshe creates original content which increases their visibility via Google ranking.  Smoshe provides an easy-to-use, one-stop shop that allows business owners to set up an effective online smoke shop in minutes. If profitability and ease-of-use are important to your budding business, look no further.

The Bottom Line

In specific instances, like having a smoke shop in a heavily-trafficked area that has relatively low maintenance costs, brick-and-mortar shops can be effective business models.  However, online stores have greater potential for continued success, especially in an era when online sales are projected to continue to grab more of the marketplace.  Moreover, online smoke shop owners can reduce many of the headaches associated with starting a business by taking advantage of the suite of services offered by Smoshe.

Until Next Time..

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