Interestingly, vape sales skyrocketed during the pandemic and quarantine, and vape shops have continued to make an enormous profit. If you check how much do vape shops make in a year, you will realize how profitable this new business is.
The global vape market size was valued at 20.81 billion dollars in 2021, and only the revenue in the US was $17.46. If you plan to establish a new vaping business, the first step is calculating potential expenses, risks, and profits. Let’s take a look.
Is Keeping a Vape Store Profitable?
Everyone seems to know how profitable vape shops are, but no one has a clue how much money one average store can make a year. It is almost impossible to check an American vape shop’s revenue so that you can calculate it based on the vape shop index.
This index includes market-relevant information, like the financial status of the most famous vape shops. That is the first step in discovering the average income of independent stores.
For instance, independent vape shops had a combined annual income of 1.5 billion dollars in 2015, while this value went to 17.46 billion dollars in 2021. You can’t define the revenue per vape store, but this information shows this industry’s growth and profitability.
E-liquid sales made about 60% of their revenue, while half refers to juice containing 3 to 6 mg of nicotine. If you include recent changes in law referring cannabis legalization, you can guess that the vapor industry brings excellent possibilities for the future.
Let’s take a look at cooling flavored e-cigarettes sale from the beginning of 2017 to the end of 2021. Sales of this product increased from 1.5 to 12 million units in that period or a breathtaking 693%.
You can conclude how popular this vape type is based on the information about the percentage of their sales relative to total vape product sales. It doubled in only four years, increasing from 26.4% to 54.9%.
Let’s take a look at particular cooling flavors:
- Menthol sale percentage decreased from 94.5% to 73.0%
- The rate of prefilled cartridges with menthol-cooling flavors increased from 67.2% to 96.6%
- The rate of disposable e-cigarettes with non-menthol cooling flavors rose from 5.2% to an impressive 99.2%
Since more teenagers and young consumers switched from traditional cigarettes to vaping, the prices of products with lower nicotine levels have increased. On the other hand, e-cigarettes with high nicotine levels cost the same or even less in the same period.
As a result, sales of e-cigarettes with nicotine levels over 5% increased by 81% in the US in 2022. More than 90% were disposable e-cigarettes with the highest possible nicotine levels.
E-cigarettes revenue worldwide
|Year||Revenue in billions of US dollars|
About 46% of high schoolers vape nearly daily, and 52% of adults vape permanently or occasionally. With such demand, experts estimate that this industry can reach a value of 43.65 billion US dollars by 2028, following an annual growth rate of at least 16.5%.
On the other hand, some predictions are that the global vape market can reach an annual growth rate of 30.6% in that period. The most profitable regions, according to forecasts, are:
- North America
- Asia Pacific
- Latin America
- Middle East and Africa
The region with the highest consumption of vape products is currently North America. However, most experts predict that Asia Pacific will be the fastest-growing area from 2022 to 2028 regarding vaping.
The US is undoubtedly the most profitable county based on the estimated annual growth rate in vape sales. However, you can add a few other countries to this list, including:
- The UK
- South Korea
Nowadays, the key companies in the vape industry founded worldwide are:
- Altria Group, Inc.
- Shenzhen IVPS Technology Co. Ltd.
- Philip Morris International Inc.
- Shenzhen KangerTech Technology Co. Ltd.
- J. Reynolds Vapor Company
- Japan Tobacco Inc.
- International Vapor Group
- British American Tobacco
- Imperial Brands
- NicQuid; JUUL Labs, Inc.
How Much Does a Vape Shop Make?
You can find online that an average vape shop can earn approximately $24,000 to $39,000 a month when appropriately managed, but is that really so? Even though this new business is highly profitable, you shouldn’t expect to reach this sum in the beginning.
In fact, most statistics show that such a shop can have a daily income of $300 to $600 during the first two years of work. As you can see, it is lower than the $800 to $1,300 shown in public data.
However, a well-developed store can generate $1,200 to $1,600 in revenue, while big shops in large cities go to $4,000 or even $6,000 a day.
E-cigarettes revenue in the US
|Year||Revenue in billions of US dollars|
Unfortunately, you can’t count on all the money you earn. The only way to build a successful business is to share the profit based on the scheme:
- 25% for purchasing new goods
- 25% on wages
- 25% on utility bills
- 25% for the store improving
It takes several years of successful business management to count on additional profits.
Even though it can be tricky to determine the exact vape shop earnings, there is no doubt that this kind of shop has a bright future. On the other hand, this market has become highly competitive in the past few years, but increased demand promises that even new businesses can become successful over time.
In most cases, the profit depends on location and branding, as well as on creating and optimizing each particular vape shop. Additionally, it is vital to pay attention to the competition and marketing strategy, keep up with novelties, and adequately invest in quality customer service and inventory.
Factors That Affect the Vape Shop Profitability
It is necessary to check four crucial factors that can stand your vape shop out from the crowd and make it profitable.
Be prepared that competition in the vape industry is fierce, so there is a big chance to have one or more similar stores in the neighborhood. It is crucial to research the competition since larger stores can access stock at a lower cost and offer vapes at lower retail prices.
Finding reliable wholesaler vape suppliers is essential in this business, particularly when deciding to be an independent retailer. Such a decision affects how large each order can be and offer prices, significantly impacting your future profit.
Be aware that regulations considering vaping often change, so you must keep up to prevent legal problems and possible penalties. Running a non-compliant store will undoubtedly result in failure.
Your profit will range differently, depending on your selling policy. Deciding whether you want to sell your products only in your store or offer them online is vital. In the case of online selling possibility, you should establish reliable shipping. That can be challenging and requires extra time and effort, but it will pay off over time.
Starting a Vape Company
Once you start a new vape shop, you should count on a $25,000 to $50,000 starting investment. How much money you need depends on a few factors:
- Licenses and permits
- Insurance fees
- Marketing costs
Another option is to go with a franchise vape store when the initial starting investment is approximately $10,000 to $20,000.
Besides money, you should also spend time preparing appropriate conditions that will make your business successful.
- Do market research
- Prepare a realistic business plan in detail and calculate startup costs
- Check regulations in your State
- Register your business and get the permits
- Pick out a desirable shop location
- Get quality store inventory and find reliable suppliers
- Establish a quality POS system
- Build a brand through social media
- Hire quality staff, provide a welcoming atmosphere, and optimize the support service
Maximum and minimum vape shop salary in the US by States
The next thing to consider is the reliable staff. If you plan to open a small shop, you will probably work on your own, but bigger stores require hiring salespeople. In that case, you should calculate their salaries in your list of expenses.
Maximum and minimum vape shop salary in the US by city
|Salary||Green River, WY||Sacramento, CA|
In most cases, the hourly rate ranges from a minimal $9.63 in North Carolina to a maximum of $16.18 in Washington. However, you should count on higher numbers in a few big cities. For instance, the hourly rate in Green River, WY, is over $18.
Since sales projections for vape sales are increasingly optimistic, opening your own shop is an excellent idea. A vape store can be highly profitable, but you should be careful. Always keep in mind that it depends on more than only a trend but on a good location and your business abilities.