There are two major categories of products in any vape shop and those are the hardware and the juice. The hardware we sell in our system is all, what we call, tank and battery system. Meaning that the tank and battery are sold separately, but can interchange. So, any tank will fit any battery in our system and vice versa. Also, our tanks are refillable (we have a few disposable ones) and our batteries our rechargeable. So once a customer makes an investment in hardware, he has bought into a “system” of hardware which allows easy upgradability. This is a big benefit to you as a franchisee and leads to repeat customers. In fact, if you do a good job on customer service, you will see your customers every one to two weeks, as they will be coming to you to buy coils and juice.
Our juice system is proprietary but based on a “Do It Yourself” or DIY system. As described below, this gives you lots of flexibility but also offers the least trouble operationally and the highest profit margins.
In order to fully illustrate the benefits to franchisees of how we do our hardware program, it is necessarily to contrast against something. So lets contrast against the problems you would have opening an independent, non-franchises, vape shop.
First, you would have to establish a reliable and dependable hardware supplier in China. There are thousands of them, but landing on a good one is a challenge. You could also rely on a US distributor, but you will be paying an upcharge for the privilege of being shielded from the Chinese ordering process. Once you have established a Chinese distributor them you must select and order your product. This is generally done via email and there are delays. Regrettably, most Chinese distributors require you to order in minimum order quantities (MOQ). So, even though you only need 10 of something, you may have to buy 50 to meet MOQ. Once you have your order built, you will wire money to China in advance of shipment. You will have to wire money as most Chinese distributors will not take a credit card. Then you will wait somewhere between 2 weeks and 8 weeks for your order to arrive. That is if it does not get delayed in customs. When your order arrives you will then find out how good of a distributor you have. Most, but not all, Chinese distributors buy factory over runs and defects…so hopefully the order does not contain many of those. As your vape shop gets bigger, you are then in a position to order from factories that manufacture product. This helps your quality but you get killed on the minimum order quantities. Some factories require that you order in MOQ’s of 100 pieces. Ordering a single SKU could costs thousands.
In our system, we completely shield you from this madness (although we live the dream every day!). To order in our system, you will go to our protected intranet ordering site. You have a wide and vast choice of hardware. All name brand and recognizable. You build your order just like you would on a normal website, checkout, pay with a credit card, and your order shows up in about 5 days (or faster if you specify). It is very easy to “price check” the products against advertised Chinese pricing. Our commitment to the system is to offer pricing that is comparable to landed Chinese pricing (meaning Chinese pricing plus shipping plus customs and duty charges) On the backend, we have established relationships with factories and major manufacturers in China. We order in large quantities and you benefit from lower pricing, a very simple process, and high quality.
Again, in order to fully appreciate our juice system, we need something to compare against. Again, lets consider the issues you would face as opening as an independent or non-franchised vape shop. First, you would need to determine who you were going to buy your wholesale juice from. Again, hundreds of choices, but you talk to friends that vape and narrow it down to 3. Now consider what you have to order from each supplier…so lets say you want 25 flavors from each supplier. Now you will have to order each of those 25 flavors in 5 iterations of nicotine (0,6,12,18,24). Lets say you order 50 bottles of each. That is 3 suppliers for 25 flavors each in 5 iterations of nicotine and 50 of each. So, you just ordered 18,750 bottles of juice. Generally the wholesale price of bottled juice is somewhere between $2.00 per bottle and $5.00 bottle. So, at a minimum you have spent $36,000+ just setting up your juice. Now consider the backroom nightmare of managing and dealing with 18,000+ bottles of juice!
In our system, you order a base mixture from us. You also order concentrated flavoring from us. This allows us to control the quality of our juice across our system. Additionally, we know every component in our juice and where it is sourced from…and we never source from China for juice. You never have to deal with mixing of nicotine. You deal with a pre mixed base. To create a flavor you simply add food flavoring to the base. This is very easy and allows you great flexibility. Generally, our stores carry between 100 and 150 concentrated flavors. Now imagine how clean of a back room this creates. Instead of dealing with ten of thousands of bottles, you are dealing with a base and 150 concentrated flavors…much easier! By offering concentrated flavors instead of pre-mixed flavors, this allows for huge numbers of combinations. So, for instance, if someone wanted a blue berry chocolate cheesecake flavor, you could make that on the spot for them. Our system also allows for very large profit margins. Again, we never tell you what to sell your juice for, but in our system you will have somewhere between $.75 and $1.00 as complete cost for a bottle of juice. Your juice represents between 40% and 50% of your sales.
With the introduction of the M-SYSTEM in October of 2013, we now have a system which allows you to cross over to the cannabis market. With the M-SYSTEM technology you can create several cannabis infused products which can be vaped in traditional electronic cigarette hardware. Whether your interest is the recreational market or the medical market, we have products that fit. Additionally, if you are in a state with a regulated marijuana program, we can assist you with proper licensing to sell these juices. In some cases this may be in a wholesale relationship and in some cases this may be in a retail relationship, but this is mainly driven by the laws of your state.
Also, depending on the laws of your state, you may be able to offer a CBD infused vape to your market. This may be possible, depending on your state, even if you do not have a regulated marijuana program.