Vapor / eCig Industry:  Converting High Performance Mod Window Shoppers

Vapor / eCig Industry: Converting High Performance Mod Window Shoppers

Everybody wants to get the best deal.

In recent weeks I have had several discussions with my clients who own ecig retail and wholesale businesses regarding a particular challenge. Their vapor customers have begun to use their establishments as a ‘window shopping’ resource where they identify the devices they would like to have, then ultimately end up purchasing from somewhere else (usually online).  Their high performance mod sales are down and uncertainty has begun to set in. Fortunately there are specific things which can be done to address this issue which can be effective for retailers as well as wholesalers.

Over the past few years I have had the opportunity to work with many vapor industry business owners across the country, some of which have created tremendously successful businesses and others which have struggled to keep their doors open.  As the business development manager for a vapor hardware distribution company, I had the opportunity to collaborate with the owners of these businesses on a daily basis.  In that role I began to notice some commonalities among the most successful of the bunch and now that I work with many of these same companies in a somewhat different capacity, the traits which the most successful owners have in common have begun to stand out.

One of these traits which relates particularly to declining high performance mod / hardware sales, is having the ability to identify market trends and adapt accordingly.  In fact, I have found the most successful tend to be the ones who identify market trends which most vapor industry business owners would see as negative and are able to reframe these ideas in ways which are beneficial to their business.   In recent weeks I have had several discussions with my vapor industry clients regarding decreases in high performance mod sales and felt this would be a good opportunity to offer some suggestions to those having the same experience. Before I get into that, it is important to consider the bigger picture of what is actually taking place.

High Performance Device Trends

I departed from the vapor hardware distribution business to develop FogPusher nearly one year ago.  At that time the 70w iSticks were just coming to market and that was the most powerful device of its size available at that time.  The industry has obviously been moving towards smaller, more powerful devices however, I’m not certain that even five years ago anybody could have predicted that 200w devices of that same size or that single 18650 devices which output over 100 watts would be available now.  Improvements in battery and circuit technology have enabled the development of some of these tiny, powerful devices which are available today yet would have been considered hocus pocus only a few years ago. Since the technology required to develop these devices is still fairly new and the manufacturers who have access to it are still somewhat limited, the devices cost more.  They are more expensive to manufacture.

Why is this important?  Because every vapor customer, whether they are a seasoned vaping professionals or just getting started, want the best value they can afford when purchasing a new mod and the most valuable devices are expensive. Your customers, whether retailers or end-users, know there are online resources where they can find these products for less than what you can sell them for and likely close to what you can buy them for. In making a strictly dollar-for-dollar comparison it is impossible for you to compete.  So is it time to pack up shop and find a new business?  Not for most.  Regardless of whether you are a retailer or wholesaler, you are not going to be the cheapest in the entire world.  You CAN however, identify means of providing value in ways which justify your customer’s decision to purchase from you.

Additionally, consider what has happened in the computer business over the past 50 years.  Computers which used to take up entire rooms have now been far surpassed in power, memory and everything else, by mobile phones and these devices cost a very small fraction of what they previously did.  In

The Vapor Industry is Changing and You Must Adapt: Survival of the Fittest

For many of my clients in the vapor industry, mod sales seem to have taken a sudden dip – more so in recent months than ever before.   Some of them own vape shops, wholesale operations and others have tobacco, cigar shops and even convenience stores which also carry hardware. Luckily, there are things you can do about the situation. First it is important to realize – and get very clear about – the fact that the industry is changing and now may be the right time to reconsider your business model and overall strategy, particularly in regard to high end mod sales.

Anatolian Mods SP DNA40 - FogPusher

Converting High Performance Mod Window Shoppers

Identify and clarify your value proposition.

What value can you offer to the customer that online vendors are unable to offer or that will be more convenient for the customer?  Make sure this is clear when customers come in to look at higher end mods.

Do you offer in-store exchanges?  Returns?  Additional services outside of strictly selling them the hardware product?  Assume that the customer is going to look up online prices immediately after leaving your store.  If they are genuinely interested and do not buy it then, you can pretty much guarantee that they will anyway. Can you blame them though?  If a retail customer is shopping a $100+ device and they can save $50 buying online and cannot justify the additional expense with anything they are aware you are offering, it probably doesn’t make sense for them NOT to take the time to find the better deal.  Make sure your added-value is very clear when customers are shopping.

For wholesalers, the idea is basically the same.   Shortly after I started working in the vapor hardware wholesale business I realized that my literal objective was to increase revenue but the most effective way to do that was to help my retail business customers grow their business.   This was one of the strategies which I learned as a sales manager in the high end building material manufacturing industry which translated very nicely into the vapor industry.  Once I made it a point to go out of my way to help my customers grow their business, the entire game changed.   If you are in the vapor wholesale business, pay attention to the strategies your most successful customers are using and use your observation to help the retailers who need it.  Your product might be hardware or juice but your real value is found in the resources you have available to you which you can use to help your customers grow their businesses.

If the situation is severe, make your profit on eLiquid instead.

This one might suck to think about but if your higher end mod sales have suddenly taken a 50% or more plunge, it may be time to start thinking about including eliquid with a full price purchase of your higher end mods.  Make the same amount of profit but include something additional with the purchase.

Let’s say, if you are a retailer and have purchased devices which cost $65 each with shipping and you have them for sale for $110.   $55 profit per device.  You sell 30ml eLiquid bottles with a $15 profit per bottle.   Maybe include 3-4 30ml bottles with the full price purchase.   You’re likely saying to yourself, “I would rather not give away my mods at cost” and I certainly concur.  However, if you are one of the businesses which is seeing their customers window shop then buy online, what is the alternative?

If your retail business has seen a tremendous drop in mod sales and you do not make a change to adapt to your customer’s online buying habits, you are going to get stuck with soon to be outdated devices and may not even get the eLiquid sale.   This way you get   both sales, make some profit and retain a customer who will likely recommend your business and keep coming back.

If you are in this situation and feel this might be the right solution for you, try it for a day and see what happens. Better yet, try it with a single customer.  The great thing about all of this is that none of it has to be set in stone.  See how it works and go from there.  Chances are, as technology continues to improve and devices become more readily available manufacturer-direct, you will soon make the majority of your profit on eliquid sales anyway, if you are not already.  It may be time to start preparing.

Find ways to get rid of any high performance mods which are even slightly outdated, ideally in ways that will help you sell more eliquid.

This is particularly important but if you have been fortunate enough to not get stuck with outdated devices then this article is likely not of much use to you anyway.  Most retailers and wholesalers seem to have an inventory of mechanical mods they wish they could give away to make more room.   If you have an abundance of devices which were big in 2014, it may be time to start looking at ways to use them to bring more traffic to your shop via social media contests, giveaways, etc…

I have seen the consequences of having an enormous inventory of outdated product in stock and it gave me a new perspective on ‘breaking even’ or taking a slight loss on these products (If you still have an abundance of Kanger Protank II’s and III’s or first generation mechanical mods in stock, you likely know exactly what I mean).   There IS something worse than breaking even or taking a slight loss and it’s called never being able to sell your inventory, even if you started donating it.

If you can find ways to stimulate traffic or sell more juice using your outdated inventory, do it while you still can.  If you don’t you may find yourself calling Salvation Army to inquire on vape hardware donation tax write-offs.  I have actually never personally tried this but if you have, let me know how that worked out.  I have literally researched everything from scrapping the materials used to make outdated products to offering them to customers for free.  There are some things in this world which people do not want even if you give it to them for free.  I advise against letting outdated inventory reach that point if you can avoid it.

Set up a game plan to check and re-check your eliquid and hardware suppliers.  Make sure you are selling product that people want or even better, product they don’t know they want yet.

It might seem like a no brainer but you might also be surprised.   The industry is full of innovation these days and whether you manufacture your own eliquid or resell other brands, you want to make sure you are going about it in the most effective manner possible, while providing your customers with the best value for their money.

Vapers are typically technologically inclined individuals and many of them spend their free time on forums or blogs discussing the latest in eliquid and mod technology.  You definitely want to make sure you are offering the latest and greatest (within reasonable limits).  It can be expensive and difficult to keep up with the latest mods but as long as you have a few really awesome products to choose from, this may not even be as important as the juice is.  Make sure your juice is on point.

Overview

This article is not intended to present a doom and gloom situation but rather to offer means of going about solving issues which several of my customers seem to be experiencing.  I have worked in the vapor industry for the last few years and many of my SEO / online marketing / web design clients consist of vape shop and wholesale owners.   Since I work with businesses in the vapor industry from across the country, I also have many valuable contacts which may be of value to your business as well.

To learn more about what I can do for your business, please request a free digital marketing report or contact me and I am more than happy to talk with you about specific things we can do to increase traffic to your business and/or help it run more efficiently.

TTFN.

Your Local Business v. Online Competition – Are You Even In the Game?

Your Local Business v. Online Competition – Are You Even In the Game?

Regardless of the industry, today, more than ever before, there exists a massive  amount of online and offline competition (the ‘Fog’ if you will) which must be properly addressed in order for your business to survive.  

This is particularly true for industries in which your competitors have revolutionized the way business is conducted, making life less expensive and/or faster (possibly better) for customers.  The mortgage/real estate industry is a perfect example of this.  If you are looking to generate mortgage or real estate leads then you need to make sure you are ahead of the market learning curve. 

If you do not have the consistent foot traffic you would like to have (or XYZ competitor down is having) then be grateful your doors are still open!  It’s time to do yourself a favor and get your arms around the depth of the problem at hand.

These tests are a bare minimum, however, for those of you less technologically inclined, it should be a good starting reference point.  

Be patient and follow the steps. 

If you are a brick & mortar business owner, the more difficulty you have doing this equates to the greater likelihood that you probably need it the most.

This is not for everybody.  Don’t tell me I didn’t warn you if you continue reading.

Disclaimer: My primary objective is to provide local businesses with resources to effectively compete, not to discourage you.  Brick & Mortar business owners are MY business.  In order to effectively compete, we must first understand the nature of the competition. In doing so, my obligation is to provide straight-forward facts and resources.  Necessary self-evaluation is usually not much fun but better now than when it’s too late.

1st Test

The effectiveness (or presence) of your business’ online existence.  Is it actually working FOR you?

If you haven’t noticed how much time your customers are spending on their phones, then do yourself a favor and pay attention.  Humans have evolved into mobile creatures and their mobile device is their second brain.

With that being said, a website in and of itself is not going to do a lot for you.

There are many websites out there and if yours is not positioned & designed correctly with the right content and strategically placed throughout the web, it’s not going to be found.  In many cases, you are going to be better off not even having one.

Additionally, not only does every aspect of your online marketing need to be congruent with your website, meanwhile directing traffic back to it, but it needs to be responsive (mobile-friendly), descriptive, and original – among other things.

How to check:

(This is just a very basic surface-level method for anybody to check.  I provide a much more in-depth analysis in my free consultation but hopefully, this will help paint the picture for those less technically inclined.)

  1. Pick up your phone (or anybody’s phone). Log out of your Google account (or anybody’s for that matter, but ask permission first). Visit Google and search for your type of business and your zip code. I.e.:  if you own a vape shop search “vape shop” and your zip code (vape shop 73118, vape shop 93102, etc… ).  If you are a dentist, nightclub, lawyer, smoke shop, tobacco shop, search for that and your zip code.  Does your business appear on the first page? Does it appear anywhere?
  2. Do the same for alternatives for searching for your general business i.e.: for a vape shop try vapor shop 73118, vaping accessories 73118, etc…  If you’re a dentist try maybe dental services 73118, oral hygienist 73118, etc…   Does your business appear on the first page?  Does it appear at all?
  3. Repeat steps 1 and 2 from a laptop or desktop computer.  Does your business appear in the first page?  Does your business appear at all?  (Search results may vary dependent upon where the actual search is taking place and your device’s local search settings.  Search results will definitely vary if you are logged into your Gmail / Google account as your results are personalized to your previous searches when you are logged in.)
  4. Repeat both processes, except this time, use your city instead of your zip code.  Do you come up in the first page?  Do you appear at all?

If you’re satisfied with your business’ Google search results that’s great! Proceed to next section.

If not, then you may want to contact me for a free consultation.  Feel free to do so now or proceed.

2nd Test

Check Up from the Neck Up

Business owners have more options as to the choice of their product and service providers today than they have in the past.

 

If your staff is not giving off the good vibes with a welcoming (much different than ‘in-your-face’)  attitude then there is a good chance you are feeding your online competitors (or even worse, the ones down the street) with a steady flow of business.

However, local shops DO have the ability to provide some distinct competitive advantages over online competitors including the abilities to:

  • Allow customers to experience a more hands-on, personable buying process.
  • An experience which is (ideally) more pleasant than clicking around online.
  • Provide products or services immediately vs. having to wait for mail delays.
  • Accept cash.
  • Possibly easier return process.
  • From a marketing perspective, get discovered easier and more frequently by local customers – especially when user is conducting a local searchFortunately, localization has become a priority among the major search engines as they strive to find the most relevant search results for the particular user.

These are real advantages, however, keep in mind that one bad customer interaction will make these advantages less advantageous.  Especially, considering online shopping venues have the potential advantages of:

  • Allowing for cheaper purchases (much cheaper in some industries).
  • Providing a personalized online shopping experience by saving the customer’s  previous shopping cart and effortlessly directing them towards the same purchase and effortless cross-sales presentation.
  • Allowing the customer to not have to deal with real people whatsoever or drive anywhere to shop.
  • Depending on the location of the online retailer, 1-3 day USPS shipping (could become quicker for products if Amazon has anything to say about it).  Free shipping in many cases.
  • In the medical industry, customers now have the choice of seeing a healthcare provider from the comfort of their couch, via webcam.

With that being said, it is extremely important to make sure you and your employees are able to leave their fights with their girlfriends or their political upheavals at home.  Failure to do so is costing you money – possibly in a great way.

How to Check:

  1. Search your business name on Yelp.com.  Are you listed?  Are there bad reviews?  If you’re not listed then that could be a major issue.  If you have bad reviews then pay attention to what the reviewers are saying, contact me and lets start fresh.
  2. Repeat step 1 with Facebook.com.
  3. Is having a favorable Better Business Bureau review applicable to your business?  If so, are you listed on there?
  4. Now again with any industry-specific consumer review websites (hint: Google it).

At this point, you should either be lost or confident that you are on the right track. If you’re lost – I can help.

3rd Test

Are you in the same ballpark?  Are you playing the same game?

This one I can’t help you out on as much.  You opened the business so hopefully, you had a good plan in mind for how to keep your products and services at a comparable level or above that of your local competition.

Luckily,  that is not the most important factor for a brick & mortar buyer.  They generally want quality, value, and (most importantly) convenience.

Give it to them and you are on the right track.

Lost?  There is hope.  I am here to help.  Call me at 405-496-5073.