Vape Shops and Price Gouging
The whole vape industry is set up to price-gouge the customer. Manufacturers all set their start price high – much higher than the ingredients and R&D should justify.
As a way to try to justify these artificially high prices, manufacturers set a MUCH higher MSRP (Manufacturers Suggested Retail Price) to entice local shops, when they see the 200%-500% profit margins. Local shops count on local customers having no other option, but to buy locally. In some cases, with some products, this is accurate, because there are so many product options that they can be hard to find, even online.
The production cost of every 100ml bottle of e-liquid costs just around $1.50-$2.50. Manufacturers sell these bottles to vape shops at a range from $7-$13 and local shops generally enjoy a 200%-500% markup. For the most part, the local shops don’t care about anything but their own profits. I was tired of it. I was tired of having to pay oppressive prices if I wanted to shop locally and made to feel guilty if I didn’t pay outrageous prices, to support local businesses.
I tried to offer business consulting to Canyon Vapors, telling the owner that I could help him recover the sales that had been lost to internet sites, but that it would require becoming competitive with internet pricing. His reply was “Actually, it’s going really well and I don’t really want to change anything.”
“It’s going really well” means “I’m making a lot of money off of the people of this town”. That’s most people’s only measure of success – how much money they can convince others to give them – bonus points for haggling lower prices to make sure people you buy from get as little profit as they can.
I’m tired of the greed. I want to make a living and I want to feel good about how I do it. For that reason, when we get new products, our only conversation for setting prices, goes like this: “How little can we sell this for, while keeping the shop on a good path?”
That’s our whole business model - fairness for our customers. For that reason, we often see jaws hit the floor when people walk in for the first time and see the prices. We commonly hear that people are worried about our products being knockoffs or non-genuine products. Why? They have never seen prices like this in a brick and mortar store. I think we’ll try out the slogan “genuine products at knockoff prices”.