How Much Does it Cost to Open a Vape Shop?

The numbers are in, and the evidence is clear: the vape and E-cigarette industry is extremely profitable and is among the fastest-growing niches in the world. Currently, the estimated value of the E-cigarette industry in the USA in 2023 is $30.33 billion. This is only expected to grow over the next several years, with conservative estimates saying that the E-cigarette market will grow to nearly $58 billion in 2028 and will likely continue to grow beyond that.

For any entrepreneurs looking to start their own business, the vape industry is clearly one of the best markets to enter. With that being said, as the old adage goes, it takes money to make money.

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If you expect to turn a profit running a vape shop, then you also need to be prepared to invest a healthy amount of money in the first place. Opening up a vape shop requires a significant upfront cost as well as regular ongoing and maintenance costs.

However, if you’re able to weather the initial financial storm and handle the ongoing monthly expenses, generating real revenue running a vape shop is more than possible. Right now, we’re going to provide you with all the information in terms of how much it costs to open a vape shop, so you can enter the industry fully prepared.

Key Takeaways

  • How much is it to open a vape shop? – Including the startup costs and first month of operation, expect to spend anywhere from $28,000 to $61,000, along with ongoing monthly costs. (This assumes that you are renting or leasing property, but the initial cost will be higher if you’re purchasing a property).
  • There are many costs to consider, including, but not limited to, rent or mortgage, inventory and restocking, licensing and permits, security systems, building out the storefront, utilities, and more.
  • This article will provide a detailed breakdown of exactly how much you can expect to spend in each category and more.

Initial Costs Breakdown

The initial setup is where you’re going to end up spending a big chunk of your money. Of course, we can’t provide you with an exact number here, but we can provide you with some rough figures of how much it costs to either purchase or lease a retail location in the USA.

Before we talk about those figures however, it’s important to note that they can vary greatly depending on a variety of factors. First, the location makes all of the difference.

If you are in a very busy area, such as a popular downtown core, then your rent or mortgage is automatically going to be much more expensive than if you are in a low-traffic or urban area. 

Yes, the current condition of the building itself will also make a difference. If you purchase or lease a brand new building, it’s going to be much more expensive than if you’re renting some old hole in the wall.

If we’re talking about leasing or renting a storefront, you can expect to spend anywhere between $2500 and $5000 per month. While we can only provide you with rough estimates, an important figure to take note of is that in the USA, the average lease for a retail space is around $38.06 per square foot. However, if you’re looking to purchase a retail space, you may easily spend $300 per square foot or more.

There are both advantages and disadvantages to purchasing retail locations and leasing retail locations, so we recommend doing a bit of research on this front. 

Purchasing a retail location may be a better investment in the long run, although the upfront cost is a lot higher than renting or leasing. Your physical retail location isn’t the only investment that you’ll need to make here, so let’s take a look at all of the other costs associated with opening a vape shop.

Inventory and Stock

One thing that customers always appreciate in any retail shop is selection. This applies to a vape shop just like with any other retail location. If you expect to satisfy your customers, and if you expect them to keep coming back for more, you need to provide them with a worthwhile selection.

This means stocking up on a wide variety of e-cigarette types. We could be talking about fully reusable mods or disposable vapes, as well as potentially dozens of each type.

Between all of the different reusable vapes, disposable vapes, vape tanks, coils, wicks, batteries, freebase E-liquids, nicotine salts, and more, there are hundreds upon hundreds of products that you can choose from, and you’d be wise to stock up on as many of them as possible.

As far as possible brands to stock up on are concerned, some of the best to consider are Vaporesso, Aspire, Geekvape, VooPoo, Smok, Uwell, and so many more.

In terms of how much you’ll actually spend to get a good inventory going, expect to spend anywhere between $2500 and $5000 on starter kits, anywhere between $2500 and $5000 on intermediate kits, up to another $5000 on additional coils, wicks, and accessories, and anywhere between $10,000 and $15,000 on E-liquids.

That’s anywhere between $17,500 and $30,000. You don’t necessarily have to spend that much but your customers aren’t going to take you seriously if your shelves have only a handful of products on them.

Licenses, Permits, and Regulations

Vape products that are related to nicotine or contain tobacco are closely regulated by both the federal government and individual state governments. Generally speaking, it is the individual state governments that are responsible for determining what kind of licenses and permits that you require to sell E-cigarettes and related products in the state of choice.

Therefore, the most important takeaway of this section is that you need to do in-depth research in terms of the specific licenses, permits, and regulations associated with selling vape products in your state. We obviously can’t go over every single licensing and permit requirement for every single state, so it’s up to you to do a bit of research here.

However, there are some general pieces of information we can provide you with, with one being in relation to starting a formal business entity.

Creating a Formal Business Entity

If you plan on selling anything at all, then you need to have a formal business entity, and this is mainly for tax reasons. The US and state governments always want their fair share of your income, which means that you need to have an EIN or employer identification number so you can legally pay taxes federally and statewide.

To obtain an EIN, you’ll need to start a formal business entity. If you’re looking to just start a small business, you might create a sole proprietorship, which is generally free. 

However, vape shops do come with certain risks to the consumer, which means that having some amount of liability insurance may be ideal. 

If you expect your business entity to cover you, both legally and financially, then starting a business entity known as an LLC or limited liability company is recommended. Starting a limited liability company in the USA may cost anywhere between $35 and $500.

Getting a Retail Business License

Next, you’ll also need a US state business license. Exactly what type of license you’ll need depends on the state in question and the type of business permit. 

The costs associated here include both filing and processing fees. Moreover, a business technically needs a US state business license for each state they operate in. Depending on the state, this can cost anywhere between $50 and $550 per state, per year.

E-Cigarette Licenses

Although this is not the case in all states, more states than not require businesses that sell E-cigarettes and related products to have special electronic cigarette retail licenses. Once again, this depends on the location in question.

For instance, an Electronic Cigarette Retail Dealer License in New York currently costs about $200, with the renewal period being every two years. However, there are some states where this may cost several hundred more per year.

Insurance and More

Some states may also require tobacco and vape retailers to acquire business insurance. This may also cost you up to $150 per year. Take a look here to find some of the best vape shop insurance available.

Beyond that, there may also be some costs associated with remaining compliant with both federal and state regulations, such as having up-to-date POS systems, security, and more.

For instance, if we are talking about security, this could easily cost you anywhere between $20 and $100 per month, depending on your service provider, as well as several thousand dollars in upfront costs for alarms, security cameras, safe boxes, vaults, and more.

Store Design and Setup

Besides all of the legal and technical aspects, you also need to consider the visual appearance of the storefront itself. If you expect to create sales and keep customers coming back for more, or even to get them in the door in the first place, you have to create a very inviting atmosphere.

A vape shop should be bright, open, friendly, and inviting in general. A vape shop that is dark, dingy, and looks like it needs to be better organized is going to attract few customers.

You must create an appealing store interior, including high-quality display counters, shelves, lights to illuminate the products, signage, and more. Just be aware of various local rules and regulations, as many areas in the USA prohibit the direct advertisement of such products outside of the retail location.

In many cases, this means looking as bright and attractive as possible without outright advertising tobacco or nicotine products. When it comes to building out a store or renovating an existing building, this could easily cost you anywhere between $10,000 and $30,000 or even more, depending on how elaborate you want your decor to be.

How to Open a Vape Shop with No Money

At this point, it’s pretty obvious that you’re going to need a substantial amount of money to start a vape shop. Now, if you are opening up a vape shop in the USA that only sells nicotine and tobacco products, then you are in luck because the big banks and the government will likely be willing to work with you.

If you’re looking to create a hemp-based facility, you probably won’t be able to get money from a bank. However, as far as vaping is concerned, you should be able to secure either a small bank loan or a small business loan from the SBA or Small Business Administration. In terms of overall costs, this is probably your best bet.

However, if, for whatever reason, you are unable to get a small business loan or bank loan, you may be able to get a personal loan, and if that fails, there are always credit unions out there as well. However, credit unions should be avoided as their fees and interest rates will be sky-high.

Ongoing Operational Costs

Before we call it a day, one of the last things we need to look at is what some of the ongoing operational costs of running a vape shop are, particularly in terms of monthly costs.

Rent or Lease

Depending on the location you’re in, you can expect to pay anywhere between $2500 and $5000 per month for rent or on a lease for a business retail location. This, of course, varies based on the state you’re in as well as the specific area, and in some cases may cost significantly less or more than the figure shown above.

Utilities

You also need to consider your utility costs, which may include electricity, gas, and water. This may cost you anywhere between $250 and $500 per month.

Inventory

Exactly how much you’ll need to spend on inventory and restocking costs per month depends on how much business you’re doing. If business is going well, you might spend anywhere between $17,500 and $30,000 per month, although the point is of course to sell this inventory, resulting in a profit.

Security

Expect to spend anywhere between $20 and $100 per month for a security subscription.

POS Systems

Having a good point-of-sale system for your vape shop is also important, and this could cost you anywhere between $100 and $300 per month in subscription fees, depending on the provider.

Employees

How much you have to spend on employee salaries also depends on the state you’re in, how much you’re willing to pay, how many employees you have, and how much they work. 

Let’s just say that you have four employees, each earning somewhere around minimum wage and working around 25 hours per week.

This would mean that you would have to account for around $3600 per month on employee salaries. This is just a rough estimate, although based on a 25-hour work week and average salaries, expect to spend anywhere between $800 and $1200 per week per employee.

Licensing

Depending on the state you’re in, you’ll also have to keep your license updated, which may cost several hundred dollars every year or two.

Marketing

Although this is solely up to the discretion of the business owner, you may also incur various marketing costs. Keep in mind however that the outright marketing of tobacco and nicotine products in public spaces is generally outlawed, so that’s one cost you won’t have to worry about.

However, consider that you can engage in a bit of social media and online marketing, especially by investing in a good website with search engine optimization that will drive traffic to your online retail store. Search engine optimization may cost you anywhere between $500 and $10,000 per month depending on the size of the campaign that you’re running.

Final Thoughts

As you can see, starting a vape shop is not cheap. There are a lot of different upfront investments you’ll need to make, as well as ongoing monthly costs. 

The reality is that the vape and E-cigarette industry is set to grow exponentially within the next few years therefore, there is definite opportunity for entrepreneurs and small startups to make some big dollars. 

If starting your own business is something you’ve always dreamed of, then the vape industry is certainly a great one to consider joining.

How Much To Open a Vape Shop: Frequently Asked Questions

Quickly answer some of your most frequently asked questions before we wrap things up.

How Much is the Average Monthly Expense for a Vape Shop?

The average monthly cost to run a vape shop will be anywhere between $6000 and $11,000.

Can I Start a Small-Scale Vape Kiosk Instead?

Yes, you can start a small-scale vape kiosk instead of a full-blown retail location, which will cost a fraction as much.

Are There Franchise Opportunities Available for Vaping Businesses?

Yes, there are plenty of franchise opportunities available, such as ones from Vape & Smoke Shop, VaporMaven, Artisan Vapor & CBD, Juicity Vapor, Vapor Galleria, and many more. But, keep in mind that this will be extremely expensive, as the franchising licenses for established vaping businesses can be pricey.


Disclaimer:
The information provided on Vapes.com is intended for educational and informational purposes only. Vaping may have potential health risks, and the content on this site should not be considered medical advice. Always consult with a healthcare professional before making any changes to your vaping habits or if you have any concerns about the health effects of vaping. Vapes.com is not responsible for any adverse effects or consequences resulting from the use of any information, products, or services mentioned on this website. Use all products at your own risk and in accordance with local laws and regulations.

 

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A fluent writer in English and Spanish, Raul comes to us with vast work experience in the tobacco industry. He has turned his sights to informing readers about vaping culture, safety, and news.

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