Seven quick questions—and answers—about retailing vapor products
By Timothy S. Donahue
After smoking combustible cigarettes for more than 18 years, Kris Zarate wanted nothing more than to quit. After discovering e-cigarettes, he realized that they truly did help people stop smoking. If vapor worked for him, he figured, then these new products could work for anybody looking for an alternative to cigarettes.
This is a story told time and time again in the industry. Ask vape shop owners why they opened their businesses and the most common answer will be to help people quit smoking cigarettes. In early 2016, the business ratings website Yelp listed 10,591 U.S. companies that identified as vape shops. That amounts to nearly 2.7 vape shops for every bowling alley in the nation and about four for every comic book store. That’s a lot of ex-smokers helping current smokers find a less risky way to consume nicotine.
Zarate is now the owner of Vape Monkeys, with two locations in Chicago, Illinois, USA. He says that taxation is as much a threat to his business as are the U.S. Food and Drug Administration’s (FDA) new regulations. In Pennsylvania, for example, a recently passed revenue package would put a 40 percent wholesale tax on e-cigarettes, liquid cartridges and vapor devices. In Chicago, vape shops must apply not only a 10.25 percent sales tax to vapor products but also an additional $0.80 per “product unit” and $0.55 per milliliter of vape-able liquid. This means a $10 10 mL bottle of e-liquid costs $17.33 after taxes.
“These tax policies are forcing shop owners to sell vapor products for more than it costs for someone to just keep smoking cigarettes,” says Zarate. “We need to incentivize quitting cigarettes; making cigarettes less expensive than e-cigarettes goes against improving overall public health, which is the stated goal of the FDA.”
It is essential that vape shop owners be realistic in a post-FDA regulatory environment, according to Zarate. “Businesses need to focus on continuing their mission and stay true to their goals,” he says. “This will help define your business as the industry moves forward.” Vapor Voice recently sat down with Zarate so he could answer seven quick questions on the possible future of Vape Monkeys and share his outlook on the future of the vapor industry overall.
Vapor Voice: What motivated you to get involved in the vapor industry?
Zarate: Vapor products were the only method that worked for me. I quit after being a cigarette smoker for over 18 years. I was working a trade show with my previous job, and I saw people walking around and coming by my booth vaping. I was very curious, so I visited a company that was selling vapor products to get more information. I instantly realized this was a great industry to be in to help smokers kick the habit.
What is the Vape Monkeys philosophy? How do you approach current smokers looking to switch or the newcomer just learning to vape?
The Vape Monkeys philosophy is simple: Help people quit smoking cigarettes and introduce them to what we see as a better option. How we teach our employees to approach newcomers to the industry is to first explain the benefits of vaping compared to traditional cigarettes by comparing what you’re actually inhaling into your body. With all of our customers we take the time to explain the proper and safe way to use the products they purchase. If they ever have any questions, we are here for them.
Have you noticed any change in business since the deeming regulations deadline, August 8?
Yes, I have. I’ve noticed a huge drop in sales and customers coming into the stores. This can be attributed to the new FDA regulations, false information by writers paid by big tobacco companies and a forced tobacco tax in our county. These changes were only put out to scare current vapers and those looking to quit smoking, and to raise the taxes on nontobacco products and e-liquids. States are losing money as more people quit smoking, and they want to make sure they don’t lose that revenue stream.
What needed to be done to get ready for the FDA’s deadline, and how do you anticipate moving forward?
There were a lot of changes that needed to be done at the stores to get ready for the FDA’s deadline. I had to remodel all of my locations to meet the regulations the FDA is enforcing for shop owners. All I can really hope for moving forward is to keep my business alive and try my very best to give newcomers and experienced vapers quality products, and help them keep vaping. We have to be proactive in helping end the deaths caused by cigarettes and get the word out that vaping saves lives.
How do you seek out products for your shop, where do you source information on the latest hardware and e-liquids?
Every shop owner has their own methods of picking products to bring into their shops. With hundreds and thousands of hardware and e-liquids on the market, it does get overwhelming sometimes. With hardware, I do a lot of research, reading reviews and asking people what they think about the product before I make any purchases. I strongly believe in giving my customers quality products first. As for e-liquids, I am very picky about what I actually sell to my customers. I might use social media to check out the latest products, and customers request some products as well. Once I get samples from e-liquid companies, I personally try them first. Then my employees and customers try them out so we can get some feedback. I also try to not stock flavors that taste similar to what we already have available. This gives everyone a wide variety. Customer input is very important because everyone has a different palate when it comes to taste.
Where do you see the future of the vapor industry?
In my opinion, the future of the vaping industry is all about growth. This year, the vape industry has hit a lot bumps in the road, from the FDA and state regulations, taxation. However, vaping is still much safer than smoking cigarettes. All that vapers, shop owners, e-liquid and hardware manufactures can hope for is improving the industry by educating consumers and continue research that produces hard evidence that vaping is a safer alternative to smoking.
Any advice for fellow vape shop owners stressing over the future of their businesses?
My only advice to fellow shop owners is to just hang in there, be positive and don’t give up too soon. If this is your first and only business, remember that every business faces challenges. The vape industry isn’t going anywhere and will continue to grow. Stay strong in your mission to save lives.