Despite the booming popularity of the vape industry, selling vapes online isn’t as simple as opening a brick-and-mortar store. It is a high-stakes business operating in a heavily regulated industry, where compliance and legality can make or break your business’s future. But with great risk comes great reward.
Whether you hope to sell a wide variety of devices and accessories, including vape pods and pens, e-liquids, batteries, or coils, or plan to focus on a niche range of items to fill a promising gap in your local market, the rapid expansion of the vaping industry creates the ideal environment for a successful and sustainable business venture to start an online vape business.
Legal Requirements
Legally selling vapes online is a highly regulated industry. Unlike traditional cigarettes, vape sales have many legal obstacles to navigate, primarily surrounding age verification, licensing, and compliance with the Prevent All Cigarette Trafficking (PACT) Act.
Vape products of any kind are considered age-restricted items, meaning each potential customer must verify their age before completing a purchase. Most states require consumers to be at least 21 to purchase vaping and e-cigarette products.
Additionally, selling vapes online typically requires a tobacco retailer license, which varies state to state in the US, as some jurisdictions view vape products as the same as traditional tobacco products. Consult with your state’s department of revenue to confirm what licenses and permits are required to operate your online store legally.
Getting Started
Building a successful online store requires more than just listing some products and prices on a website. You need to develop a strong, informative website that complies with all industry regulations, establish a sustainable business structure, select appropriate storage and shipping options, and successfully market yourself to potential customers.
Business Structure
The first decision you need to make when starting a new e-commerce company is choosing your business’s legal structure. Options include sole proprietorship, LLC, or a corporation. LLCs are typically the most popular option for small businesses as they offer liability protection. Once you have decided on this structure, you will need to register your business with the correct authorities and obtain the necessary permits and licenses to operate legally.
It is crucial to properly educate yourself on local, state, and federal laws regarding the industry as a whole to ensure you remain compliant. Consulting with a lawyer familiar with these laws will provide the most comprehensive overview.
Product Focus
It is not possible to carry every product available, so you will need to decide which products your focus will cover. You can choose to carry a wide selection of items, such as e-liquids, pens, pods, batteries, coils, and various accessories, or specialize in something more niche, such as CBD vapes, reusable devices, or premium vape juices.
When selecting products to sell, research industry trends, other companies and distributors in your local area, and customer demand to make a better-informed decision. Select a reliable and trustworthy supplier or wholesale partner who can support your business direction.
Platform & Website
To start your online vape business, you will need to select an e-commerce platform that offers flexibility and supports the tools and software required for age verification and other compliance requirements. Customizable platforms allow you to build exciting websites, manage orders and shipments, and implement loyalty programs to encourage customer retention.
When building your website, it is crucial to ensure it is easy to navigate, displays clear, accurate information, and is mobile-friendly, as many consumers shop extensively on their smartphones. Create product and accessory categories to help potential customers find what they want quickly and easily.
Furthermore, because selling vapes online requires age verification, you must integrate software that verifies this information before customers can complete their purchases to remain compliant with local and federal laws.
Payment Processing
One of the most challenging parts of setting up an online vape company is finding a payment processor. Many popular gateways, including Square, PayPal, and Stripe, do not support vape-related transactions due to regulatory concerns. Vape products are considered high-risk due to chargeback risks, legal complexities, and potential for fraud.
The most reliable option is selecting a high-risk payment processor that offers secure payment gateways, chargeback protection, and regulatory compliance guarantees.
Marketing
Like any e-commerce industry, you need to stand out from your competitors to build a successful and sustainable business. By implementing effective marketing strategies, you can increase organic traffic, improve search engine results, and attract new customers.
Four effective marketing strategies include optimizing your SEO to improve your search engine visibility, employing email marketing, building a business presence on social media, and encouraging customers to leave product reviews and testimonials on your website and social media platforms.
Storage & Shipping
You will need to select the appropriate storage option to hold the stock you plan to sell. This could be a room in your home or garage, a rented storage space, a warehouse, or a third-party fulfilment centre. Regardless of what you select, the space needs to be clean, dry, and temperature-controlled to ensure product quality is preserved. To start an online vape business, implementing inventory software will allow you to better track your stock and prevent overselling or purchasing incorrect stock.
Additionally, you need to consider how your products will be shipped to customers. The PACT Act and additional local regulations carry strict rules on how vape products can be handled and shipped. The USPS cannot be used to ship vape products of any kind, while private carriers, like FedEx, UPS, and DHL, typically carry their own policies, including proof of compliance and age verification. Furthermore, federal law demands that all vape products are correctly packaged and labelled, indicating the presence of tobacco, nicotine, and vape-related materials.
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