Retail on Vape Shifting Upward Price Increases are for the better

Industry leaders of Premium Vapor liquid
Industry leaders of Premium Vapor liquid
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Industry leaders of Premium Vapor liquid
Industry leaders of Premium Vapor liquid

Three major players in the e-juice business have started to take some of the direct change requests we made months ago after receiving their product for review.  I took a patient resolve with each of these companies knowing how ego’s are (Your Ego is not your Amigo) but like all friends its always there with bad advice.  We had a laundry list of industry wide complaints and we are starting after 5 months to see some shift directly into where we asked them to be 5 months ago.

  • Central Distribution
  • Retail pricing structure that respects 2 point shipping and retail variety requirements
  • Manufacture/Wholesale consumer direct pricing competition models
  • Packaging to meet FDA compliance
  • The Other guys problem Pricing schemes
  • Dealing with Nicotine and SKU’s

We handed our laundry list to our point of contacts at Longhorn Vapor/ Cuttwood / Oakshire Trading Co.  While still upset at us for daring to explain basic economics of distribution of a product lines, we are seeing implementation of our suggestions, although no one has called to ask how do I like it now.

Longhorn Vapor co made some changes to its website structure and moved its 35ml bottle to $29.00 for direct sales.  This was exact suggested retail on their product line when going consumer direct.  We do not want to stop any manufacture from selling direct to consumers but they have to respect the overhead costs at the retail level if they want square footage and access to my 6000 customers.  If the customer likes the flavor is only half the story.  Retail has to make a profit selling what the customer enjoys.  If the retailer is barely treading water, they will cut costs and stop selling the vapor that only passes through the location never leaving any profit behind.  Good job on that change as it fixed two points Retailer profit model with two points of shipping.  In this area Longhorn Vapor co is leading the industry to a successful business model.

Where they are still failing is following the Expo path.  Expo’s should be an introduction to the public and while at those events manufactures need to be handing out a list of Distributors who stock their product.  It is your number one selling point to distributors, you promote them and do not compete with them.  Hell do not hand out sample packs hand out coupon codes that they can use at the distributor for their sample pack.  MAKE the retailer inject themselves into the business stream properly.  A potential retailer should leave an expo with a bag full of paperwork not a bag full of product samples.  This also engages your distributor with the retailer and lowers your cost on product samples.

The other failing part and the reason we threw LongHorn Vapor on the closeout shelf in the retail store was their hardware sales.  Someone decided that there is no money in hardware and therefore trash the retail price and get consumers to come directly to their website and cross sale.  That is the “other guys responsibility problem”.  That thinking is still rampant in the gun industry today and the only reason there are gun dealers left is they are on social security and retirement pay as retailers.  They are retailers who do not need profit.  So filling your store with ZERO profit items works when your seeking ZERO profit.  Many we talk to are SHOCKED to find out we make more money on hardware than we do on juice.  The cheaters out there cutting bottles when the law doesn’t permit it are retailing juice to the market below my cost of bottled premiums.  No one is slicing and dicing my hardware lines except the e-juice manufactures and wholesalers who can’t seem to keep retail direct off their plates yet.  Every other industry has learned the hard lesson that wholesalers who allow retail direct kill manufactures by devaluing the market.  Competing against the Chinese fever pitch sales methods has American vape companies believing they are exempt from this problem.  Not to say these places won’t exist but true premium brands won’t have their names attached to them.  Discussion amongst juice manufactures that are in the same distributors need to take place to protect the market and brand.  You can maintain a MAP Price legally.

Oakshire Trading Co.  We were happy with their product did 4 full reviews had event nights spent over $4000 reviewing an interviewing for this product line.  Only to deal with a salesman who found the time to piss me off about his commission problems when we tried to discuss the lack of profit and how to fix it bringing it into the retail space.  This company has way to many SKU’s and the reality was the public didn’t like but 10% of the product.  At the time of the conversation they hadn’t approached a distributor to allow there varied product line to reach a bigger market since their flavors met a need but didn’t create a demand.  Since they did this with one of the distributors we do business with we brought back 3 of their product lines although it appears that selling 15ml bottles to distributors to unload surplus seems to be the plan so time will tell if they learned their lesson or think they are smarter than the system.

Cuttwood
Cuttwood took the battle over dies and came back stronger earning respect.

Cuttwood it appears is in negation with a distributor we do business with and this company has lead the way in price and profit control for their retailers.  It is Cuttwood we credit with creating the $21 price point which was high when they did but laws changed since they did this and moving it to the $29 for the 30ml is necessary.  Get their product into the distributors to maintain the market they built.  They are lagging behind in this area and its to quick to squander growth when you are trying to “stick with what worked” and not respond to the market.  The government has positioned itself take chunks of money at all levels probably after next election.  Waiting for that shoe to drop is irresponsible.   Its also our opinion that Cuttwood has earn the respect of other juice manufactures and they easily take a leadership role.

When it comes to us at SkyVape Magazine we get caught in the whiplash of what other magazines do to get revenue and how we work.  There is nothing “Standard” about our platform.  I do not have to write a fluff review of a company, in order to get some “ad money”.  Guess what we don’t have ads.  That means that growing readership respects our opinion.  We take that responsibility serious.  Dealing with companies at the high level is not the capability of but a fraction of the market.  To expose those problems, to make faster changes so everyone profits from a well run and responsible industry, and to keep accountable those who just want in to get out.

Never doubt that our goal is the same as the companies that do business with us.  Make more money by doing business with us.  There is no reason to partner with a Magazine for advertising if it doesn’t generate 1 dollar more than it cost.  Our readers should never doubt that my pleasantry on the phone with these companies stops the very minute the excuses start.

The profit should be in the fluid as its a repeat sale but manufactures have got to stop setting market values from thin air with zero respect to the cost of running a retail business.  Work the market and get some shelf space and STAY THERE.  That’s growth, that’s profit, that’s stability.


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