Technology June 11, 2019 Last updated June 10th, 2019 49 Reads share

The Surprising Ways Inventory Management Can Affect Customers

The Surprising Ways Inventory Management Can Affect CustomersImage Credit:

If you have taken the planning steps to start your own vape shop, you probably have gone through all the scenarios and costs that have played into your decision.  In addition to the costs involving employees, rent, and insurance, inventory is one of the huge variable costs that can make or break your business.  The starting inventory is arguably the most expensive piece of the pie clocking in at 15 to 20 thousand dollars of your start-up costs.  If that sounds like a lot, it certainly is.   However, this is going to cover your essentials and get your business set in the right direction to succeed.  Here are some tips to get started.

Strategic Purchasing

Before you decide on what to buy, look at where to buy.  Remember, you are buying a product in order to up mark it for retail sales.  The lower you can purchase in bulk, the more you will make in profit margins at the end.  This can be a double-edged sword though, as you normally get bigger discounts on product the more you purchase.  In the beginning, however, it is all the time spent buying the juice.  If you purchase through a distributor, it will be a lot less time consuming as you can get all the brands that you need in one spot.  Distributors will have all the brands and mark it up so that they make a profit on the juice.  This, of course, is the easiest approach.  However, you are not sure how reputable these distributors are.  You essentially do not know where they are getting their product.  But if you take that leap of faith, you can definitely save some time.  If you go direct and buy juice from the manufacturer, rest assured that your juice is the real thing.  You will also get the juice at a better rate since the distributor needs to make a cut on the juice as well.  The negatives, however, is that you have to purchase from multiple brands to get your stock instead of just getting your juice from one supplier.

What To Sell and How Much

Once you have decided on your supplier, it is time to determine exactly what you will sell.  There are thousands of different flavors on the market and hundreds of vapes.  In addition to the thousands of flavors, there are multiple nicotine levels in each flavor.  For example, you can get juice for 0 mg, 3 mg, 6 mg, and sometimes 12 mg.  If you step up to nicotine salts which is a much higher concentration of nicotine, you can get 35 mg or 50 mg of nicotine.  This means you have much more in terms of SKUs.  As a good rule of thumb, the sweet spot for juice is in the middle.  Most people will not choose 0 mg because it has no nicotine in it and at the higher nicotine levels like 12 mg, it is a bit too heavy.  3 mg and 6 mg are the nicotine levels that are purchased the most.

Variety is Key

For many customers, variety is the spice of life.  You will want to keep an inventory that caters to as many people as possible.  In order to do that first, take into consideration your vapes.  Most stores will only specialize in a handful of vapes that include pens, handhelds, and large mods.  They will carry the biggest names in the market like Smok and Kangertech.  The reason is you need the name recognition to help you push the product.  The goal is to appeal to all vaper types that could grace your store.  You will also need to have back up equipment for each type you carry, including coils, batteries, and accessories.

 

The Flavors

The last major part of your inventory will be the most expensive, the flavors.  Remember, variety is key here, but don’t break yourself trying to buy in bulk and a huge variety.  The key here is to build off a few strong juice brands like Candy King Vape Juice and Naked 100.  Although you only have a couple of big brands like these, the wideness of their offerings will give you flavors that a good deal of people would be interested in.  Plus, these brands have the name recognition and pull to get you off on a successful foot.  Since they are so big, they will also be able to give discounts more often and larger.  This will definitely help out a vape store just starting up.  These companies can also throw in sweeteners like hats, shirts, stickers, etc to help you sell as much juice as possible.  In addition, they can help you with your discounts and product recognition.

Payment Options

Lastly, let’s talk about payment.  Try to purchase your juice via credit card and try to avoid using a debit card for transactions like this.  As a young company, cash flow is king, so giving yourself 30 days to pay for your good without incurring interest is the best way to go.  Credit cards give you that ability.  If you can negotiate terms with the vape juice manufacturers, that would be the best, but a lot of juice manufacturers will not allow this.

Conclusion

The basic rubric for strategizing your inventory is to buy cheap, buy in bulk, and buy variety all while keeping in mind you have limited funds for the transaction.  Start smaller in terms of the number of brands and the individual juices and mods within these brands.  With this knowledge in hand, make sure that you know your stock and be able to talk about it.  The most important thing is to get your product off your shelves and into the hands of your customers.  They have gone this far to enter your store, choose some juice, and hand you money in the transaction.  It is up to you to take that money.  Don’t be that guy that is so much on his high horse that he does not realize that all you are selling is a dream.  Dreams do not pay the bills.  Smart sales and inventory management is what will help you grow your business.

 

Inventory Management

Mudassar Hassan

Mudassar Hassan

These seven simple words - dream big, work hard, make it happen - have been at the forefront of my mind this week. I don't know whether it's because of the sentiment of a brand new year, but I've been feeling super motivated to dream a little bigger, work a little harder, and make things happen this year.

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