Vape Radio 51: Update on the European E-Cig Market

By April 6, 2015Podcasts

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E-Liquid Retail Displays for Vape Stores

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Norm Bour: 

Welcome to Vape Radio, your source for everything you wanted to know about the business of vaping. Whether you’re a brick-and-mortar location, developer of e-liquids, online marketer, or anything else in the Vape Space, learn from the first and the largest educational providers in the industry. I’m your host and founder of VapeMentors, Norm Bour and if you’d like to know more about what we do or to catch up on any one of our archive of fifty, that’s right, fifty past shows, visit us at VapeMentors.com. The show you’re about to hear is show number fifty-one, and you know what, we’ve crossed over the first fifty and we’re heading towards our next fifty and we look to be at a hundred some time by the end of the year. The latest stats: we have about four hundred thousand downloads since we began not quite a year ago and about sixty thousand monthly downloads. So again, thank you all for listening and for all the wonderful comments that you have.

I’m going to dig right into some things that are not fluff and not frivolous, but very, very important so please pay attention to some of what I’m about to share with you. Because I’m going to give you an update about the industry itself. Whether you are a brick-and-mortar or e-liquid manufacturer, or any other part of the industry, or even if you’re a consumer looking in from the outside trying to figure out how to get in or where to get it, you need to understand that this industry is very dynamic. And the one thing that you can always bank on is that it will always be changing. A little preview of my article for Vape Magazine in May is about the crisis. I’m not overstating that guys. It’s a crisis. It’s going on right now. It’s not in your neighborhood or your state and it’s not even here in the United States. But it could be a factor of what is going to be happening in the future and it’s happening in Europe. And it is not pretty at all.

We have a relationship with Umberto Roccatti, the CEO of Puff, which is one of the major manufacturers based in Italy. They are the largest franchisers in the world, by the way. At one time, they had about three hundred brick-and-mortar locations. Well, let me tell you what’s happened since January 1. Now this is in Italy only, but is also an indicator of what’s happening in other European countries. The government in Italy took it upon themselves to put in a tax and its four-and-a-half Euros per ten milliliter of e-liquid. I know that doesn’t mean anything to you, but let me put that in perspective, because I had to get it put into my perspective. If you take a twenty-eight dollar bottle of e-liquid, which would probably be a thirty milliliter size, that has jumped up to forty-two dollars. It’s jumped up sixty-six percent. Those are in Euro dollars, but it’s almost a one-to-one equivalent. So you’re looking at a very significant increase.

And you know what? Italy is a petri dish. It’s a beta test for much of what’s happening in the continent. So if you look at a sixty-six percent increase in e-liquid, what is that going to do to our market place? So let’s move a couple hundred miles in the other direction. Let’s go to Portugal. Portugal, they didn’t put on a four-point-five Euro tax. They put on a six Euro tax per ten milliliters. Korea is also putting on taxes. What’s happening is that in Korea they are selling all e-liquids at zero nicotine and then selling the nicotine at crazy prices. I mean insane prices. First off, that is a very dangerous move, because whether you know it or not, but pure nicotine is a very hazardous material. Not to be trifled with. Certainly, not by an amateur.

So the Puff chain, they went from about three hundred stores to two hundred stores. And you know when you hear something like that, you have a knee-jerk reaction. You think, “Oh my God. What’s happening to that business?” Well, you know what? It’s not just that business. It is the business itself of being a brick-and-mortar. Spain, and I mentioned this before in a previous show, they went from about three thousand vape shops, which we acknowledge is probably too high, to less than three hundred. And again, in the country of Spain, Puff went from one hundred and eighty stores to thirty. So guys, you’re looking at about an eighty to ninety drop in brick-and-mortar locations in a couple of different European countries.

So the question is that is this a prognosticator of what is going to be happening in the United States? Personally, I don’t believe it is, but it is triggering some danger sign. So what ends up happening when things like this go on? It can be summed up in one word. That word is smuggling. So what you have is you have a lot of people who are now smuggling e-liquid into these countries to circumvent the taxation. This is almost the opposite of the illegal drug market that we have now seen going legal. You know, for years people have said, “We should legalize marijuana and start taxing it,” and so forth and so on. So it’s going in that direction. But you know what, we have had an illegal drug market in this country for centuries. We have an underground market that goes on and on and on and on and on. So what’s happening here is that these legislators, in their wisdom, are actually forcing people to develop an underground economy. And I will guarantee that you will see that in all these countries with these usurious taxes and you will also see it here in the United States if things go that direction.

So let’s leave the continent. Let’s come on back to the good ‘old U.S. and share with you an event that’s going to be coming up in April. You might be hearing this in April. It’s called the National Association for Tobacco Outlets. It’s going to be in Las Vegas. I’m going to be there on the 22nd and 23rd of April. What’s interesting about NATO is NATO has been the domain of the tobacco industry. They started in 2001 and over the last several years, they have seen vaping become very significant in this industry, and certainly at this event. So what a difference a year makes. You’re going to hear in the interview coming up in the next show, we interviewed Greg Martin, who is the trade show director, and he talked about Google trends and how suddenly the trends are just going astronomically ballistic in a forward direction. That show number fifty-three which is going to be immediately following. So if in fact, you are near or can get to NATO, this is for trade people only. So if you are a consumer, and you are not in the industry, I apologize, you are not able to attend. But if you have a vape shop, if you have an e-liquid company, if you have any type of industry with a business card that shows that you are part of the vape space, you absolutely are able to come.

They’re going to have some pretty amazing education. For those of you who listen to this show on a regular basis, you know that education is very, very significant in my world. I like being a teacher as well as being a student. So the NATO events probably have the best, best panelists and speakers of any national event anywhere. Mitch Zeller is going to be a key note speaker, and if you don’t know who that is, look up Mitch Zeller, because he is significant in the industry. He’s going to be on a panel that’s going to be moderated by Bonnie Herzog, also a major thought leader in the industry. She is with Well Fargo Financial. So there’s going to be a lot of really amazing info there. You can be sure that I’m going to be there and I’m going to be taking video and I’m going to be reporting it back to you in future shows. I’m going to be interviewing like a fiend because this is one of the best places for me to get access to some of the very top players in the industry.

I want to talk about media. And you know, we complain about the legislators, both the local, state, and certainly the FDA as being challenging to work with. But media guys, media, and unfortunately I’m part of media, they’re really a bunch of idiots. So what brought this to light, where I am here in Orange County, California, there was a situation where an e-cigarette actually blew up in a guy’s face, caused a fire, did a little bit of cosmetic damage to him, but nothing important. This make the national wire. So suddenly everywhere people are talking about e-cigarettes blowing up. As we’ve talked about in the past, anything that has an electrical battery in it is prone to a fire or short and what have you. Whether it be a cell phone, or anything that’s run by batteries, you know, which is almost everything. So what happened is that we did a little bit of an investigation with a shop that I know of here in Orange Country. They went to the guy’s Facebook page, and they looked at some past postings. And you know what caused the fire? User error. This was not anything defective. This was a guy who basically put together components in a very unsafe way without having any type of insulation between the battery and the mod itself. So what ended up happening, it caused a short. Now, you’re never going to hear that side of it of course, but I have send that information over to CASAA and also to SFATA because we think we should be aggressive about the defending the industry from idiots like this who are unfortunately giving the business a bad name.

I want to talk to you about our Vape U: Six Pillars to Vape Space Success program. Our first course is now done. And we’re going to be offering the archives starting by the time you hear this, so you can purchase any one of the six courses for sixty-seven dollars. Or you can get the entire set for three hundred and forty seven dollars. Again, that’s going to include the presentation, the handouts, the Q-and-A’s and we have a very, very esteemed panel of instructors here. We’ve got Grimm Green. We’ve got Michael Guasch. We’ve got Azim Chowdhury. We’ve got Gregory Connelly, we’ve got some pretty major people that are involve in Vape U, our first course.

And also, by the time you hear this, we are going to be launching our second program. It’s call Vape U: Six Pillars to Mastering the E-liquid Market. Who is this for? Well, if you have an e-liquid company, and I know that there’s a lot of you out there that do, this is a great way for you to really be able to separate yourself from everyone else. I’m just going to read through the six different chapters that we have. Chapter one is about business plans, models, and strategies. Number two is e-liquid product development. Number three is legal challenges in the e-liquid market. You better pay attention to that one. Four is branding and competitive positioning. Then we have customer acquisition, retention, and service. Last, but not least, social media and PR. And then we follow it all up with a bonus mastermind, which brings everyone together to share all their thoughts and what have you. So if you have an interest in developing a line of e-liquid, first off, I want you to know that we have a resource page that’s active. You could develop your own line with as little as a one hundred bottle minimum. So if you have a shop and you want to create your own line of e-liquids, please get a hold of us or go to our resource page at VapeMentors.com/resources.

On there, we also have Craft Vapery, and we’re also distributing their Artist Collection. We also have insurance through who we think is the best company out there to get your liability insurance to protect yourself. We have whole-sellers and we have merchant accounts as well. So we’ve got a whole list of different services that are now available through our site, which is VapeMentors.com.

Also want to remind you that we are looking for competitors to compete in the Vape Shop of the Month Contest. Are you crushing it in the Vape Space? We’re going to be reviewing, posting, and helping shops nationwide, and going to give you exposure through this show as well as Vape Magazine. If you listen to the last one we did which is show number fifty, you will hear our interview with Jason Hambrecht, with Speakeasy Vaporium down in Amelia Island, Florida. He is our first Vape Shop of the Month. So we would love to talk to you and tell us why you think that you should be one of the Vape Shops of the Month. Or if you want to become more significant and more proficient, we’ll help you through that as well.

I want to talk to you about Bonnie Herzog, who I mentioned a few minutes ago. Bonnie is a great financial analyst and she follows the industry. She reports not just on this industry, but also tobacco, soft drinks, all the things that you find in a convenience store. So what’s happening here is that for fifteen consecutive periods, we’re talking about a pretty significant amount of time guys, the sale of e-cigarettes has been falling. Well, you can interpret that however you want, and what they really feel is that it is a sign of things to come. Because a lot of people who go from the combustibles, the analogs, to the digitals, the acceptance rate, the buy-in rate, for longevity is not that great. But what is underrepresented in their numbers is the VTM market. That’s the vapor tank and mod market. Most of you who are listening to this show right now are probably there. You probably have a brick-and-mortar, an e-liquid company. You are probably somewhere in the VTM arena. So they continue to stand by their reports and their predictions and they think that the vapor consumption market could surpass combustible cigarettes in the next decade by 2025.

So imagine that you could get in your little Delorean time machine and go forward ten years, and you’re going to see the vaping, e-cigarette, VTM market is going to be as significant as the tobacco market. Boy, I tell you man, if we had that time machine, we could all be multi-millionaires, because the question is how do you capitalize on that? They estimate that by 2018, you’re going to see an industry that’s going to almost triple. Right now, it’s about three-and-a-half billion dollars and it’s going to go up to about ten billion dollars in 2018. So you know what guys? There’s a lot of stuff going on and our job here, our mission, our passion, and our promise to you is that we are going to deliver to you all this information that you need so that you can become Vapreneurs, which is what we term those of you who are doing really, really amazing things in the vaping space.

Also, I want to introduce to you a brand new sponsor for the show. This particular gentleman contacted me with a really unique line, so I’m always looking for unique people to offer their products. So I want to introduce you to Daley Displays. You know we say that beauty is in the eye of the beholder, and vaping is of course visually stimulating. The top e-liquid brands stand out with attractive names, descriptions, and pictures, but that does no good if no one can see them in your shop. As I said, we like unique sponsors with unique solutions, and Daley Displays creates visually stunning display cases for e-liquids and other products. They’re all U.S. made. Fifty percent thicker than imports and available in forty-eight hours for standard or just two weeks for custom work. So put your best products in front of your customers and catch their attention with sleek, clear acrylic, or choose a bold, fun, fluorescent color and make your products really stand out. Daley’s has stand-ups and wall displays for all your vaping products. So visit Daley – that’s D-A-L-E-Y – Displays.com.

We’ve connected with them and offered a couple of real significant advantages for you to call them. If you enter promo code “VapeRadio”, you’re going to get a free, they call it a try-it center, which holds tanks for sampling, tips, and a sign-holder. You’ll also get free shipping on all orders over two hundred and fifty dollars or add promo code “radio” for an additional ten percent. So the bottom line is if you are looking to really make some of your products stand out, we want you to visit DaleyDisplays.com. You can contact us here at Vape Radio. We’ll introduce you to their team of pros. So visit the VapeMentors resource page.

And you know what, we’re coming up to the end of section number one. I’m going to read my brand new outro for you. Here’s the way it goes: Hello Vapreneurs, do not go away. You’re listening to Vape Radio, the number one world-wide source for updated information, streamed straight to your phone and tablet. Be part of our growing community of vape masters and head over to VapeMentors.com to learn more, catch up on our past shows, or learn how to grow or start your vape space business. Don’t go away, we’re going to be right back.

Author: Norm Bour

Norm Bour is the founder of VapeMentors and the host of the award-winning podcast Vape Radio. He’s a vape industry coach, speaker, author and can be seen rubbing shoulders with the top influencers in the vape industry.