I have a buddy who owns 5 vape stores He charges 15%-20% above internet prices, that makes him break even. He buys huge wholesale lots and then distributes them to vape shops in 3 states. He is in it for vaping, and profit which I will never fault him for. That's where he makes his money....
See, but that's a reasonable markup for the service provided. With B&M stores, you get advice on what to buy, you can examine the products and often even try them out, and if something goes wrong or you can't figure out how to troubleshoot something, you don't have to play email-tag to have it rectified... ...you just take it down to the shop. There's also the atmosphere and sense of community that you can't get from an online vendor. B&M's are a great place to meet fellow vapers and stay in the loop with products and events.
All of that justifies some markup. You're paying for an experience and punctual service. 15-20 percent actually isn't bad compared to the markup that's common practice in other storefront markets.
I will always support my local B&M simply because they represent the local vaping community and help new vapers find their way. I get why some people think they are overpriced... ...there are a lot of things I would never buy from a B&M. But in order for them to succeed and be able to offer us their products and services at a better price, they will need our support in getting established.
And yeah, retail markup is bad. There are toys at walmart that cost less than a dollar to make and sell for $20 or more. I myself work in retail. I've worked as a freight manager in a few different types of stores, so it has been my job to know both the the profit value and the actual cost per unit and I can tell you that there are no exceptions - they all sell at a criminally-high margin.
Even the company I work for now, Dollar Tree, is marking up their shoddily manufactured sweatshop products at a ridiculously high margin. Sure, everything is a dollar-six, but most of the things in there cost us around 10 cents per unit.
And overhead isn't the reason for that. It's about budgets and goals. Most retail stores shoot to be in the green, not the black. These big corporations don't just want to succeed, they want to
exceed. They will go to every shitty length to make more money. They often do this at the expense of their price point and quality of service. They continually slim-down budgets for safety-related expenses, basic utilities, and staff wages not because they need to in order to succeed but instead to squeeze that much more out of their operation. That's just how it is. The most successful companies in retail are run like this. If they can get away with it, they will do it. They pretty much have every incentive to and nothing stopping them. It's bad for the market and the consumer, but it doesn't hurt their bottom line.
The vaping world is no exception, I suppose. There will be slimeball shop owners, manufacturers, and juicemakers... ...though more often than not, I think the price point is merely a symptom of a new industry that's growing much more quickly than anybody could have anticipated. Imagine going from making $500,000 a year in gross profit from your little mom-and-pops operation to running a million-dollar-business in just a couple of years. With that scaling comes changes in the structure of your company, new overhead, and new risks. If you're not prepared for that upswing, it can put you out of business.
Additionally, there's a lot of uncertainty in the market because of how large it is for how new it is. Nobody really knows quite what things should cost. There isn't really much in the way of market standards. I think as the market matures, we will see more reasonable B&M prices. I think people often forget that these are new business. It can take a few years before they start seeing any returns at all on their investment. Customer bases start small, but the costs to the owner are not inherently lower just because they are smaller and have fewer customers.
