*Long* Dizzi's Shopping Musings

[dizzi]

This started as a reply to the Phoenix thread, and the argument about buying cheap from China vs buying more expensive from the UK. It turned out so long I thought I'd better make it a post by itself. That way if nobody's really interested, it'll just sink to the bottom of the page and disappear. Or if there is an interest it won't take over the Phoenix thread itself. Or perhaps this isn't the place for this, in which case it can be deleted by one of the Mods, or moved elsewhere. I just wanted to post this somewhere, seeing as it took ages to type, and see what people think.

One of my best friends owns the local "weird" shop. You know the kind of thing, free trade and ethnic goods, crystals, incense, body jewellery and so on. She wanted to start stocking ecig stuff. I was her consultant (unpaid), cos I know what I use and I'm on here a lot so know what other people use and rate highly. This was after she started by stocking Gamucci (yes, I know). Now, in order to keep going, she has to price everything at around 2.5 times what it costs her to buy. She doesn't earn much. She employs a couple of part-time assistants so she doesn't have to be serving by herself all day every day, and does the rest herself. She is definitely not rich, or ever likely to be (but then, money is not her main motivator). The rates on her shop probably aren't that high in comparison to some, it's a small shop in a small market town, a million miles from, say, Harrods. She doesn't have a huge turnover. She does have a core group of customers, and a steady trickle of passing trade. No high volumes or pile em high, sell em cheap mentality here.

Fortunately, she fills a niche in the shopping market that's unlikely to be taken over by online or out-of-town shopping, because most of her sales are to impulse buyers, gift buyers and to buyers who need to see the item they are buying. Unfortunately it looks as though selling ecig stuff is a non-starter for her. She won't have the sales volume to justify taking up shelf space in the store. For her, it would be just another niche in her store full of niches, but one that won't move fast enough or at a high enough price. The people who bought the Gamuccis (think she has one left, now half price, plus a bunch of 3-packs of cartos, she won't be restocking) are still smoking, they need ego batteries and clearos but they're not interested enough to search such stuff out online. They could buy them at the store, if she could afford to stock them - but she can't. So as far as they know ecigs are over priced and a bit of a disappointment.

She could, of course, buy from Vapor Break rather than try to find a wholesaler in the UK (LF does wholesale, but it would be unlikely she'd sell anything at 2.5 times those prices). Same markup applies - so a £3.50 dripping atty (for example) becomes £10.50. A Vamo is £50, from £20. And that's without the shipping costs, customs costs, cost of the inevitable duff item. And then it sits on the shelf, taking up retail space, until someone buys it. IF someone buys it - after all, people can buy it directly from China themselves without risking customs charges, and one duff £3.50 atty is not going to break the bank, it's worth the risk. Or she could buy directly from the factory and add a bit more than 250% to the markup to pay for the increased number of returns she's likely to have. It's too risky, especially when she knows using that shelf space to sell hand-made soaps is a definite profit maker.

So selling ecig stuff is pretty much a non starter for anyone who wants to sell other stuff as well - it needs to be "an ecig shop" not "a shop that sells ecigs". Unless the shop is Sainsbury's, who have a LOT of customers to sell to, and can afford to take the hit if their crappy E Lites or whatever don't sell.

Amazon has killed the small bookstore and the record store. Supermarkets have killed most small greengrocers and butcher's stores. High turnover and less brick & mortar costs allows them to undercut everyone else, and their resulting market share gives them enough power to dictate what the producers can and can't do - and eventually enough marketing clout to manipulate what the consumer actually wants to buy.

What does everyone think will happen if ecigs overtake cig sales? Those metal boxes near the supermarket doors won't have much tobacco in them anymore. They will have pre-made, branded e liquid in a few different flavours and strengths, they will have a small range of batteries and chargers, they will have a range of pre-filled cartos, a few different clearos (maybe even in different ohm ratings). The prices will be carefully lower than all the small online niche ecig shops can manage, by a noticeable amount, but mostly a little higher than Amazon, usually by a negligible amount. They won't sell the gourmet juices we are used to from Grizwald, Pixie and the Alchemist, because those people are only one person and can't keep up with the kind of production quantities supermarkets demand. They will buy from whichever company sets up a high-volume juice factory in the UK. It's unlikely this scenario will happen without that - I can't see the supermarkets buying all their e liquid direct from China. And the day is coming when someone will set up a high-volume juice factory in the UK - assuming, of course, that the EU doesn't succeed in its mission to rid the world of ecigs.

And then what? People in the know, and who care enough to spend the extra money, will continue to buy at least some of their juices from Pixie, the Alchemist and Grizwald. The prices will seem steep compared to supermarket e liquid, but the quality and flavours will be worth it to some. They won't, however, be buying most of their kit from Vape Escape and E Cig Wizard - apart maybe from the kind of big battery specialized mods that the supermarkets won't sell. Kind of like buying good quality pipes and speciality tobaccos from a specialist tobacconist rather than a supermarket or corner shop. As the mods still come from abroad, the customs problems still apply, and so does that x 2.5 markup. What happens to most of our vendors? They go the same way as the greengrocer and the book store. They either fill an increasingly small niche, with an ever-decreasing client base, by specialising in mods and gourmet juices, or they go to the wall. Most will probably go to the wall even if they specialise. There's only room for so many specialists in what may be a fast moving industry technology wise but still small in terms of customer base. Don't forget that most ecig users will now be like most smokers - they'll mostly use one brand, in one strength, one flavour, on one type of battery and in one type of delivery device, for their entire life. They won't be interested in tin mods, Vamos, Provaris etc, certainly not enough to seek them out even if they ever knew they existed.

This essay came about because of the (polite) argument between Gordy and Robby on the Phoenix thread. I still can't really say where I stand on the issue of paying more to buy from a UK supplier, thus supporting them, rather than saving a sometimes substantial amount of money buying from China (which is where the UK vendor's stock came from in the first place). I'm on a tight budget myself, and if I could only buy from the UK I wouldn't be buying a Vamo at £50. £20 from China I can afford. Either way, the UK vendor doesn't get my money for a Vamo. Juices I do mostly buy from the UK, ego batteries and most delivery devices too. Vivi Novas I buy from China along with the Vamo. Again, if I could only buy from the UK I wouldn't be buying them. I might buy an extra ego battery or an extra CE5 instead, but that's it.

I do not have a problem with a 250% (or more, if necessary) markup - if there is no profit then why go into the retail business (or indeed any business) in the first place? There is nothing bad about making a profit, profit is a very good thing indeed. It keeps people in work. It keeps vendors selling things we need and want. Without profit, they'll all go and do something else instead. The people they employ will be unemployed. The premises they used will be empty and probably end up vandalised. The owner of the building/land will no longer be able to support themselves as they won't have the income from rent anymore, so they'll be on unemployment as well. And we won't have anywhere to buy our food/clothes/shineys.

I know, I know, TL;DR. But I really would like to know what others think.

[Raffles]

WOW Dizzi, what else have you done today?

Seriously, an excellent and articulate post, raising several questions. I think you've identified the problem many retailers face, do they go for the mass market (all things to all people, meaning a hell of an investment) or go for a very niche market (losing the masses but catering for the serious buyers, and probably not so much of an investment).

As you say, we can't all be Sainsburys or Tesco, so trying to compete with them is a no no, but also as you mention, they will not be stocking the mods, juices etc that a lot of us will want. I think there will be room for both, as in other markets. The likes of the vendors we see here will survive as long as they are innovative, price competitive, giving service that the big boys cannot or will not be prepared to give.

It's certainly going to be a very interesting few months & years ahead. Plus competition has got to be good for us consumers.

[dizzi]

Jan 29, 2013 18:40:36 GMT Raffles said:

WOW Dizzi, what else have you done today?

Short answer: lots. Long answer: far too much to type here

Thanks for the response Raffles. Nice to know I'm not just talking into the void.

[Bluefish]

For mods and equipment then i agree with what you have written dizzi, but for juice we all like different things, or different vendors, so I can see them still making and selling them, I mean they could give away most juice and I wouldn't be interested, I have expensive tastes, unfortunately.

[Gordy]

really good post Dizzi

the whole reason certain vendors can sell cheaper is because they buy bigger and sell more ...its the reason supermarkets killed local trade ...but its us that allowed this to happen by buying from them ...we have ourselves to blame and in the end we will say the same thing about UK ecig vendors ...it'll be a shame but we can stop it happening

buy more from the UK vendor and then they will be able to buy more and sell cheaper ...simple as

again great post and a great debate

[dizzi]

Jan 29, 2013 19:06:21 GMT Bluefish said:

For mods and equipment then i agree with what you have written dizzi, but for juice we all like different things, or different vendors, so I can see them still making and selling them, I mean they could give away most juice and I wouldn't be interested, I have expensive tastes, unfortunately.

That's true for you Bluefish (and for me as well), but we have the advantage of being here at the beginning, where all workable ecig stuff needs a certain amount of research to come by, where there is room for experimentation with flavours etc because the maker isn't having to spend out for a million 10ml bottles in a week to test the market. What I'm talking about is post-explosion, the time after ecigs become mainstream and overtake analogues in terms of customers and sales. At that point the average vaper won't give a stuff about gourmet juices, any more than the average smoker gives a stuff about luxury pipe tobacco or hand-rolled cigars now. They will only care about price - and they will buy everything from the supermarket, or nip to the corner shop. Us gourmet vapers with a passion for Frogster's Lemon Meringue Pie will be few and far between.

I personally doubt that Froggie et al will go out of business because there will always be a market for the vaping equivalent of a hand-rolled cigar - so long as at least some vapers know it even exists. I'm more worried about the people who mainly sell ego batteries, starter kits, cartos, clearos and bought-in juices. It's those people who will lose the most business when the supermarkets take over.

[scaffman69]

Surely its upto the consumer and their choice aint it what they wanna buy whether local produce that costs a bit more or not so local thats cheaper, its not for them to worry about the vendor selling it going broke. Like said above the best ones will survive and the not so will be left by the wayside, which i think also gotta be better for us.

[Deleted]

1 UK website is selling the zmax for 90 smackers the group buy it comes in at about 35 , .. no brainer

As much as I would like to support our UK vendors with those price comparisons it isn't possible .

I do however spend on Griz juice and other stuff when I need it , my bonus is VE is just around the corner

[jakethevape]

And this is the reason I am not going to ever buy from China and wait for some "slow boat" etc. Not impatiance on waiting nor bargin hunting.

Yes its a recession, yes money is hard to come by at the moment. But I would still feel happier knowing I gave a UK vendor my business (even tho most of their products are from china) because that is just me. Support our country and give back something to another (IE: Keep people in employment, profit is there to make a living and sorry this country is expensive)

[scaffman69]

Jan 29, 2013 19:28:56 GMT jakethevape said:

And this is the reason I am not going to ever buy from China and wait for some "slow boat" etc. Not impatiance on waiting nor bargin hunting.

Yes its a recession, yes money is hard to come by at the moment. But I would still feel happier knowing I gave a UK vendor my business (even tho most of their products are from china) because that is just me. Support our country and give back something to another (IE: Keep people in employment, profit is there to make a living and sorry this country is expensive)

Well they`ll be getting most their stuff you be buying from china, why not cut them out and save plenty, its a no brainer to me, i aint got lots of cash to throw around to keep a lame buisness afloat, yes your right theirs a ressesion on.

[dizzi]

Jan 29, 2013 19:16:12 GMT Gordy said:

really good post Dizzi

the whole reason certain vendors can sell cheaper is because they buy bigger and sell more ...its the reason supermarkets killed local trade ...but its us that allowed this to happen by buying from them ...we have ourselves to blame and in the end we will say the same thing about UK ecig vendors ...it'll be a shame but we can stop it happening

buy more from the UK vendor and then they will be able to buy more and sell cheaper ...simple as

again great post and a great debate

The problem is Gordy, that for some it comes down to buying one apple from a greengrocer or 4 from a supermarket for the same price. Or 2 and a few spuds. You get the picture.

We want the greengrocer, we want to buy from someone who knows about and cares about what they are selling. But when it comes down to buying 1 apple or 4, with no really noticeable difference in the quality and taste of the apple, enough people will choose to buy from the supermarket that the greengrocer's position becomes untenable and they go out of business.

Also, one can't buy a bag of sugar, a box of cereal, a packet of tea, a bottle of milk, a loaf of bread at the greengrocer. One would have to go to several different shops for them, possibly needing to pay extra for parking at each one (shipping cost analogy there) and also be paying upwards of twice as much per item. I don't know of one single vendor who sells everything I want to buy. I use several, for different things.

Like Karma, I buy from a variety of places. Mostly in the UK, occasionally (once so far) from China. I will continue to buy juices mostly in the UK, but hubby's fave menthol and whisky are the Chinese ones. He's your "average vaper" for the purposes of the above argument. If it were left up to him, he'd buy whatever slop the supermarket sold, so long as it worked and was cheap and easily available. I'm more the gourmet, I like hand-dyed yarn, good quality beef, local veg, hand made juice - and I'm willing to pay a little more and research a little more to get a little less quantity but a lot more quality. However, I am also feeding a family of 4, so sometimes quantity has to win out, so long as the quality is "good enough". I also like really good quality clothes, but buy mine from Asda because I can no longer justify (or afford) spending £200 on one item of clothing.

So it's really not as easy as "buy from the UK to keep UK vendors going". I have to keep my family going too. And like I said, if my only option was to buy the Vamo in the UK I wouldn't have bought it at all. Incidentally, the batteries and the charger, which I also wouldn't have bought, DID come from UK vendors.

[Raffles]

Following on...

I can't see the big boys (Supermarkets, Big Tobacco etc) selling more than the look-a-likes. They've already got a captive market and will just transfer them to a new cig. (while pontificating how they're saving us from harm!). They will still make their billions without much effort.

Meanwhile the likes of us (and the number will grow exponetionally) will be looking for something better. This is where the independent retailer has a distinct advantage in catering for us. They can source new products for those who don't care a fig about what it looks like, they just want a great vaping experience, using whatever is the latest technology.

Yes, their market will be far smaller, but their ROI (Return On Investment) will be very satisfactory.

PS Relating to buying direct from China or USA (I'd rather someone else had the hassle, and am willing to pay a little more for next day delivery, plus recourse if something goes wrong). I believe there are already problems with importing ejuice and I might as well be a retailer if I'm having to sort that out!)

[dizzi]

Jan 29, 2013 19:27:27 GMT @storm said:

1 UK website is selling the zmax for 90 smackers the group buy it comes in at about 35 , .. no brainer

As much as I would like to support our UK vendors with those price comparisons it isn't possible .

I do however spend on Griz juice and other stuff when I need it , my bonus is VE is just around the corner

I don't think most vendors rely on profits from ZMax sales and the like. The highest markup percentagewise is on juice. I make juice for less than £1 for 10ml, plus the price of the bottle. Vendors need labelling, premises, testing, staff, etc which all adds to the cost. However, they are buying their ingredients in bulk, making the actual juice a lot cheaper than I can make it for. Nevertheless, selling 100 bottles of juice at £1 profit each is a better money spinner than selling one ZMax at £55 profit - and I'd be willing to bet that they sell more than 100 bottles of juice per ZMax sold.

[dizzi]

Jan 29, 2013 19:50:30 GMT Raffles said:

Following on...

I can't see the big boys (Supermarkets, Big Tobacco etc) selling more than the look-a-likes. They've already got a captive market and will just transfer them to a new cig. (while pontificating how they're saving us from harm!). They will still make their billions without much effort.

I think they will. I think they'll sell what we think of as entry level kit - ego type batteries, cartos, clearos etc. Look-a-likes are not going to take over the smoking world. People try them and either give up on ecigs entirely or come to fora like AAEC in the search for something better. And we recommend Rivas, egos, cartos, clearos - and this is the kit that gets people off analogues. E-Lites only takes up a small corner of the NRT shelf at my local Morrisons at the moment, and I can't see that changing until there's a lot more vapers than we have now.

It's not going to happen for a while. If the EU has its way it won't happen at all. But at some point, legislation allowing, there is going to be a tipping point and it's then that the supermarkets will start to stock what vapers actually want to buy. And then new vapers will buy what the supermarkets want to sell. And the greengrocers of the vaping world will begin to disappear, even as the number of potential customers increases exponentially.

[millerkev]

Jan 29, 2013 18:51:37 GMT dizzi said:

Jan 29, 2013 18:40:36 GMT Raffles said:

WOW Dizzi, what else have you done today?

Short answer: lots. Long answer: far too much to type here

Thanks for the response Raffles. Nice to know I'm not just talking into the void.

well it did take 3 hours to read it