Some entrepreneurs enter industries because they’re passionate about those industries, and others enter industries for the enormous potential profits involved. The vaping industry has attracted no shortage of both types of entrepreneurs because e-liquid is both potentially very profitable and something that all vapers need. The industry has matured rapidly over its first decade, though, and starting an e-liquid brand in 2020 isn’t nearly as simple as it once was. You’ve got to deal with major legal and production hurdles before you even begin. Once you have a product, you’ll find that e-liquid is incredibly difficult to market due to the level of competition you’ll face. So, do you have the right stuff to succeed in the vaping industry and compete with the big players like V2 E-Cigarettes UK? This guide will explain how to start an e-liquid brand in 2020.
How E-Liquid Brands Comply With Vaping Laws
The first thing you need to know about starting an e-liquid brand is that, for a new product, complying with vaping regulations in the United States is virtually impossible. The FDA’s rules state that, before a new vaping product can even be brought to the market, the product’s maker must submit an application to the FDA showing that the product will not encourage new nicotine uptake and will benefit public health. Compiling such an application costs well over $100,000; the high cost of the application process has prevented any new e-liquid brand from appearing in the U.S. since 2016.
It is possible in the United States to buy out an existing e-liquid brand, but all companies in the U.S. vaping industry are operating on borrowed time. All vaping products must have pre-market applications on file with the FDA by May 2020, or those products will be pulled from the market. Unless you have a huge budget and a concrete plan for obtaining FDA approval – or you want to move the business to another country – buying out a U.S. e-liquid brand is probably a bad idea.
The world’s second-biggest vaping market – the United Kingdom – is much more permissive where new e-liquid brands are concerned. New e-liquid makers must conduct emissions tests on their products and register those products with the appropriate health authorities. After you’ve done those two things, you can begin doing business.
How E-Liquid Brands Develop and Produce Their Products
In the early years of vaping, some small business owners actually launched e-liquid brands from their kitchens, mixing and bottling each product by hand. That’s no longer practical or really even possible in 2020 due to the industry’s current manufacturing standards and customers’ expectations. You can build your own clean-room production facility, but that’s prohibitively expensive.
The way forward for most new e-liquid brands is to work with white-label manufacturers that handle the mixing, bottling and packaging duties. Working with a white-label manufacturer isn’t expensive, and many manufacturers even have pre-defined e-liquid blends that they can produce and bottle for you on demand. If you prefer to have a product that’s entirely your own, a white-label manufacturer can also help you create your own custom blends and produce those blends for you.
How E-Liquid Brands Distribute and Sell Their Products
An e-liquid brand has three potential types of customers, and you will want to market to all of those customer types for the best chance of success. The three types of customers that buy from e-liquid companies are:
- End users
- Vape shops that sell to end-users
- Distributors that sell to vape shops
When you sell your e-liquid direct to consumers, you can charge the highest price – but you’ll also spend a lot of time packing and shipping single-bottle and two-bottle orders. When you sell to businesses, on the other hand, you’ll handle bulk orders that require less effort for fulfillment. Many e-liquid companies find that business-to-business sales provide the greatest part of their revenue, so you’ll want to get your brand added to as many distributors’ catalogs and store shelves as possible. Here are two tips that can help you do that.
- Vape distributors aren’t multinational conglomerates; they’re small businesses. Don’t be nervous about contacting distributors and asking them to add your e-liquid line to their catalogs. Before you start calling distributors, though, make sure that you have the inventory and production capacity to handle bulk orders. You need a professional product that’s ready to sell and will look great on vape shops’ shelves. Don’t forget that any product sold to a distributor will be marked up twice – once by the distributor and again by the vape shops that buy from the distributor. The pricing that you offer to distributors will need to be very attractive.
- Get your e-liquid line on vape shops’ shelves by any means necessary. Start by talking to the owners of vape shops in your immediate area and offering free product bundles. Vape shop owners will find it very difficult to turn down a free product offer. If your e-liquid sells, they’ll be back for more.
How E-Liquid Brands Market Their Products
Getting the word out about a new product is one of the most difficult – not to mention costly – things to do in the vaping industry.
There are two key challenges in marketing an e-liquid brand.
- You can’t pay Google or social networks such as Facebook for traffic. All mainstream advertising platforms lump vaping products and tobacco products together and do not accept ads from any vaping brands.
- The vaping industry is already flooded with e-liquid brands, and many of those brands get their products from the same white-label manufacturers that you’ll be using. Your product probably won’t taste different from the competition, so you’ll need to differentiate your brand in other ways.
Promoting an e-liquid brand in 2020 requires plenty of time and money. To make your launch successful, remain mindful of these three key points.
- You should spend at least as much time on branding – and on the image of your brand – as you do on any other aspect of the launch. You won’t be able to differentiate your brand on flavor alone, so you’ll need to appeal to consumers’ emotions somehow.
- Your website’s content is incredibly important. You’re not going to get on Google’s first page for terms like “e-liquid” – not right away, at least – but writing useful informational content can help you generate web traffic. Once you have traffic, your investment in creating a great brand image will pay off. Don’t forget that your product description text needs to sparkle!
- You can’t use Google as an advertising platform, but you can advertise on vaping websites, forums and publications. You can also ask owners of vaping blogs and YouTube channels to review your products. Remember that product reviewers will almost always want compensation for their time, so you’ll need to have a significant budget in place. Product reviews, however, can generate plenty of hype for a new e-liquid line.