How the eCig industry works
Ok so, you want to know more? Interested in how the whole thing comes together?
Let start with the absolute basics, what we do.
At it's core, we contact a company in China and negotiate a price for one or more of their products, we pay, they ship, we double the price and sell it to you.. sounds like sweet gig doesn't it?
Heck, why isn't everyone doing it? Well it brings me to the number one question asked...
Why are the prices so high on eCig retailer websites when I can see the prices from China manufacturers websites?
This one got me at first but when looking into it, it is easy to see "why". A lot of people think that if something costs 1.00 from China, they should be paying 1.00 here in the USA. But it's not that simple. I can understand why someone would feel this way, but knowing the process helps to "soften the blow" of the cost of eCig gear.
A vendor, such as myself takes all the risk, I look at products in a catalog or promoted by a manufacturer and have to decide if it is worth investing a few thousand dollars in. If it fails, is poorly made or has some other issue, I can't return it for a refund. The costs involved in running an eCig business are staggering. Almost every eCig vendor is doing this as their only source of income and must support a family. You're buying Chinese products but you are supporting American buisinesses.
Just to list a few of the costs involved:
Credit Card Processing and Bank Fees
Business License, incorporating and other business related fee's
Shipping Fees (foreign and domestic)
Packaging and labeling fees
Age Verification Fees
Local, State and Federal Taxes
Business and liability insurance
Lost shipments, damaged Goods, Bad products
and about 100+ more I haven't listed, and we have to make a living on top of that.
100% markup sounds like a lot until you cost it out.
Now don't get me wrong, a well run eCig shop can make money, but it's not as easy as ordering bulk from China and shipping it to paying customers. There is a lot of risk involved.
Why doesn't China sell direct? Well they do, in some cases, you could probably get some manufacturers to send you products by ones and twos. But there is a problem with that. First, they do not care about you, you would be a very small fish in a very big pond, a return would be next to impossible and your shipping cost would be exorbitant for a small order. Almost every manufacturer is "on time order" which means they make it when we order it, there is no stock, stock doesn't generate revenue and they are extremely competitive in China. if you placed an order you would almost certainly get the worst of the bunch from someone else's order, with Vendors, they are competing for repeat buisness so they do the best they can to send it right the first time, or we will not buy again, they would not care as much about a one or two order.
So that kinda explains the cost, what about the quality? Why is the quality sometimes so poor?
Competition. Cheaper, faster, cheaper faster. One company comes out with a good product and in DAYS there are copies everywhere and the new company is selling it for less. They may be using cheaper materials because to stay competitive, every penny counts, they may be using new equipment because every penny counts and they may be using untrained workers because every penny counts. You get the idea. And if they sold a perfect product they'd quickly run out of customers.
There are some GREAT companies out there, Smoktech and Vision put together some very good products but even they are caught up in the cheaper faster mentality. So sometimes some products are less than stellar, this is why you see countless revisions of the same product. V1 has thinner tubes, V2 has thicker tubes, V3 has longer wicks and on and on and on.
We are the guinea pigs, it's not a good thing, but it's the reality we are stuck with.
Very frustrating, why can't they just get it right the first time? (hint: every penny counts) trial and error is not part of the equation, WE are the trial and error. If there is a bad product they say "sorry, we'll fix it, how many do you want to order"
But they are getting better, every week something new comes out that seems to out perform the preceeding product. Sunny skies are coming I think.
so stay tuned :)