Latest posts by Delton Childs (see all)
- How I’m Selling Vaporizers That Cost Over $100 - October 26, 2015
- Bernie Sanders Wants To Reform Cannabis Prohibition - October 14, 2015
- My First Smoke Shop Disaster - October 7, 2015
- How Was The eJuice Manufactured? - October 2, 2015
To capture a larger percentage of this growing market you have to do the math. Huge policy changes in the cannabis industry, public option, public policy coupled with the explosion of the vaping industry in the US has created an explosive market for Smoke Shops & head shops across the US. There’s money to be made out there. However one of the greatest challenged smoke shops still face is just Staying Open, why is this? Let’s try to find out & do some quick math.
While about 60% of everyone has “smoked” at some point in their lives, in reality every day smokers & others who frequent head shops usually only comprise about 1% of the population in the US. These are the customers you recognise and probably talk to when they come in your shops. If that 1% sounds way too small, keep in mind… only about 20% of American even go to church. Weather we like it or not, the smoke shop industry hasn’t reached religious proportions yet so your market share of the total population could be significantly smaller… or larger.
Let’s take our hometown market for instance, San Antonio. We do manage the number one ranking headshop site in SA btw. The population is just over 1.3 million.
Here’s the Breakdown of Probably Smokers in San Antonio
SA Population 1.3 million
Probable Percentage of Daily Smokers 1%
Total Daily Smokers = 13,000
That’ Sounds Great Right! No, It’s Not…
We’re the Seventh largest city in the USA… bad news… we have over 30 smoke shops in San Antonio & those 13,000 are not going to be all OUR customers only… and still keep in mind… our model will assume ALL 13,000 come to a head shop EVERY MONTH at least once hell or high water and spend at least $5.00.
We could divide that 13,000 customers a month among the 30 headshops (remember, in reality there are over 30 shops selling almost identical product lines). We know things don’t work out that way and every head shop or vape shop ends up somewhere on this sliding scale. Ball-parking it, if they were perfectly divided that would only leave about 450 customers per month per shop. If on average every single person no matter what spent at least $5.00 and that would only make you just over $2000.00. A person can barely live on that & your business can’t survive on it and grow for sure.
There are a lot of variables in this oversimplified model & none of the ones I use matter, only yours do. This is happening in real time right now. Some smoke shops & vape shops are capturing more of their market share, others less and will no doubt close. Smoke shops that have accessory items and other things may also be pulling a larger percentage of the target population due to sales on smoking related or “lifestyle items” too. All shops are different.
The Main Take Away:
If you don’t start to think about capturing a larger percentage of your potential customer base you will start slipping down that sliding scale of revenue.