Starting a new vapor shop?

tevionfox

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I'm thinking of starting my own business and after a bit or research I have decided to look into opening a vapor shop. I have seen a shop half a mile from the town center, for £100 per week. I have never had my own business so I'm looking for the basics, and do/don'ts especially what to look out for when running a shop. Any advice would be good advice. Thank you
 

Karimbo

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    I wanted to get into 3 years ago, i decided against it, even then it was established with lots of large players in the market.

    Vape/ecig products were banned in adwords, ebay and other platforms meaning you had to do SEO in order to get a website to rank for it in order to sell (or use traditional marketing methods, flyers, magazines etc).

    I had a quick look back then and ecigerette was really competitively SEO'd with 3 more years on top of that you wil really struggle to get on the first page of google I think.

    Not impossible, but you will need deep pockets to make a dent in the search engines.
     
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    silvermusic

    Vapor/vapour/vape or Vaping is a term used for the ecig or electronic cigarette.

    Ah ha, got it. Not a subject I'm too familiar with. Although from what I've seen and even putting aside what's already been said about being a tough market, it seems the government is keen to curb the use of any sort of non-medical drugs as are those providing sales and payment services. I wish they'd do the same with alcohol which is a far bigger problem in society.
     
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    fisicx

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    II have seen a shop half a mile from the town center, for £100 per week.
    If it was a popular location it would be a lot more than that to rent. But add 10K for fitting out then stock, insurance, promotion and marketing, security and staff wages you will need quite a wodge to even get started. You will then need to attract people away from their usual sources or ecigs which could take quite a while.
     
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    Karimbo

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    ahh, an actual shop instead of an online one.

    You could have an angle on this, perhaps an artisan ecig shop where you can sell variety of products and testers to try the different flavours. I personally don't like retail operations - too demanding of your time. With an online store you can pick you hours essentially - you can work 14 hour days when you're really working on the marketing, website content etc. On other days you can decide to take it easy and just do the fulfilment which doesn't take more than 3 hours.

    Biggest gripe with store retail is that you have to be at the store 9-7 Mon-Friday and weekends too. Unless it's a real lifestyle business I would personally never get into it.
     
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    tevionfox

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    Thank you all for taking the time to give me you fed back. The reason I initially thought about this, was due there that had opened a few s Miles away from my home. His business has gone from strength to strength. This was two years ago, he is situated on a high street with no parking yet people like myself still came from all over. Recently there has been tree new stores that have opened and all doing well I must add.

    Now the shop I am looking at is in another town with only one store there. So with a little healthy competition, I think I could be in with a chance.

    I will be working for myself so no staff overheads, but I must agree the hours will be long including weekends. So I will be calling favors from my kids (as they are old enough) from time to time. But the shop is very clean not alot of internal work needed at all. I know marketing will cost it always does.

    I had thought about an online store, but there are just so many out there the market has become saturated. So I took a side step away from it although I will need one for the store. Contradiction in terms lol. I do like the idea of a shop as in my experience when I first started, they were so helpful as ecig's do have a tendency of going wrong. But the stores I have visited have been so helpful with advice. It's a more personal service which you don't receive online.

    I do like the idea of a pop up shop. But any ideas on how you go about it?

    And again thank you all for taking the time to respond.
     
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    Karimbo

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    Consider a pop up shop in a shopping centre to try out you idea or do the markets, but I doubt many make much money selling them

    i have my doubts as to whether a shopping centre like westfields [as an example] would allow vaping/ecig products to be sold.

    It's not illegal, but it will attract bad publicity for the shopping centre. Probably the single reason why google Adwords, ebay, amazon etc won't allow you to sell vape/ecig products because you can bet nagging bloggers and columnists would make a big issue out of it. Note: some allow the hardware to be sold, but not the tobacco, but the tobacco is where the money is at.

    Also part of the reason why these small traders are making a killing in ecig is because the mainstream have refused to sell it.
     
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    Karimbo

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    There are three of these shops (all with the same branding) that have opened near me. I've never seen a single person in any of them, and I go past them regularly at various times. It's certainly doesn't seem to be thriving.

    you probably dont need a lot of customers if you have 4x markup on a highly addictive product that you sell to the same customers over and over again.

    with regular cigarettes you left a massive trail of stale smoke, you mouth, fingers, clothes all stank of it. You'd get tar all over your lungs and throat and your body would hate you for it. Most people fell into a quota a day. They would smoke 20 a day on average because they couldn't deal with the side affect of smoking any more.

    With vaping/ecigs you can smoke as much as you want; guilt free. My tropical fish guy is glued to his vape. Every other week I go there I see him with one hand on his vape. They consume a ridiculous amount of nicotene and 10 years from now we'll see the effective of that.
     
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    tevionfox

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    To be honest the Markup yields more profit than food. That's what caught my attention, so there is plenty of margin to play with when it comes to competition. I really would be in a position to sell at lower prices which would beat a lot of online markets and still be making a healthy profit. The reality is opening stock cost is quite minimal with a mass of profit. Still playing on my mind to go for it. Also regular customers tend to consistently upgrade, so regular customers do tend to spend anything from £10—50 a time.

    I do feel I researched into this field, and politically and on the health front it continues to gain ground as the ecig/vape Union ECITA has obeyed the guidelines set out for them, hence big companies have started to get onboard with their own products and devices which price wise is astronomical and disposable. Whereas the vape pens are far cheaper and reusable.

    The political side of things have been debated for about 8 years in the UK now. With the constant threat of taking it off the market. Now the bigger players are involved, I can't see them backing a dead horse.

    But I must admit the shops I go to are always empty. But the new signage, bigger stock, expensive new products and price rises indicate they are selling well.
     
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    silvermusic

    Markup yields more profit than food

    So do many things. From what you've said so far I would suggest your heart and passion for this be a viable business is far different from the cold, calculated reality. Under-cutting competition as a USP is only a sustainable business until someone with deeper pockets to blow more money quicker than you comes along.

    With commodity products most people are price whores, as soon as Fred Bloggs down the road is a few pence cheaper whoosh, they're off. Start selling much below everyone else and you may suddenly find wholesalers / distributors will stop supplying you for some trumped up reason.

    Don't let the glamour of this business blind you of the reality of it, same applies to any business.

    There's also the very real possibility that card/payment services will stop supplying their services to such businesses because of public perception, pressure or even a future change in the law.
     
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    Karimbo

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    I really would be in a position to sell at lower prices which would beat a lot of online markets and still be making a healthy profit.

    It would be nigh on impossible to compete on price with online retailers. You have much smaller scale and much bigger overheads.

    They're shipping from warehouses, in bulk skimming smaller margins but doing higher volumes. You cannot possibly beat them on price.

    Online will always be cheaper and those who wants to buy even cheaper will buy direct from chinese sellers from a site like ali baba express! A store will attract those who aren't so price sensitive and want better customer service, quick availability etc. You will also get first timers come round who wanted to try vaping want a store owner with a big range to sell them a kit - but once they have their feet on the ground there';s nothing stopping them from hitting an online store which can beat your prices.
     
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    tevionfox

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    I do agree those points. I see what you are saying about super cheap. But I have seen a lot of your eBay, Amazon type sellers and small sites charging top prices regularly. It was those types I was referring too as they are a big part of the market. I couldn't possibly compete with Alibaba or those type of companies. I think I would price match where possible? But could be opening some dangerous flood gates? Well as always food for thought. Thanks for your feedback.
     
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    Karimbo

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    I do agree those points. I see what you are saying about super cheap. But I have seen a lot of your eBay, Amazon type sellers and small sites charging top prices regularly. It was those types I was referring too as they are a big part of the market. I couldn't possibly compete with Alibaba or those type of companies. I think I would price match where possible? But could be opening some dangerous flood gates? Well as always food for thought. Thanks for your feedback.

    the ebay sellers are probably just using ebay as a way to acquire customers. they are not allowed to sell nicotine ecigs, so what they're doing is just selling atomisers and liquid with no nicotine or any tobacco "allegedly". I think after you buy one you will get your stuff and then a brochure with all the nicotine products to buy from their store.

    I used to sell on ebay and would sell stuff for really cheap just to get a customer that I could send a brochure too.

    You'd probably pay £1 a lead for such a targeted list of ecig buyers - so whats better than making £1 profit for that lead! Essentially getting paid for the lead.
     
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    BartJr

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    I'm thinking of starting my own business and after a bit or research I have decided to look into opening a vapor shop. I have seen a shop half a mile from the town center, for £100 per week. I have never had my own business so I'm looking for the basics, and do/don'ts especially what to look out for when running a shop. Any advice would be good advice. Thank you
    There is a shop on my street, not very popular location but I see the owner all the time at post office so I'm guessing most of his ravenues comes from the online sales.
     
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    Karimbo

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    im just curious, is it possible to get product liability for these products? What happens if 5 years down the line it's found that the e-liquids contain a carcinogenic chemical (very possible given it's manufactured in china). Several hundred people die. Will there be sufficient product liability available to prevent being sued?
     
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    tevionfox

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    There is a a company called ECITA which is like Trading standards as such. They work along side the government regulations advising traders on the sale of ecig/vape goods. They also advise the larger uk suppliers, and uk based vape oil companies. There are strict guidelines on making and selling. So if the ingredients proves to be dangerous it will be changed and inforced. So I suppose there is some kind of liability in place.
     
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    fisicx

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    All of which is good but it's still an expensive business to start. It will cost you a good deal more than £100 per week. Even if the shop has been fitted out you are going to need to buy stock, epos, security systems, insurance, utilities and pay your wages.

    Have you spend a day in your car watching the footfall? Do enough people pass by the shop each day, have you estimated potential customers? For example suppose 1000 go past the door each day and you observe 10% vaping. Assume 10% come in to buy a product. That 10 customers per day. Will you get enough business to cover your costs each month?

    As to building a website, that's the easy bit. It will then cost you £1000/month to market the site (because there is so much competition doing the same).
     
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    fisicx

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    Check with the landlord, they should be able to give you a figure but if you are open 12 hours a day 7days a week then you could be paying £50 - £100/week. I also forgot to add business taxes to the list of bills.

    So costs are mounting up before you have sold your first products.
     
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    MOIC

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    Create your own brand.

    Add value for money extras.

    Buy direct from factories (not via a wholesaler)

    Create attractive packaging and cases to keep all "the bits" in.

    Target each specific age group with packaging/cases that will appeal to each group.

    Offer a wide variety of flavours, source unusual ones to stand out. (But keep the tried and tested in the range)

    Make the website & any advertising "sexy" to target the desired audience.(Sorry anti vapours/e cigarettes, but it's better than smoking tobacco).

    Ensure that all certificates are properly displayed and are verified.

    We supply to companies in the US, if you need any advice, feel free to PM me, or contact direct by email:

    [email protected]

    Go for it (It will only get bigger)

    Best of luck.
     
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    Karimbo

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    A shopfront is going to cost you considerably more. Expect to pay £2000 a month for a tiny shop on the high street. There are minimum leases for these types of property, typically 3/4 year. 3 months rent payable upfront. This would most likely not quality for SBRR as the ratable value would be £20K+ so expect to pay around 47%ish of the ratabale value in business rates. You will probably need to pay for commercial refuse collection.

    These are costs you have to pay just to get your keys to your shop. Shop fitting is expensive, merchandise - nothing worse than a half empty shop. To fill the shop with tiny expensive items is going to cost you a tonne.

    Nothing is impossible, if you have your heart set on a business and you live and breathe it then you can make it work through sheer grit and determination. But if you're just in it for the money you're probably not going to have the grit to go into massive debt starting a shop and going forward when you're not making any profit for the first year.
     
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    boring-friday

    Hi

    Was just browsing the forum but this is what I do full time, will say how I did it and then tell you my opinion of your problems.

    Started selling on ebay/amazon in November 13, made a website a few months later. Was spending a lot on seo at the start but decided that was a waste, I just made my own e liquid and sold it on ebay (used multiple accounts, bought from myself to move up best match etc) and sold it cheaper on my website, got quite a few people moving over to my website as its a big hobby for a lot, costs around 40-50p per 10ml to make depending on the nicotine strength and sells for £2-10.
    This was easier for me to do as I've vaped for 5 years so have been making them for myself. Opened my first shop in May last year. Rent was £400 a month, spent only £3500 doing it up and worked myself for the first month. As I started getting staff I gave them all a online job too, 1 was incharge of my social media, 1 on forums and 1 i was getting to pack orders, as others have said the shops aren't rushed off their feet, i only need 2 customers a hour to be in profit.
    I got all the overheads covered with my online sales prior to opening, I have 6 shops now, I only sell the big brands (aspire,kanger etc).

    The main problems you'll face are.

    1. You're not a vaper yourself, theres the people who use it just to quit fags but for a large amount its a big hobby, forums like potv or ukvapers always have 2000 users online. Most of these won't like you straight away if you don't use it yourself and these are the ones you want to be telling their smoker friends that you're the place to go.

    2. No offense but you don't seem to know what you're talking about, theres different types of vape shops, you have the ones selling £1.50 batteries for £20 but these are the ones that are coming into issues now, then you have the ones selling the more advanced gear with 40-50% profit margins. (note that I can compete on price in my shops, overheads are low other than wages as I don't have postage costs).

    3. You seem to think the law coming into effect next year is fine for vape shops, I suggest you do more reading, if its left the same as it is now then it will probably be the end of any offline shops. Totallywicked (biggest vape company in the uk) have challenged it and i expect more will do soon.

    4. Product liability insurance, most companies won't offer you this, I'd reccomend apollo insurance but its expensive, more expensive if you're ordering from China rather than the Uk despite it being the same product. Also much more expensive if you want your own brands. I didn't bother with this for the first 5-6 months personally.
     
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    tevionfox

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    Just like to say thanks to you all for taking your time to respond to this thread. I have come to a decision not to open a Vapor shop at this time. I really have taken onboard your comments and advice. I must admit boring-friday I thought hearing about your business was very inspiring. But I have gone back to basics and will be opening a new business online in a total different field which I have many years experience in. I will post the web address on here for more views and advice if anyone is up for it. We all have to start somewhere. Once again thank you all for your time.
     
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    Karimbo

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    There is a a company called ECITA which is like Trading standards as such. They work along side the government regulations advising traders on the sale of ecig/vape goods. They also advise the larger uk suppliers, and uk based vape oil companies. There are strict guidelines on making and selling. So if the ingredients proves to be dangerous it will be changed and inforced. So I suppose there is some kind of liability in place.

    I don't know if something like this is ever going to satisfy my concerns. Perhaps it will limit your liability in the same way the buildings trade is protected from liability caused by asbestos before it was banned from use.

    Quite frankly there are no assurances that what you're importing is exactly what your Chinese manufacturer have declared and there aren't additional carcinogenic additives in it.

    Firstly, we don't know what the long term effects of inhaling these chemicals are. Secondly unless you know what to test for you can't really identify every chemical used in the formulas.

    I stumbled into this article today, hence replying: http://news.harvard.edu/gazette/story/2015/12/popcorn-lung-seen-in-e-cigarette-smokers/?
     
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    Ally Maxwell

    I own a hardware/gift/stationary/diy type shop and sell a range of vaping products along with hundreds of other lines. In the context of what I'm doing, they are indeed very lucrative. As for shopping centres not allowing these products to be sold, that is complete and utter rubbish. Most shopping centres will have at least one pop up vape shop as well as permanent ones. Also, the likes of Superdrug, Lloyds pharmacy, the co op and most other supermarkets and chain chemists sell them.
     
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    MOIC

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    To put your mind at rest, do double testing by an internationally recognised lab testing company (SGS & Intertek can both provide this).

    Do your first test from your supplier country and the second test when landed in your country.

    These tests are conclusive for any chemicals added.

    I tend to think that many issues with scaremongering is financed, or at least encouraged by the tobacco companies.

    Am I being cynical?
     
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    Mr A P Davies

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    I vape. I'm not really into the life style bit of it. I started to get off the analogues two years ago, and hope to drop the digitals next year. New years resolution, and all that.
    Regarding the legislation, I know BAT are lobbying the British government flat out, to get their feeble offering to the vape world, accepted as the only legal way to vape.
    I'm not going to say specifically how I know, but believe me, I do know........
    From what I hear, Vaping has put a real rocket through the tobacco industry, and the blubberment is starting to get seriously concerned about loss of revenue. The industry, and the government, has been caught with their trousers down, and they are really, really, not happy. They are taking the threat to their cash cow extremely seriously.
    It's going to take one massive effort by the vaping gang to block any restrictive legislation. You boys are fighting against BIG money.
     
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    boring-friday

    Theres already new EU laws coming in next May which if enforced properly will make the entire market illegal. Government has said they're going to be jointly enforced by trading standards and the MHRA.

    Last month the MHRA licensed the first e cig which is obviously a crap one that isn't much better than nicotine patches and is owned by a tobacco company.

    Its so corrupt its unbelievable, will be interesting what happens when the 2-3 million users see that they can no longer buy any of it with a EU referendum just round the corner
     
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    ECigDirect

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    We've recently posted a blog post on the TPD regulations. I'm not able to post links here so I've no other choice than to copy and paste it here so I do apologise for the long post! You can find similar information relating to e-cigarettes on our Ashtray Blog.

    The EU Tobacco Products Directive: What Retailers and Shop Owners need to know
    A few retailers have asked me how the EU regulations on e-cigs will affect them.

    If you’re not heard of the TPD before, it’s part of the Tobacco Products Directive (article 20). Although designed for cigarettes, e-cigarettes were included in the badly written and designed article 20.

    Numerous rumours are swirling around – many of them hopelessly wrong. Only last week I was told menthol e-liquid is going to be banned. (It’s not!)

    Last week one of our resellers sent us through a comprehensive list of questions, which both spurred me into action and steered the format of this post!

    Do note that legislation in the UK has not yet been finalised. The information here represents what we know now.

    We’ll keep this post updated, so feel free to send questions through (contact detailshere!) or leave a comment under this post.

    (Protest is still continuing against the TPD. If you want to get involved, details of the next even can be foundhere.)

    1. Are e-cigs now medicalised?
    No. Thanks to the efforts of dedicated vaping activists, the EU’s attempt to medicalise e-cigs was defeated.

    While companies have the option to go for a medical license, this is not mandatory. In any case, the costs are beyond the resources of small to medium sized companies.

    2. As a retailer, will my shop need any form of Special Licence or Insurance under the TPD?
    No. However, we always recommend you have insurance, and buy from suppliers which have product liability insurance.

    3. Besides product knowledge, would I or my staff need any extra training to sell e-cigs?
    You do not need anyadditionalproduct knowledge or training. However, you should already have a knowledge of General Products Safety Regulations (2005). Do be careful to follow age restriction guidelines . Failure to do so could lead to a ban on selling nicotine. We’d also advise a good knowledge of battery safety info.

    We have put together a guide to compliance with age restrictionshere, and an illustrated guide to battery safetyhere.

    4. What is going to happen with imported liquids – can we still sell them?
    E-Liquid now has to be made with EU or USA pharma grade nicotine. At present this excludes Chinese manufacturers, and until recently we have not seen any making efforts to comply.

    In addition, e-liquids will need to undergo testing, including emissions testing, with a submission being made 6 months before sale is allowed.

    It’s possible that some of the larger USA e-liquid companies will be prepared to fork out for compliance, notifications and emissions testing. However, the majority of companies we’ve spoken to know little about the TPD.

    5. So, the new regulations stipulates 2ml Cartridge, does that then now include Refiller/Rebuildable/Dripper Tanks?
    Unfortunately so. One government document appeared to suggest tanks would be excluded, however the restriction on tanks was clarified in the2015 ECig Summit. However, we’re not sure to what extent it will affect parts for rebuildable clearomisers.

    6. As a retailer, do I need to carry out testing and submit notifications?
    The onus for testing and submissions falls on the manufacturer and the importer. If you are importing the devices, you will need to conduct the tests and submit notifications to the MHRA. Given the costs of both testing and notification, this is not likely to be feasible for smaller retailers, especially those carrying a wide range of stock.

    If you are not importing or manufacturing, you will not have to conduct tests or notify products.

    7. Why is the MHRA consulting about costs? Will I now have pay a fee to sell e-cigs?
    The MHRA plans to charge manufacturers and importers fees to cover the costs of receiving and reviewing submissions.

    The proposed fees are:
    • Submitting a new product: £220 per sku
    • Service fee: £60
    • Modification fee: £110
    These are not set in stone. The MHRA are currently consulting on the costs. We believe they have underestimated the revenue likely to be generated by submissions, and there is the potential to have these costs reduced.

    These costs will only affect you if you are a manufacturer or an importer.

    8. What is going to happen with batteries, box mods, variable voltage and wattage devices?
    Batteries and mods will not be affected by the legislation.

    9. What about clearomisers and rebuildable devices?
    All clearomisers will have to undergo emissions testing. Manufacturers and importers will need to submit them to the MHRA 6 months before being put on the market.

    There is also a leak free refilling requirement.

    Existing standards for leak free refilling are fairly simple. For example, to check if a container has leaked, you simply wipe the container and see if there is liquid on the outside. Companies like Japan Tobacco are assuming that these existing standards will be applied.

    However, there are additional requirements:
    • E-liquids must have a 1cm long nozzle, and emit no more than 20 drops of refill liquid per minute when placed vertically
    • There needs to be a docking mechanism for the refill mechanism.
    Our current understanding is these requirements are an either/or.

    However, there is still uncertainty around the implementation of the leak free refilling part of the TPD. There are also rumours that the UK government is challenging the need for a docking mechanism.

    10. Do you know of any particular signage I need to display in my store from May 20h 2016?
    No.

    However, you already need to comply with age restrictions guidelines, which includes a requirement to display age posters. You can find a guide to compliance on our blog. Get in touch to request posters and logs.

    11. After May 20th 2016, how long do we have to implement the TPD?
    You can continue to sell existing products until October 20th. If you submit notifications for existing products, you can continue to sell them until May 20th.

    Vaping products after May 20 will have to be compliant with the EU TPD, and have been notified 6 months prior to selling.

    12. I’ve also heard only Tobacco flavours can be sold, and there will be no more “Flavours”.
    Countries have the option to ban flavours other than tobacco. However, the UK has chosen not to take these options.

    13. What other restrictions will there be on e-liquid?
    Glass bottles will no longer be allowed. E-liquid will be restricted to 10ml bottles, and 2% will be the maximum strength allowed.

    13. How will we advertise?
    Advertising will be severely restricted, although again the UK has taken a very minimalist approach to implementing the TPD. We’ll be covering the restrictions (and how to thrive under them) in a later post, but here’s a quick summary:

    What’s allowed:
    • online tutorials and information
    • trade shows
    • trade magazines
    • leaflets/posters
    • billboards
    What’s not allowed:
    • tv/radio advertising
    • product placement
    • newspapers/periodicals/magazines
    • marketing emails
    • online promotions
    • social media marketing
    Keep Your Chin Up!
    The EU TPD isvery poor legislation.

    It was so badly conceived that the scientists quoted by the commission wrote en masse that their studies had been misinterpreted.

    Fortunately, the UK government has been understanding. As a result, we are likely to have one of the most liberal interpretations of the TPD in the EU.

    While the restrictions will increase costs and choice, and reduce the pace of innovation, it’s NOT the end of the British e-cig industry.

    More Information
    We’ll update the post as:
    • information becomes clarified
    • as more questions come through
    Do let us know any unanswered questions you have!
     
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