Is vape profitable?
The market potential of vape can be seen from the large amount of capital invested in this extremely risky industry. vape was once regarded as a product that replaces traditional cigarettes. The traditional cigarette market is so big, as long as vape can occupy a small part of the traditional cigarette market, even if it occupies a small part of the cigarette market. huge. A huge market may bring huge profits. This is also the purpose of many merchants who follow the trend and enter the vape market. So is the profit of the vape market really that high?
One of the important reasons that the vape market can attract many merchants to join is the super high repurchase rate of vape, which is the basis for vape merchants to maintain high profits for a long time. The profit of selling an vape product can be about 40%. If only this is the case, the attractiveness of the vape market is not so strong.
A common product may be sold for a few years, but every customer may be a new customer during these few years. In order to maintain sales, merchants should not continue to spend big prices to promote their products. However, a product with an ultra-high repurchase rate is not the same. Many times when customers receive a product trial, they will have repeated purchases. In this way, whether it is online or offline promotion of the product, it only needs to increase when the new product comes out. Intensive promotion, there is basically no need to invest in the later stage. As long as the product is good, customers will quickly accumulate, and product sales will also increase explosively.
The profit of vape does not lie in the vape itself, but is mainly concentrated in consumables, that is, e-liquid. The cost of e-liquid in vape is extremely low, but the profit from sales to customers needs e -liquid to achieve.
In order to understand the profit of vape, let’s take a domestic vape brand as an example. In 2018, in the first year of its establishment, a domestic vape brand sold 500,000 cigarette sticks and 5.9 million cartridges. Revenue of 132 million yuan. By 2019, the brand's revenue has soared to 1.549 billion yuan, and it has reached 2.201 billion yuan in the first three quarters of 2020.
We can see from the comparison of the sales data of vape and cartridges in the first year of establishment that the sales volume of cigarette cartridges is more than 10 times that of vape, and the cost of an vape is about RMB 70, which is given to the seller. The price of the vape is about 130 RMB, so the profit of an vape brand is about 60 RMB. The cost of the cartridge is about RMB 6 and the price given to the seller is about RMB 18, so the profit of a cartridge is about RMB 12, and matching the sales volume, the profit of the cartridge is twice the profit of the vape. Above, this does not include a large number of customers using wild-card cartridges or refilling cartridges with e-liquid.
From the perspective of overall profit, vape's profit is also quite objective. The brand's gross profit margin is maintained at about 40%. Except for a loss of 287,000 yuan in 2018, the brand started to make money in the second year. The net profit in 2019 was 47.75 million yuan, and the net profit in the first three quarters of 2020 was 109 million yuan. We must know that this is still in the case of the online ban on vape sales and the impact of the offline epidemic.
In summary, compared to other industries, vape profits are quite substantial. At the same time, the vape market has the characteristics of a relatively new industry, a huge market, and huge potential. Therefore, if the policy allows, it is not necessary to enter the vape industry. considerate.
Prev:Can the vape market finally succeed?
Next:vape offline competition is fiercer
