Your Ultimate Guide to Smart Vape Vending

The term "vaping" has become ubiquitous in recent years, referring to the act of inhaling vaporized nicotine through an electronic device. The vaping industry has seen exponential growth, with the global e-cigarette and vape market valued at USD 28.17 billion in 2023. Projections indicate a compound annual growth rate (CAGR) of 30.6% from 2023 to 2030, according to Grand View Research.  

The majority of disposable vapes are manufactured in China and distributed primarily through online platforms and smoke shops, yielding high profit margins. Wholesale prices for the premium disposable vapes that are the most popular range from $7-$9 and the average retail price is around $25.  Many other vapes wholesale less than $5 per device, but vape vending machines have limited SKU availability and data suggests that customers favor brand over price.  Hence, product selection and pricing are two key factors to consider when entering into a vape vending business.

Despite attractive margins on retailing disposable vapes, the industry faces mounting regulatory challenges, including flavor and product bans, shipping restrictions, marketing rules, and excise taxes on nicotine.  Additionally, it is important to be aware of any local regulations regarding vape vending including additional licensing requirements and age verification requirements.  

Introduction to Smart Vape Vending

The vending industry is experiencing a significant transformation with the adoption of smart technology. Unlike traditional machines, smart vending machines are connected to the internet and integrate with cloud-based software. This connectivity allows for remote management, supports cashless transactions, and enhances data collection and sales analytics. For entrepreneurs entering the relatively new market of vape vending, there is a unique opportunity to start their ventures with these advanced, smart vape vending machines.

Smart Vape Vending: VTM Models Overview

In the realm of vape vending, the market offers an array of stylish machines. Yet, the core value of "smart" vending primarily resides in the complex software and technology provided by suppliers plus technical support.  It's essential to focus on these elements first and then consider how different models can meet specific operational needs in terms of SKU availability and capacity.  VapeTM develops and rigorously tests its own software, supported by a robust in-house team of software engineers and support staff. As a US-owned and operated company, VapeTM provides a varied selection of smart vending machines designed to accommodate diverse spaces and functional requirements. With a strategy of vertical integration that includes hardware, software, and payment processing, VapeTM is uniquely positioned to support vape vending startups by simplifying vendor management and reducing friction and challenges associated with vendor management.

Wall-Mount Machines

• Dimensions: ~3 feet tall, 2 feet wide, and ~1 foot deep.
• Capacity: 2 x 5 aisles (10 aisles total).
• SKU Availability: Holds 10 products or SKUs 
• Best Use: Compact spaces with moderate inventory needs.  

• Dimensions: Same height and width as the Slim Wall (~3 feet tall, 2 feet wide), but slightly deeper to accommodate more inventory.
• Capacity: 3 x 5 aisles (15 aisles total).
• SKU Availability: Holds 15 products or SKUs.  So, 50% more capacity and SKU options than the Slim Wall.
• Best Use: Higher volume bars that prefer the wall-mount.  

Floor-Model Machines

Slim Tower:

• Dimensions: Taller, sleeker design with LED lights for aesthetic appeal.
• Capacity: 18 aisles with extended coil sizes, capable of holding up to 162 vapes by default (capacity adjustable based on coil size).
• Special Features: LED lighting with 20+ customizable colors and patterns controlled via a mobile app.
• Best Use: High-traffic locations that benefit from visual appeal, such as bars, clubs, or retail outlets aiming to attract attention.

• Dimensions: Larger footprint than the Slim Tower, designed for maximum capacity.
• Capacity: 36 aisles for large-scale inventory needs.
• Best Use: Ideal for large venues like casinos or malls with heavy customer traffic.

For a complete overview of available machines and their specifications, explore the VapeTM Equipment Collection.

Technical Features

VapeTM machines all have a 32" touchscreen LCD, the HV320FHB-F40 TFT LCD Open Cell: 

Experience high-quality visuals with the HV320FHB-F40, a cutting-edge TFT LCD open cell. This module features a 31.51-inch full HD display and advanced amorphous silicon TFTs for sharp, responsive visuals. Each pixel combines red, green, and blue dots in a vertical stripe, displaying over 16.7 million colors with low reflection for enhanced color accuracy and viewing angles.

Perfect for high-quality images, videos, banners, and advertisements for kiosks and vending displays, the VapeTM LCD display delivers reliable performance for any multimedia need. Dive into a world where technology meets unmatched quality.

This interactive display can work on or offline and features high-resolution product images.  The machines run on an Android-based application (APK), and we automatically update the APK on an as needed basis during the hours of 3:00 AM - 6:00 AM.  Updates are typically performed one time per quarter.  

VapeTM Software and Mobile App

We have a web-based portal and mobile app (iOs and Android) to manage the machines.  The mobile apps can be found in the Google Play and Apple Store and our clouded software can be accessed through https://vapetm.vapevendingsoftware.com/ 

The software is owned by VapeTM and performs various functions from real time transaction monitoring to inventory management and sales and data analytics.  More can be learned on our dedicated software page, but below are a few key highlights.  

• Inventory Management: Real-time tracking, low-stock alerts, and optimized product offerings.
• User-Friendly Dashboard: Accessible via web, iOS, or Android for comprehensive control.
• Advertising Opportunities: Display up to 8 rotating ads, updated in real-time.
• Reporting and Analytics: Export detailed sales reports and analyze product performance.
• Remote Login Ability
  

Maximizing Profitability and ROI: A Strategic Approach

1. Product Selection
2. Pricing Optimization
3. Revenue Model
4. Custom Wraps

1. Product Selection

Vape Vending Pricing Strategy: Prioritize Brand Loyalty

Vapors are very brand-loyal and are often-times willing to pay more money for their vape of choice over a discounted product.  VapeTM has conducted extensive field testing--offering discounted vapes in machines across the United States and the data suggests the following: Vape machines produce higher revenue and profits when the machines are stocked with premium, high-priced vapes that coincide with market trends.  VapeTM has relationships with many reputable wholesalers that sell the hot-selling vapes, and it is important to take advantage of these relationships and stock these products.  As a side note, just because a brand is hot in one area doesn't ensure its popularity in another area. For example, Breeze is an extremely popular brand in Ohio and Michigan, but go to Arizona, and most vapors have never even heard of it!

Engage with local smoke shops and consult their staff. These industry experts can provide insights into the hottest products in your area, ensuring your inventory aligns with customer preferences.  Identify top-performing vape brands that resonate with your target audience.  Brands like Geek Bar and Raz are popular nationwide (Geek Bar Pulse 15K, Geek Bar Pulse X 25K, Raz TN9000, and Raz DC25000).  Other brands like Mr. Fog, Lost Mary, and Breeze are still popular in specific regions.  Go to the local smoke shops to find out what is hot! 

2. Pricing Optimization

Strategy: average-to-higher priced vapes recommended!

Extensive market research has revealed that customers of vape vending machines are significantly less price-sensitive than originally anticipated (VapeTM Market Research Terminals). Contrary to the assumption that pricing vapes consistently or lower than smoke shops would drive increased sales, we have found that pricing vapes $1–$2 higher than typical smoke shop prices does not negatively impact sales. Instead, this approach leads to higher revenue and profits. Customers prioritize the convenience of vending machines, which often outweighs minor price differences.

Based on these insights, we recommend pricing vapes at average to slightly above-average levels. This strategy capitalizes on the added value of convenience without undercutting potential profit margins. However, it is important to avoid price gouging, as excessive markups could harm customer trust and satisfaction. A balanced pricing model that emphasizes convenience and accessibility ensures a positive customer experience while maximizing profitability.

3. Revenue Model

Strategy: Adopt a Revenue or Profit-Sharing Model

Implementing a revenue-sharing model incentivizes venue owners to actively promote the vape machine, report service issues promptly, and ensure smooth operations. Additionally, a revenue-sharing approach safeguards your margins against fluctuations in wholesale or retail pricing, ensuring sustainable profitability.  To learn more about Vape Vending profitability, spend some time on our expected vape machine profits page and interactive vape profit calculator.

4. Custom Wraps

Strategy: Wrap your vape machine with GetBranded custom wraps!

Custom wraps for Vape Vending Machines (VTMs) are a game-changer for boosting sales and enhancing brand visibility. By wrapping your machine with eye-catching graphics, you create a 24/7 marketing tool that draws attention in high-traffic areas. Custom wraps showcase your logo, promotions, and brand identity, turning your VTM into a powerful advertising asset. Affordable and durable, wraps are a cost-effective way to increase foot traffic, engage customers, and elevate your brand’s presence. Proven success stories, like a Clemson-themed VTM boosting sales by over $1,500/month, demonstrate the tangible impact of wrapped machines on business growth. 

Step-by-Step Guide to Launching a Vape Vending Machine Business

1. Set Up Your Business

• Register an LLC:

  1. Research your state’s LLC filing requirements.
  2. Choose a name for your LLC and ensure it’s not already taken.
  3. File Articles of Organization with your state’s Secretary of State.
  4. Obtain an Employer Identification Number (EIN) from the IRS for tax purposes.

• Open a Business Bank Account:

  1. Use your LLC documentation and EIN to set up a business checking account.
  2. This account will be used to link your card reader for ACH deposits on machine revenues.

2. Purchase a Vape Machine

• Purchase your Vape Machine Online: Shop Vape Machines for Sale at VapeTM to complete your purchase 
• No add-ons are necessary, but we recommend the VTM Wireless Kit 
• Choose the machine model that fits your business goals (e.g., Slim Wall, Mega Wall, Slim Tower, Mega Tower).
• Place your order online and tracking and onboarding instructions and credentials will be emailed to you.  Machine will ship in about 3 business days from Cleveland, OH USA and you should receive it in about 1-2 weeks if you are in the USA.  All other countries take a few weeks.

3. Learn the Software