20 Vape Company Leaders Discuss Whether Vaping Is Highly Profitable

There are many opinions outside the circle about the huge profits of e-cigarettes. Recently, the e-cigarette public account interviewed practitioners in the e-cigarette industry and made this exclusive special report to view whether e-cigarettes are making huge profits from the perspective of practitioners in the industry. In addition, we collected the speeches of some e-cigarette company leaders in interviews with other media.

As the saying goes, only if you understand, you have the right to speak! The heads of these 20 e-cigarette companies include e-cigarette manufacturers, cigarette oil manufacturers, brands, agents, channels and physical stores.

Among them, there are veterans of e-cigarettes and new Internet technology entrepreneurs; they expressed their views on whether e-cigarettes are making huge profits from different angles and aspects. From this, you can fully understand many real industry situations.

Electronic cigarette manufacturers

1. Ou Junbiao, Chairman of Sigraai:

Generally speaking, an industry is divided into germination period, growth period, maturity period, and decline period. In the bud and growth periods, profits are relatively high; in the mature period, profits are relatively reasonable; and in the recession period, profits are relatively low.

E-cigarettes are still in their growth stage. As long as they have R & D strength and technological advantages, and new products on the market meet consumer needs, it is normal for high profits in the early stage, but it is not a real huge profit. I think considerable profits are a reward for companies who work hard and value R & D and technology! Only in this way can everyone be willing to invest, an industry have hope and have the foundation for sustainable development! I call on more companies in the e-cigarette industry to pay attention to R & D and technology!

2. Xinyikang CEO Li Jianwei:

Compared with the profits of the electronics industry, e-cigarettes are huge profits. The key is that you have to be able to ship.

3. Wang Huiyang, Manager of Zhuolineng's Marketing Department:

From a macro perspective, only monopolistic or high-threshold vertical segments or luxury goods will have huge profits in the strict sense. E-cigarettes obviously do not fall into these categories. Back to the perception of industry users, in the past few years, with industry players as the main consumer group, e-cigarette products have been endowed with geek DIY collection and high-end segment social attributes, and they do have a certain premium.

With the popularity of disposable atomizing cigarettes for small cigarettes, new retail, micro-commerce, sharing economy, and channel sinking have emerged. E-cigarettes are increasingly tending to become fast-moving consumer goods, and the premium can only rely on the brand. Even JUUL, which has recently launched in China and is popular around the world, its brand premium is far from being a huge profit.

At the same time, taking Zhuolineng as an example, as one of the leading R & D and manufacturing enterprises in the research and application of electronic atomization technology, the annual R & D expenses are not less than 10%, and investment in various quality systems continues to improve, including not limited to Enterprise standards, national standards, FDA, TPD and other compliance testing, as well as production automation, information upgrades and other level improvement investment.

These efforts to improve product quality and improve user experience will inevitably cost high costs, resulting in very limited actual profit margins for manufacturers. Of course, we believe that this is the only way to ensure the healthy and healthy development of the industry. We ourselves have no illusions about huge profits.

4. Zhang Wei, Chief Strategy Officer of Youwe Group:

The development of any industry is inseparable from goodwill and doubts, including e-cigarettes. E-cigarettes are a highly sensitive industry that has received great attention since its inception. The outside world and even the mainstream media still have misinterpretations and misunderstandings about e-cigarettes, and even talk about e-cigarettes becoming discolored.

I think e-cigarettes are a healthy and long-term undertaking that plays an important role in social environmental protection and improves the healthy life of smokers. We should actively view and make good use of the power given by technology, and return everything to products and users. As for the pursuit of benefits, no industry will last long.

As a force in the industry's advancement, YOUMEGROUP has always focused on providing users with cost-effective health cigarette replacement solutions, focusing on product development, user experience and service improvement. We continue to strictly control quality based on the production accumulation of Apple's foundries. We have a scientific research team of more than 70 people from Huawei and ZTE. I also believe that truly user-centered companies must put a lot of effort into product development and user experience. It is not just time but also money and energy. I hope that you and my colleagues in the industry can work together to improve the health of smokers, so that the outside world can have less doubts and more awareness, and this industry can become healthier and sustainable.

Electronic cigarette and oil manufacturers

5. Yao Jide, Chairman of Hengxin Tobacco Oil:

From manufacturers to consumers, as long as any product is made formally and quality is guaranteed, the cost is relatively high, and there is no huge profit; only fake and shoddy products sold at the same price as genuine products can there be huge profit.# p#pagination title #e#

6. Yang Peng, CEO of Aipu Biotech:

The factory cost is about 30-40 yuan, and the price to brand owners is about 60 yuan. The wholesale price for brand owners is about 100 yuan, and the retail price is about 300 yuan. The cost is about 30 yuan and the selling price is 300 yuan. I personally feel that it is huge profits and will definitely return to a reasonable price cycle.

Electronic cigarette brand

7. Zhao Hailun, Chairman of Firearms and Electronic Cigarettes:

The so-called huge profits are relative, not absolute. The current overall gross profit margin of the e-cigarette industry generally remains at around 60%, but the perception is relatively high.

The e-cigarette industry has shifted from being extremely dependent on e-commerce at the beginning to become the king of channels this year, greatly increasing channel costs. However, as an emerging consumer product, the costs of channel and communication will account for most of the company's revenue, which in itself is benign and normal.

In addition, some colleagues have learned the bad habit of burning money by Internet companies, which will give outsiders the illusion that e-cigarette companies are very rich. From the perspective of firearms, the so-called huge profits from e-cigarettes are the legitimate rights of retailers.

8. Liu Nan, General Manager of NOS Electronic Cigarette:

The so-called e-cigarettes are all huge profits. They are indeed huge profits. The huge profits are not the profits at the price difference, but the higher repurchase rate. There is no need for education to smoke e-cigarettes, as long as you can smoke.

Therefore, the cost of high-quality products will definitely not be low, let alone talking about huge profits. The real huge profits are not standard companies with integrated R & D and production. The huge profits are made by non-standard legalized workshops and imitation goods, and there is no need for too much operating cost. Standard enterprise manpower, R & D, and hardware investment all account for a high proportion of costs.

To make a metaphor: a standard enterprise has a certain amount of labor input in terms of taxation, manpower, R & D, and production. There is definitely a certain gap between the investment costs of a company with 50 people and the current non-standardized workshop and bad businesses with 3-5 people. It is also hoped that the majority of users and consumers will be vigilant and recognize guaranteed brand products from large companies. Establish a positive development environment for the market. Give consumers a highly recognizable, warm, safe and reliable brand service standard.

9. Cheng Dayu, CEO of small color strip e-cigarette:

There is no such thing as huge profits from e-cigarettes. For example, the success of our small-colored e-cigarettes, how much effort and capital investment we put in in the early stage cannot be seen by outsiders. If the small color bar does not succeed, all these efforts will be in vain.

It can be seen that if this industry wants to make money successfully, the stakes are still a bit high. Competition in the market is also very fierce, and the cost of obtaining customers is quite high. It seems that compared manufacturing costs and retail unit prices, there seems to be a large profit margin, but there is a lot of investment in each sales link. Brands need to promote marketing, internal company expenses, etc., and also face some risks of bad debts. In fact, there is not much left to get. The profit distribution of our products is generally 2:3:5. Our profit is 20%, dealers are 30%, retailers are 50%.

10. Zhu Xiaomu, founder of FLOW Fulu e-Cigarette:

Before making e-cigarettes, I also held the same view. I believed that the e-cigarette industry had low costs and high profits, and was a typical profiteering industry. But after making the product, I changed my opinion.

E-cigarettes are still in their early stages in the world and in China. Although the market is large, they still need an education market. This requires users to see, touch and smoke it in order to understand more information about e-cigarettes. Therefore, the current sales channels of e-cigarettes are still mainly offline, and a large part of the profits need to be allocated to distributors in the form of e-cigarette shops, 3C shops, and comprehensive supermarkets. Because the industry is too new and too small, online channels have not yet developed. Overall, e-cigarettes are not a high-profit industry. (Source "Dialogue FLOW Zhu Xiaomu: E-cigarettes are not a profiteering industry, but will be a major trend in the future")

11. Zhang Dede, founder of VEIIK Microengraving:

E-cigarettes look like huge profits. The difference between the production price and the retail price is four or five times, but the brand's profits are not high. The main reason is that the e-cigarette sales chain is not yet mature, with many sales levels. As the layers are divided into layers, the retail price will increase. E-cigarettes rely on channels, and most of the profits are in channels, but channels do not make much money.

Take e-cigarette physical stores for example, they may seem to have high profits, but they are faced with one user at a time. The small quantity mainly depends on the price. Excluding rent, utilities, and labor, there is not much money to make. If profits are low, business cannot be maintained at all. Some well-known domestic brands have high profits, but to promote them, a lot of money is spent on promotion and channel development.# p#pagination title #e#

12. Liu Haonan, CEO of KMOSE Keri:

As a manager of an e-cigarette company, I personally think that this issue should be viewed from two dimensions:

1. Compared with many other industries, the product cost of the e-cigarette industry is not low. To create a good e-cigarette product, we must consider various factors such as research and development, design, production, and marketing. From the conception of the product concept to its presentation to consumers, to its embedding in the minds of consumers, a lot of energy and material resources are needed during this period.

2. However, there are indeed some unscrupulous merchants in the market that provide low-quality products, even fake and shoddy products. These merchants only consider making a wave of quick money and do not build brands and establish markets. It is this irresponsible practice that gives consumers such awareness. But with the development of the industry, such practices will surely be eliminated.

13. Qiu Yiwu, co-founder of Whale Light Smoke:

“It does have unstable factors, or negative news and policy pressure, but there is no doubt that for now, it is a good opportunity to start a business." rdquo; However, this does not mean that e-cigarettes can make money now. ldquo; E-cigarettes have two ends that are controlled. One end is the cost of supply. Some large manufacturers have a strong supply chain and now even start prices on the ground; the same is true on the channel side. If you have so much capital, you should subsidize our channel." rdquo; In this situation, most brand companies may lose money.

14. Zhong Yufei, founder of TAKI Xike:

Many people think that e-cigarettes are huge profits, but it is actually a misunderstanding. If you really want to make products solidly and open up upstream and downstream, the profit margin of this industry will be about 30%. But many companies in the market just stick their cards, so that profits will increase.& rdquo;

15. Sun Haiming, founder and CEO of Bolan e-Cigarette:

I use 235 to describe the profit sharing model of the e-cigarette industry chain.& ldquo; Brand profit is 20%, trader profit is 30%, and terminal profit is 50%. This is roughly the case in the domestic market.& rdquo; This means that 80% of the profits of e-cigarettes entering circulation are distributed to channels.

E-cigarette agent

16. Huang Huafu, CEO of Huadian Times Technology:

Nowadays, unless technology and market are monopolized, it is difficult for an industry to make huge profits. I believe many e-cigarette practitioners will complain that the market is too transparent and there is no profit; but some consumers also complain that the e-cigarette industry is a huge profit, which is simply caused by information asymmetry.

Since e-cigarettes are an emerging industry, for many consumers, once they really want to understand the industry, they will feel that the profits are very high after skipping the intermediate links and mistakenly believe that it is huge profits. But I forgot that e-cigarettes need to go through several middlemen when they are delivered to consumers. When each industry develops to a mature stage, there will be fewer and fewer middlemen and prices will be lower and lower.

E-cigarette terminal party

17. Da J, owner of Guangzhou Baode Electronic Cigarette Chain Store:

In a word, fuck the huge profits! Compared to any clothing, shoes and hats, it is just a piece of profit. 50% of the gross profit in retail sales, about 20% of all hard costs are eliminated, leaving more than 20% of net profit. Can this be called huge profits? There is no need to talk about wholesale, and insiders know very well.

I think we must first make it clear that the concept of huge profits is relative, not absolute. Take the smoke of the past as an example. A so-called brand mechanical rod may sell for several thousand yuan, but how much does the cost of raw materials? 100-200 Yuan, you say huge profits, but you have to know that the market demand for this thing is very small. If the market doesn't develop for three years, it takes three years to develop the market, right?

If someone is short on money, they may get a 50% discount and they won't make any money. If someone runs a good business, he sells one every day and makes a fortune. Then what? The smoke has not receded yet. This is the result of spontaneous adjustment of market supply and demand, and prices are also spontaneously formed prices. Profits come from poor information, and the market will adjust itself. At present, there is no oligarchy in the e-cigarette market, which means that there is no market manipulation. They are all manifestations of a free market economy.

Now the public feels that e-cigarettes are profitable, which is based on the profits of the traditional retail industry to compare horizontally, but the audience of the traditional retail industry is far from the audience of the current e-cigarette market. For example, when the e-cigarette market is completely popularized and popularized, let alone compare it with tobacco, but compare it with the daily products that every family may consume every day. Let's see if e-cigarettes will make huge profits by then. I believe it is definitely similar to the overall profit ratio of the traditional retail industry.
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To summarize:

1. As long as the profit of ordinary commodities is determined by the supply and demand market.

2. At present, it seems that the profit is large because in the initial stage, the audience is small and the domestic market is very small. On average, a shopping mall only sells more than ten or twenty orders during a good day, and a few orders during a bad day. If the profits are insufficient, you can't play.

3. The issue of information differentiation is also determined by the specific current situation of free market development. In order to protect the sustainable and healthy development of profits in the middle and lower reaches, manufacturers must protect the price system so that all parties involved can survive. However, those who sell pictures across industries do not have the pressure to survive in this regard, so prices will be chaotic and profits will naturally fall. As a result, compared with the selling prices of merchants that make a living, the audience will feel that these merchants are black and then feel that the industry has deep profits.

18. Shaanxi supermarket convenience store channel Lu Chengshi:

I feel that huge profits have been the term in the oem era a few years ago. E-cigarettes have been undergoing reform and replacement over the years. Now, large capital has intervened, leaving many excellent brand factories on pins and needles. Especially this year, this matter has been good and bad. The good news is that the country has increased the high exposure of e-cigarettes; the bad news is that some capital manufacturers only know how to vigorously promote, but the products are really not flattering. Letting local dealers hoard large quantities of goods will lead to excessive consumption of local e-cigarettes resources.

As for huge profits, the e-cigarette market has become very transparent this year, with 90% of them making small cigarettes. The small cigarettes range from 199 yuan to 399 yuan, and the cigarette bombs range from 68 to 99 yuan. The market price and pattern are very clear. Compared with before, the price is much more peaceful, because everyone knows that whoever can win the hearts of the people will win the world.

Capital operations don't care about the dealers below them or market share. They just want to raise funds, go public, and then wait for the stock to increase, and then cash out of the market. In the end, only dealers and agents paid for the mess.

I think if this continues, the national e-cigarette market will become a vicious cycle. Maybe the national standard is about to be introduced and will break the current market pattern, which is what I am looking forward to.

E-cigarettes are now really similar to the mobile phone market that has been in place for more than ten years. Manufacturers, venture capitalists, and hundreds of schools of thought all want to get a piece of the pie, but the quality of its products is really mixed. The introduction of the national standard will clean the entire industry and make the future e-cigarette market more standardized and clear. Perhaps in the near future, e-cigarettes will form a real brand ranking like the mobile phone market. When people buy them, they will also have the same thoughts as mobile phones, such as Apple, Huawei, Samsung, Xiaomi, etc.

19. Manager Dai, the physical store owner of e-cigarettes in Huaian District, Huaian City, Jiangsu Province:

As a physical e-cigarette shop owner who has been in business for 5 years, I don't think e-cigarettes are a huge profit. We came from the era of great smoke. At that time, many people bought e-cigarettes just out of curiosity. After buying machinery and equipment, there were really few people who came back to buy a second bottle of tobacco fluid. A lot of people just quit when the novelty is over.

After the small cigarette market became popular last year, business has indeed improved a lot. This is also related to the customer base we have accumulated over the past few years. Profits are okay, but there must be enough customers. No matter how big the profits are, no matter how huge the profits are, if you don't have customer recognition and support, everything is for nothing! Doing business is learned and is the same as being a person. When you are done well, someone will naturally come to praise you.

20. Manager Xu of Yanyu Life Steam Cigarette Firm:

I think that profiteering is a process that all industries must go through. When it becomes truly popular one day, no one will talk about whether profiteering is profiteering or not.