AirM, Rosa's scenarios entail substantial outlays, related risk, personal guarantees, maybe covenants not to compete, etc., in addition to the downside risks you mention. Frankly, I think the industry is only a hop, skip and a jump away from getting flavored nic juices banned. The model is already there in the Family Smoking Prevention and Tobacco Control Act, both in the actual terms of the law and its underlying congressional findings. (It is the law that deprived me of buying precious Djarum Originals in the USA due to explicit gateway concerns regarding kids.) All of the e-cig industry needs to be exceedingly careful here, including the small fries. But you are correct. The first TV interviews, protests, etc. attendant upon kids getting noticeably sick due to access to nic juice, or being busted with it, likely will occur at the largest shop in town. Be that as it may, my experience here in the Greater Phoenix Metropolitan Area is that most of these businesses haven't been succcessful enough even to man the phone diligently.
I would tend to agree on some of your points. Selling nicotine based juice in a mall is a BIG BIG BIG mistake and is only asking for non-sensible regulation. I don't have any problems with it (selling nicotine juice). IMO the job is on parents to educate their children. The easiest way to make something coveted by youth is to make it illicit and hard to obtain. I digress.
I think any small business cash outlay under $10million is small potatoes. At least that is how economics define it. Well i am slightly incorrect, the basis is on number of employees, but that can derive a hard cash value (depending on location). I know that my local distro. employs under 10 people.
I agree that regardless of size or cash outlay, all vendors are at risk. That is why the big boys are overseas ; )
The most profitable segment of this business, and the one least prone to class action suite...would be mod devices. You are charging a premium and have almost no competition (as long as your device is unique) and you are not selling any substance that contains nicotine (which I will sate again...I HAVE NO PROBLEM WITH)....on some level you would assume liability (health liability) but far less than someone selling juice.
I think the issue comes down to keeping overhead low (my distro does answer the phone every time). You can't staff a service/help desk when your profit margin is less than 13%. Also when health liabilities and insurance come into the picture, it would decimate your bottom line. Insurance isn't determined by profit margin, it's determined by risk. You could operate a non-profit business that did something dangerous (let's say roofing) and your premium would be just about the same as a for-profit doing similar business.
I think this vaping thing will remain a cottage industry (here in the USA), simply because of associated liability and the fact that our government has decided that it can make choices for us about what we put into our bodies....again I digress and won't even go down that road....
If it does remain "small" then the motivation for any lobby group or legal group to go after a sole proprietor is almost zero. You can't collect anything from a guy/gal who has nothing. It;s exactly what the music business has done to itself. Gone after children for money they don't have. Spent hundreds of millions fighting for further regulation. The only outcome has been self imposed implosion. In lay terms, they went broke fighting against un-collectable judgments.
On the other side, I hope I am dead wrong about all of this, because I love this alternative to smoking...I don't want to see it go away and I like the fact that people are making and selling good here in the USA....
