It's time for the e-cigarette industry to grow up.

[JohnKing]

That's precisely how I'd rate the current state of the industry. That's why I'm posting this topic. These one or two people businesses have proven they have a sellable product and a market to purchase them. In my opinion, it's time to write a solid business plan, apply for a loan and/or find investors, and grow up as a business. The industry is poised for this move and those who make it will be around in five years time. Those who don't, won't.

bankers, investors typically shy away from products that are on the government radar, the FDA is seizing shipments from China, how could you justify building out a plant or a well-funded R&D endeavor?

Look at the ground we stand on, is it firm enough for a foundation?

 

[ScottinSoCal]

A bank wouldn't issue a loan to a PV manufacturer, especially in the current economic climate, when solid, proven businesses are going begging. Ditto for obtaining seed capital from investors. You're talking about a gray market device that may or may not be banned by the FDA in the very immediate future and is currently being randomly seized on import by the same FDA. Where's the ROI on that? It would be a huge risk and I just don't see anyone doing it unless they just won the lottery and don't have the first clue about investments. Any advisor who told them to do it could be sued - and would lose the case.

If and when we have a final decision from the FDA on how these will be treated, once we have an established track record of regulatory control, that's when bank loans and VC capital will be available. Right now it's cottage because that's the only way it can work.

 

[BiffRocko]

bankers, investors typically shy away from products that are on the government radar, the FDA is seizing shipments from China, how could you justify building out a plant or a well-funded R&D endeavor?

Look at the ground we stand on, is it firm enough for a foundation?

So anything that might be difficult shouldn't be tried? That's not how to run a successful business. FedEx's founder was told in business school that his idea of overnight delivery was terrible and would never work.

If and when we have a final decision from the FDA on how these will be treated, once we have an established track record of regulatory control, that's when bank loans and VC capital will be available. Right now it's cottage because that's the only way it can work.

I disagree. There are investors out there willing to take big risks for big profits. EVERY business is a risk. If you're not willing to take them, you're better off getting a 9-5 and letting hardier souls pay your salary.

 

[ScottinSoCal]

And, FYI, my ProVari looks, feels and operates like a professional piece of manufactured equipment. The only quibble I've got with it is the internal circuitry is exposed to the battery compartment - something that most people will probably never notice, and that they probably did for ease of repair. Overall I give it a solid 9.99 out of 10.

My mass produced cartomizers, on the other hand, are a nightmare of poor quality and slipshod manufacturing. Why do I have to tweak them just to get them to operate properly? Why is a bent paperclip an essential tool for vaping? It ain't cause of my PV.

 

[afrazier5]

I think what the industry needs more than anything whether it be in the US, China, or Timbucktu is to come together and really look hard at the problems in the young industry and come up with solutions to fix it. IMHO one of the areas that I believe need to be focused on is the identity of the products and the preferred identity of the industry as a whole.

Those that have been using this product and some of the suppliers refer to the products as vaporizers for the hardware and eliquid/eJuice. What I think may be behind much of the social stigma right now is that many of the products are referred to as electronic cigarettes or even smoke juice. This industry needs to move itself as quickly away from the words cigarette and smoke and use the more generic terms of Personal Vaporizer. I feel that as a result of the attachment to the word cigarette is the reason for my home state to include eCigarettes in the states clean air act which classifies it no different than tobacco.

The hardware suppliers also need to cease the practice of including anything prefilled with the carts/cartos/tanks/etc when shipping the core hardware. I'm just guessing here and probably blowing vapor from my hind end but if the hardware never comes with the nicotine and just the hardware itself, then it would make it more difficult for customs or FDA to get involved since there is nothing illegal or even questionable being shipped.

Sorry for the rant and for taking this a bit off topic...

Have a great Sunday and enjoy the playoffs all! Go Steelers!

Frazier

 

[BiffRocko]

And, FYI, my ProVari looks, feels and operates like a professional piece of manufactured equipment. The only quibble I've got with it is the internal circuitry is exposed to the battery compartment - something that most people will probably never notice, and that they probably did for ease of repair. Overall I give it a solid 9.99 out of 10.

Actually, they are the one company that I see making the move to the status I'm talking about. I don't like the look of the ProVari or want VV so I didn't buy one of them. If the Prodigy used 18650 batteries or had an extender cap I probably would have bought one.

 

[ScottinSoCal]

I disagree. There are investors out there willing to take big risks for big profits. EVERY business is a risk. If you're not willing to take them, you're better off getting a 9-5 and letting hardier souls pay your salary.

What big profits?

The ProVari is up there, as far as PV costs go, at $200 list. How many do you think they'll sell? I think 1,000 units would be optimistic, but let's say they sell 5 times that - 5,000 units. At that volume, unless the business was piggy-backed on a lot more popular products it isn't economically feasible to have all the manufacturing in-house, so it has to be out-sourced. And 5K units is still considered small volume for machining shops, so they aren't getting volume discounts. Ditto for all the components that go into it. Then you have the labor cost for the PCB assembly and final assembly, plus testing. They can't be clearing more than $75 on this thing, and that's at list - I paid $159 for mine, not list. But, for the sake of argument, let's go with the full $75 profit on each. For 5K units that's $375,000. Then you divide that in half - because the manufacturers would like a little bit of return on their idea, after all, and that leaves less than $200K return, over probably a couple of years investment time frame. That's peanuts, not huge profits. And that's with numbers that I really believe are seriously inflated.

VC firms want to see profits in terms of millions of dollars, not tens of thousands.

 

[JohnKing]

It will be big business when RJ Reynolds, Shering Plough, etc. decide it to be legal and then you'll stroll into Wally World and buy these things like you do disposable razors. They'll have a vape rack.

 

[Stownz]

Things will change as the popularity increases. Right now it is very difficult to compare, or get advice from others. The few people with 15 different PVs sitting around the house offering unbiased reviews is extremely rare. We are all reading threads and reviews from people with limited exposure to the mass amount of products available. So we read as much as we can, and make the most informed decisions we can with our "buying power", and fail. Most of the suppliers here are doing the best they can with quite a limited budget, and I honestly have been impressed they have done so much with so little.

At least they are not breaking it off in veterans from the hospital like the mall kiosk here. Selling a9-2 model PVs for $89.99 and Johnson Creek Juice for $15 per 3ml <----- now those .......s should die by fire. a9-2 from ALD is $8 and when you order 500 or more, they will put whatever brand OEM you want on the box.

Yah, we get ...... off at these small time suppliers for screwin up our orders, or selling us defective stuff. At least they are not straight out robbing people like mall kiosks and these other companies stuffing millions into the industry to sell proprietary POS PVs that are compatible with nothing else exept their POS product line. I would rather be screwed by an ECF smalltime forum supplier that is trying his best, then some multimillion dollar (Big Time) corporation that is "doing it right".

Right now we can vape increadibly cheap, and sometimes stuff goes wrong or DOA. Oh well, it was a $5 cartomizer, or some nasty juice labeled wrong. The losses are minimal for dealing with people I know by their first names and call them on the phone to personally tell them how much they fail.

 

[Java_Az]

There is a % of ghetto mods out there. Bad finish, bad circuit design leaving out parts that are marked required in data sheets. But there are also some that are made to very high standards. Your going to have to pay more for the nicer ones. You have to alot of homework on them to get a idea of what your getting into. Also leaving a bad review for the ones with bad finish and breaking down might just force the maker to up his or her standards.

Once you get a fairly big company making these they wont be USA made anymore they will outsource the manufacturing to China or somewhere else with cheap labor. It is pretty hard to beat a guy in china making 25cents a hour. So as far as mods go, true ones will more then likely always be made by father and son or mom and pop modders. The silver bullet is a example of it , got so big they outsource the manufacture of it to China.

 

[BiffRocko]

What big profits?

The ProVari is up there, as far as PV costs go, at $200 list. How many do you think they'll sell? I think 1,000 units would be optimistic, but let's say they sell 5 times that - 5,000 units. At that volume, unless the business was piggy-backed on a lot more popular products it isn't economically feasible to have all the manufacturing in-house, so it has to be out-sourced. And 5K units is still considered small volume for machining shops, so they aren't getting volume discounts. Ditto for all the components that go into it. Then you have the labor cost for the PCB assembly and final assembly, plus testing. They can't be clearing more than $75 on this thing, and that's at list - I paid $159 for mine, not list. But, for the sake of argument, let's go with the full $75 profit on each. For 5K units that's $375,000. Then you divide that in half - because the manufacturers would like a little bit of return on their idea, after all, and that leaves less than $200K return, over probably a couple of years investment time frame. That's peanuts, not huge profits. And that's with numbers that I really believe are seriously inflated.

VC firms want to see profits in terms of millions of dollars, not tens of thousands.

I said investors. You assumed VC firms. Of course I wouldn't take this type of business to a VC firm that's looking for millions in profits in the next few years. There are plenty of people with money looking to invest in something speculative that has the potential to yield large profits down the road. Finding them is a matter of smart networking.

Volume is created by building a larger market. You think American Blu would invest in radio and TV advertising if it didn't see the potential for huge profits from doing so? They're building the market with an inferior product. Why do you think so many people come here looking for a better PV after buying a Blu? Someone with a better product has the same opportunity to build the market with even better customer retention.

 

[Betterbait]

If you havent already, check out the "GLV2" from Great Lakes Vaping. You will be satisfied with the craftsmanship and professional service. They are actually doing a givaway here on the forum so check it out.

 

[ec!gg]

I said investors. You assumed VC firms. Of course I wouldn't take this type of business to a VC firm that's looking for millions in profits in the next few years. There are plenty of people with money looking to invest in something speculative that has the potential to yield large profits down the road. Finding them is a matter of smart networking.

Volume is created by building a larger market. You think American Blu would invest in radio and TV advertising if it didn't see the potential for huge profits from doing so? They're building the market with an inferior product. Why do you think so many people come here looking for a better PV after buying a Blu? Someone with a better product has the same opportunity to build the market with even better customer retention.

Where are these investors that you speak of? Because as a supplier I can tell you right now no VC or investor will put their money into a full R&D plan on a product that may be banned by the FDA. Trust me it's terrible how it is out there. We are looking at a full blown tyranny run government.

 

[Stownz]

There are smaller companies that are doing R&D. Provari is the god of all PVs, and that technology they are pioneering will spread to every PV made here pretty quick. They sell a few lower tech units and slowly but steadily are churning out some increadible stuff. They are functioning and performing without being backed by any huge companies. I even emailed them and told them I would pay them $300 for just the base unit if they would jump me up the list, and they REFUSED on moral grounds.

Blue and all the other scammer companies are ripping people off, but they are building volume. The companies churning out crap will fail, and the ones churning out good products will succeed. As the whole industry grows, buyer awareness will increase as well. Email the vendors before you buy, google what they are selling and see if they are just sticking their sticker on the same chineese products everyone else is selling.

If feels like a small downtime shopping experience when you take it too that level. Yes, Walmart will be selling PVs someday, and we will miss these little guys with all their screwups. I remember the old smoke shops, and a few still exist. Now we will have vape lounges.

 

[player30]

My 2 cents, somewhat off-topic is the e-cigs are in their infancy and are not going anywhere despite efforts by local, state, federal government and organizations (ACS, ALA,etc.) who are in business only to make money and contribute very little tho the cause underneath them. A few of the e-cig sellers we have right now will make it; most will not. Quite a few who were start ups on this site have already quit doing business. And alot of them are one trick ponies who depend on the first time e-cig user, and they will be the first to fall. Alot of the juice makers will be bought out for their recipe, and a larger company who can do it cheaper will own them (kinda of like micro beer).

Being innovative, e-cig users have become e-cig makers. Again, if they have a good idea, they will eventually be bought out. Are they perfect? No. Are they improving the e-cig? For some, yes. At this point, the two things that hold together this whole e-cig idea are the battery and the liquid. I have bought battery stock to bet on the growth of this industry. And I do believe one day that liquids will be regulated, but not any stronger than herbs.

 

[jmanning]

It seems to me, the bigger companies with the money, Blu, for example, are the ones selling the cheap crap for exorbitant prices. I am not so sure just poring money into it is the answer. It will take market pressure, the ability to make money at it, for things to change.

As far as mods go, I have owned 4 different mods and have had no such issues with them.

 

[JudgeVape]

You're talking about a gray market device that may or may not be banned by the FDA in the very immediate future and is currently being randomly seized on import by the same FDA.

And its not just the FDA. Even if they are finally forced to back off for good (which seems likely), state and local governments are going after these devices as well. Its not that big of a deal if governments impose indoor public use restrictions on PVs comparable to those imposed on analogs (you can sort of understand the rationale there, even if it is misguided), but when governments impose all public use restrictions or worse, such as the proposed New York state law banning their sale altogether, this can scary as hell for investors.

 

[JupiterV]

IMO PV mainstream production growth will not happen until the tobacco companies get on the bandwagon. Unfortunately, they obviously have pull with the FDA and politicians. If they can manufacture a decent product for the multitudes, we'll be in. Probably cost more but we'll still have them.