Description

Business is an electronic cigarette company which sells non-tobacco products to consumers in Texas. The business sells e-liquids, electronic cigarette batteries, atomizers and vaping accessories and operates out of a brick and mortar store in Fort Worth Texas. They have a very wide customer base, which includes past smokers, people who want to quit smoking, and young vapors' who enjoy the vaping experience. The average customer is between 18 and 65 years old. They are a specialty retailer with medium competition in Fort Worth, Texas area.
US e-cigarette sales have grown at an annual rate of 115 percent in the 2009-14 period. It is estimated that global e-cigarette market could increase to $10 billion by 2017. Some analysts predict that e-cigarette use will eclipse that of combustible cigarettes in ten years.
NOTE E2 VISA ELIGIBLE. This is an ideal business to obtain an E2 Visa: full-time employees and profitable income for a qualified owner-operator.
The asking price for the assets of the business is $70,000 with $35,000 cash at closing and $35,000 seller-financed for 2 years at 8% to a qualified purchaser. (monthly payments of approximately $1,583/mo). All financing is to be personally guaranteed. Assets include inventory at retail value of $26,000, FFE (Furniture, Fixtures and Equipment) valued at $15,000, plus company developed recipes valued at $20,000.

INDUSTRY OVERVIEW: The US electronic cigarette industry consists of about 4,500 companies with almost $2 billion in combined annual revenue. Large companies include DFW Vapors, Artesian Vapor, and Vapor Galleria. Industry is fragmented, with many small companies making up the industry.

COMPETITIVE LANDSCAPE: The electronic cigarette industry has a unique competitive landscape because the retailers are all so different. For example, some electronic cigarette companies create small stores with limited amounts of merchandise and displays, whereas other companies create elaborate stores with large product differentiation. People's desire to quit smoking, the availability of vaping stores in the area, and cost drives demand in the vaping industry. Additionally, availability of products, ability to control costs (labor, shipping, returns, etc.), and pricing drives profit. Further, the competitive landscape allows small companies to complete with large companies through exceptional customer service, similar product availability, and low prices. Thankfully, the industry is not labor-intensive.
Electronic cigarettes are battery-powered, portable devices that simulate smoking. Vapor comes from a battery-powered heating element called an "atomizer". E-cigarettes vaporize a special solution called e-liquid. E-liquid contains a base of propylene glycol and vegetable glycol, which are two substances commonly found in foods such as M&M's, cake, and biscuits. Propylene glycol is considered safe by the U.S. Food and Drug Administration, and it is used as an humectant (E1520), solvent, and preservative in food, and for tobacco products. Vegetable Glycol is a mixture of carbon, hydrogen, and oxygen. E-cig solution often includes nicotine. Nicotine levels depend upon the consumer's preference and smoking habits. E-liquid does not have to contain nicotine. It depends upon the consumer's desire, and people under 18 may not buy e-liquid with nicotine in it. Some consumers prefer flavor only, while others want nicotine in conjunction with flavoring to aid in their "stop-smoking" efforts.

Posted Jul 13, 2015

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