What are the business challenges that UK vape shops face in 2021


The past year hasn’t been particularly kind to small businesses around the world, to put it mildly.

Between lengthy and repeated lockdowns and a general consumer shift away from brick-and-mortar stores and toward online purchasing, small businesses everywhere have found it increasingly difficult just to stay open.

Things have been equally difficult for vape shops in the UK. Vape shops haven’t received the “essential retailer” status necessary to remain fully open during lockdowns. At the beginning of 2021, trade publication The Grocer predicted that around 1,000 of the UK’s 4,000 vape shops will go out of business before the year is over.

If you’ve identified an underserved community in which you believe a specialist vape shop would perform well, it’s entirely possible that you could enter the vaping industry and earn a good living. Before you do, though, it would be wise to consider the business challenges facing UK vape shops in 2021.

Future Lockdowns Could Occur Without Warning

By far, the COVID-19 pandemic creates the biggest risk for UK vape shops in 2021. Although vaccines are being widely distributed and lockdowns are easing, the future remains uncertain. We have no way to know for sure whether the existing vaccines will protect from future mutations of the virus. Therefore, we also have no way to know for sure that there won’t be further lockdowns in the future. To keep your revenue as stable as it can possibly be, you should build a website with an online sales component. Selling online has helped vape shops like Vapekit remain in business throughout the pandemic.

The Future Is Uncertain for UK Vaping Regulations

Between Brexit and COVID-19, regulation of the vaping industry simply isn’t a priority for the British Parliament at this time. That’s both good and bad. On one hand, the UK continues to abide by the rules set forth in the EU Tobacco Products Directive for the time being. That’s a good thing for vape shop owners because no one likes abrupt changes – especially when it comes to vaping, since new vaping regulations are almost always hostile toward consumers. It’s also good for UK-based e-liquid makers because it means that they don’t need to create separate product ranges for the UK and the EU.

In the future, though, it’s entirely possible that vaping regulations in the UK won’t be as friendly to consumers as they currently are. Will the UK continue to abide by the TPD, or will Parliament draft its own regulations? If the UK gets its own set of vaping regulations, it could immediately render existing products obsolete or make them impossible to sell.

Continuing to abide by the TPD, on the other hand, could be just as bad for consumers and for UK vape shops as the TPD continues to evolve. The attitude toward vaping is not as kind in Europe as it is in the UK, and some EU lawmakers are in favour of sweeping bans on flavoured e-liquids and on open vaping systems. Some have speculated that future revisions to the TPD could include those bans. If the UK decides to continue abiding by the TPD, it could mean adopting future consumer-hostile revisions to the TPD without having had any say in the drafting of those revisions thanks to Brexit.

Taxation Could Make Vapour Products Less Appealing

One certain thing about the COVID-19 pandemic is that it has cost governments around the world an enormous amount of money. From economic stimulus to funding the distribution of vaccines, the pandemic has caused huge expenses. According to the BBC, the UK borrowed £355 billion for the 2020-21 fiscal year. It’s the most that our country has ever needed to borrow outside wartime, and the government will eventually need to pay that money back somehow. That’ll either happen through reduced spending – something no government has ever been good at – or increased taxation.

When governments have looked for new sources of revenue, smokers have always been a popular target. Most people don’t smoke and therefore don’t care about tobacco taxes. Smokers, meanwhile, place an enormous burden on healthcare systems anyway. Tobacco taxes can help to pay for those expenses. So far, the UK hasn’t applied a sin tax to vaping products – but when it comes to paying coronavirus expenses, anything could be fair game.

Vaping taxes could present a major challenge to UK vape shops because anything that makes vapour products more expensive also makes them less appealing to smokers and can therefore discourage smokers from switching to vaping. That could translate to reduced sales. On the bright side, though, it’s also possible that cooler heads will prevail here. After all, tobacco taxes have never come close to covering smokers’ healthcare costs. The only way to remove that burden from the healthcare system is to encourage smokers to quit. Meanwhile, the UK government has set forth the ambitious mandate of making the country smoke free by 2030. Accomplishing that goal would be virtually impossible unless vaping remained available as an appealing and affordable alternative, so taxing vapour products would be counterproductive.

Vape Shops Have Difficulty Finding Payment Processors and Insurance Carriers

So far, the business difficulties for UK vape shops that we’ve discussed in this article have been speculative in nature. We don’t know how the COVID-19 pandemic or government regulations could affect the UK vaping industry in the future. As a current or future vape shop owner, you need to know how those unknown factors could affect your business.

There is one challenge, however, that isn’t speculative at all. As a vape shop owner, you will have difficulty securing basic services for your business and will pay more for those services than most other business owners. Payment processors, for example, can be hard to find for vape shops because many merchant account providers have deemed vaping products “high risk” and don’t want to process payments for them. You may pay more for credit card transactions than a typical business would. Liability insurance, likewise, can be more expensive for vape shops than for other types of companies. You’ll need to prepare for those and other higher-than-normal expenses and factor those costs into your pricing structure to ensure that you’ll still be able to earn a profit.