Healthy Markups on E-Cigarettes Turn Vacant Storefronts Into 'Vape Shops'

Across the country, small storefronts shuttered during the recession are reopening. The new occupants aren’t coffee shops or dry cleaners: They’re small retailers catering to the fast-growing electronic cigarette market. Known as “vape shops,” because e-cigarettes dispense vaporized nicotine rather than tobacco smoke, their products provide “a great business for us with excellent margins,” says Sam Bahhur, who in June expanded his 10-employee U Smoke Shop in Miami, adding a second location in Coral Gables dedicated solely to e-cigs.

While he can mark up traditional cigarettes by 10 percent to 20 percent, the numbers jump to 200 percent to 400 percent on e-cigarette dispensers, nicotine cartridges, and accessories, he says. Bahhur expects to bring in $1.3 million in revenue this year from the two stores. Vaping, he says, is “cost-effective for our customers.”