It is often amazing where a new idea will come from. It may start out small, but then lead your business in a new and exciting direction. Such was the case with Greg Campbell of Garden Oasis LLC in Palm Gardens, NV. For the past ten years, Campbell’s main business was owning and operating a Chevron gas station, a mini market and a gift shop. He was at a trade show last year, seeking merchandise for his gift shop, when he came upon a product that at first intrigued and fascinated him and then won him over: the electronic cigarette.
What is an electronic cigarette anyway? Even as 2010 opens, not many people in the U.S. seem to know about this product. Basically, the electronic cigarette is a device that delivers nicotine and water vapor to a smoker, but not the tobacco smoke and thousands of additives that wreak havoc on the smoker’s lungs and body. “The product demonstrates really well,” says Campbell. “When you exhale, you get this puff that appears to be smoke, but it is water vapor. It is completely odorless. So for anyone who tries an electronic cigarette for the first time, there is a ‘wow’ factor, because it looks like a magician’s trick. But with an electronic cigarette, you get the nicotine in and you exhale water vapor out, which evaporates into the air almost immediately. With a typical cigarette, the smoke does not evaporate; it merely hangs around.”
When Campbell initially saw the product, he felt it would have profound implications for the smoker, because the laws are becoming tougher and tougher on smokers, and forcing them to smoke outside of the building. Further, tobacco cigarettes have been targeted for excessive taxes by the federal and state governments. So the smoker is now getting chased out of buildings and restaurants and paying between $5 and $10 for a pack of cigarettes. The nicotine cartridge found in electronic cigarettes is equivalent to two packs of cigarettes, and has a suggested retail price of $2 for a cartridge. For smokers who change over to the electronic cigarette, this means rather than paying $5 a pack for cigarettes, or $10 for two packs, they can have the equivalent of two packs for only $2.
Campbell, who is not a smoker, says he has been told that these electronic cigarettes do not taste the same as their smoky brethren. But some smokers who cannot kick the habit completely, substitute some of their daily tobacco cigarettes with the electronic cigarette. “If cigarette smokers can replace 80 percent of the tobacco cigarettes they smoke with an electronic cigarette, they can save about $1,000 a year in costs. They do not have to quit totally,” he says.
The cartridges come at different strengths of nicotine. Most people start off at the highest strength to ensure that they are not deprived. They can go from high to medium to low, to no nicotine cartridges. While electronic cigarettes offer an opportunity to reduce nicotine intake, perhaps down to zero, the FDA does not consider this a smoking cessation product. As for cartridges with no nicotine, Campbell says that they are for people like him who want to demonstrate the product without becoming addicted to nicotine, and for those ex-smokers who have quite but still like the feel of a cigarette in their hand and mouth.
Campbell originally bought four electronic cigarette kits at the trade show and gave them to his smoker friends to try out. “I bought them for people I know who smoke. I wanted them to try it and then give me an honest opinion of the product, before I got into the business. They told me it was terrific, but none of them quit smoking totally. It took me awhile to determine if they would continue to use the product. They did.” From the initial order of four electronic cigarette kits, Campbell then bought 20 more kits and then more after that. Finally, he became an electronic cigarette distributor. “Retailers can start off in the business with a $100 kit that I sell. There is $210 worth of retail product in it. I also include literature that tells how to demonstrate the product and answer questions. There is a flyer that shows the difference between an electronic cigarette and a tobacco cigarette regarding carcinogens, and the money that customers will save. These products sell well at indoor flea markets, gas stations, and convenience stores,” Campbell says.
Usually retailers can double their money on anything they buy. The cartridges cost $1 wholesale, and can be sold for $2. The electronic cigarette kits wholesale for $20 and sell for around $40. As Campbell is quick to point out, this is less than a smoker often pays for one carton of cigarettes. If that smoker buys the $40 kit and the $10 five cartridge pack, the cost is only $50. After that, they are saving money because all they need to do is to buy new cartridges. “People, after they try the electronic cigarette, want to explore more. We offer different flavors. We have a coffee flavored cigarette. It is a hint of coffee. There is also chocolate, vanilla, cherry, peach, apple, pineapple, banana, grape, menthol, strawberry, cream, melon, and lemon.”
Campbell says that if you are selling any type of tobacco product, the electronic cigarette is a good, profitable addition. He also points out that if a retailer does not establish himself in the business today, his competition is likely to, now or in the future. There is another key reason to get into the business. It is a new product to the market, and if you are the only one in your area carrying it, you will attract new customers.
Campbell stresses that this product is unknown to the public, so people need to be educated about it. He has an information video that flea market operators and retailers can use. “This video is like an infomercial that lasts four minutes, with people that demonstrate the product; they take it apart and put it back together. There are probably 20 different people on the video that try the product and have their various points of view on what they like about it. There are doctors that come on that say you will not get cancer from the product. The video runs on a continual loop. I recommend that a retailer have a television or a DVD player at their location. If you were selling tennis shoes, you do not need to educate the public about the product. If you are selling electronic cigarettes, you do need to educate them.”
“Besides the $100 kit, we have a $330 kit with a player that will run the video on a continual loop,” Campbell reports. “In addition, the kit contains a big banner that tells the world you are selling electronic cigarettes, written information, and they get $600 worth of retail material that includes ten starter kits, cartridges, car chargers, cigarette cases and additional batteries. That is a low price to get started in the business.”
The following were interviewed for this article:
Gregg Campbell, owner
Garden Oasis LLC.
105 Palm Gardens Drive
Palm Gardens, NV 89039