Cigarette business: is it profitable to start?

tobacco

For most people, smoking weed and sex are something they can’t live without. Cigarettes are bought by every two men and every seven women – these are the statistics. Demand does not fall even after a series of measures to limit smoking.

Do you need a license?

No, a license and other special permits are not required to sell cigarettes. The main thing is that tobacco products should be excised; otherwise, it threatens to confiscate and impose a fine.

Is it profitable to sell cigarettes?

 The sale of tobacco products is certainly profitable since cigarettes as a product have several advantages:

  • ¬†Always in demand. Most firms face seasonal business problems, and tobacco sellers meet unabated demand year-round.
  • ¬†Tobacco has a long shelf life. Sanitary standards do not establish the shelf life of cigarettes, their warranty period of use. It is conditionally considered that the optimal shelf life is 12 months. After such a period, the product does not lose its properties: aroma, astringency, slight bitterness. However, if the tobacco is stale, the buyer will not be able to return it after the purchase because there will be no legal grounds for this.
  • ¬†Start-up costs can be minimized by purchasing only hot goods, renting a small area for sales, hiring only one employee per shift.
  • ¬†Business legalization takes a minimum of time and investment.
  • ¬†No need to buy production equipment. Resale is practised from suppliers – wholesalers or manufacturing factories.
  • ¬†There is no need to wait for profit for years: a business can pay off in 5-7 months even if there is a competitor “around the corner”.

Cigarette production

 The first thing you need is a business plan. You can entrust its development to professionals or do it yourself.

 Brief Action Plan

 Strict adherence to a step-by-step action algorithm will help identify the main difficulties, predict development prospects, and predict costs and profits. To open your tobacco shop, you must:

  • ¬†find a place: rent a retail space, stall, kiosk, or purchase real estate;
  • ¬†register a business, choosing a form of activity, a taxation system;
  • ¬†obtain work permits;
  • ¬†make preliminary calculations of costs and projected profits;
  • ¬†equip the store for the display of goods;
  • ¬†determine the assortment, monitor which brands of cigarettes are the most popular in the region;
  • ¬†conclude contracts for the supply of cigarette products;
  • ¬†hire staff.

Choosing a location

Where do you usually buy cigarettes? Wherever you see a tobacco kiosk, a pavilion, so when choosing a location, you need to focus on a random buyer acting intuitively. An ideal place will go near a busy intersection, near a shopping centre or market.

When renting a point, it is necessary to consider the population. A kiosk can be set up in a small village, and sales will go well due to the lack of competition.

To save money, you can convert the kiosk into a pavilion by making an entrance for the buyer and decorating the premises like a store.

When locating a tobacco shop in a residential area, you need to pay attention to the type of nearby houses. There are much fewer apartments in elite high-rise buildings than in old-style houses. A high population density is observed near new buildings with 1-2 room apartments and “studios.”

It is necessary to personally visit the place of the proposed lease and calculate how many people pass by the point per day, at what time the traffic is maximum. Based on the obtained indicators, you should consider the store’s schedule. If there is a night-type establishment (bar, club) nearby, it is advisable to close as late as possible, but only if, following the establishment, visitors pass by a point of sale.

Assortment, commodity filling

Competent display of goods and recognition of brands in the window are the advantages of the store over competitors. Before making the first purchase, you should analyze what sells best in a particular region, highlight the running group of cigarettes and more expensive brands that can be purchased for personal use and as a gift.

In addition to the standard assortment, several types of electronic cigarettes should be available. The manufacturers’ goods are in the greatest demand: Vergy, Pons, Organic.

Because markup on popular cigarettes is only about 10% (more on that below), you should immediately expand the range of products by offering:

  • ¬†hookah tobacco;
  • ¬†cigars and cigarillos;
  • ¬†vapes;
  • ¬†imported cigarettes;
  • ¬†cigar accessories: guillotines, punches, pipes, miniature humidors;
  • ¬†ashtrays, matches, lighters, cigarette cases;
  • ¬†hookahs.

 The markup on them can be many times higher.

Staff

Wages are a significant expense item. Additionally, you can introduce a bonus system and pay a percentage of sales. This will be an incentive for employees to promote the product and learn about the features of different types of cigarettes.

The number of employees directly depends on the work schedule of the pavilion. A point operating from 8 am to 10 pm will be served by two people, for a 24-hour store it is necessary to hire three employees working in shifts.

First, you can take on the functions of the seller. This will help identify the buyer’s needs, listen to their feedback and better navigate the assortment, and then transfer duties to the changer.

Conclusion

A tobacco shop is stable, but it does not promise big profits if only one point works. In the future, it is necessary to strive to open several small tobacco shops, creating a trading network.


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