As most of you already know; The FDA is now regulating E-Juice, and E-Cigarettes and really much more. Starting August 8th 2016, anyone making nicotine E-Juice or adding nicotine to E-Juice other then an individual for personal use is now considered a small tobacco manufacturer. The FDA has given anyone who they consider a small tobacco manufacturer until the date of June 30, 2017 to register and comply as a small tobacco manufacturer, recently that date was changed to September 30, 2017. So this applies to all vape shops who make E-Juice, all tobacco shops that make E-Juice and E-Juice manufacturers.
Registration is the easy part, compliance is where it gets complicated. That being said, even registration is a heavy burden financially, with average cost of registration between $6-10k. In a recent call to the FDA, it was reveled that less then 1% of the new “small tobacco manufacturers” have registered with the FDA.
Compliance is not only extremely expensive, it is hardly viable in a retail setting.
A year later; August 8th 2018 (this date was also recently pushed back 3 months) it only gets much worse for the E-Juice industry. At that point only Nicotine E-Juice products that have applications for approval may be sold past that date. The FDA estimates a cost of $600,000 per application, this is per nicotine strength per flavor per brand of E-Juice. E-cigarettes must also have applications, they are considered nicotine delivery devices.
The NicPack™ System resolves the problem created by the FDA. By using the NicPack™ System; vape and tobacco shops do not need to sell nicotine E-Juice and, therefore, do not have to deal with the outrageous expenses involved in registering and complying with FDA regulations in becoming a “small tobacco manufacturer”. In addition, since many of the smaller E-Juice companies can not afford these expenses, many of these smaller E-Juice companies have said they will only be making zero nicotine E-Juice as of September 30th, 2017. Larger E-Juice companies have expressed they will comply with the FDA regulations, but at who’s expense? We can expect nicotine E-Juice prices to go up. As far as the August 8th 2018 deadline, only 3 maybe 4 E-Juice manufacturing companies plan to go thru the approval process, this means much higher prices on E-Juice.
Vape shops can continue doing business as usual if they use the NicPack™ System. Vape Shops can make E-Juice as they have in the past but only make zero nicotine E-Juice. Vape Shops can offer Nic Pack™ Pillow Packs™, at a cost of $1 or less per bottle of E-Juice for those customers who want to convert the zero nicotine E-Juice to a nicotine containing E-Juice. By using the NicPack™ System and no longer making E-Juice with nicotine, or selling E-cigarettes for use with nicotine E-Juice, vape shops are now no longer falling under the regulation of the FDA for small tobacco manufacturer, which means that vape shops no longer need to register as a small tobacco manufacturer.
The NicPack™ System gives stores a leverage over the prices they pay for E-Juice. With nicotine E-Juice prices going up in three months, the stores can simply choose to only sell zero nicotine E-Juice (which would cost much less) and offer the NicPack™ pillow packs as an option to add nicotine to those zero nicotine E-Juice.
The NicPack™ System is a patent pending system who’s benefits we will touch on in this email. The main benefits of The NicPack™ System are: Saving Money, Inventory Reduction, Compliance With New FDA Regulations, and Simplifying The Vapor Industry. Please read below for an explanation on inventory reduction and the benefits associated. For a much more complete list and explanations of the benefits of The NicPack™ System please go to: www.Nic-Pack.com
Reduction In Taxable Inventory: An example would be the upcoming April 1st California tax. This tax is 27.4% on all nicotine E-Juice. Zero nicotine E-Juice is exempt from this tax. (in California the nicotine tax will go up every year over the next 3 years)
Wholesale cost on a bottle of nicotine E-Juice is about $10.00, this would mean $2.74 in Taxes, or Zero nicotine E-Juice (which often times is even cheaper) with no tax along with a NicPack™ pillow pack, which is $1 or less, plus tax of 27 cents or less for over all savings of over $1.50 per bottle at minimum on every nicotine E-Juice sale through out any store in the state of California.
For Inventory Reduction: Common Inventory Scenario In Stores That Specialize In Offering Vapor Products. E-Juice is often offered in 5 strengths 10 bottles of 0mg, 6mg, 12mg, 18mg, and 24mg. Drip Juice is often offered in 3 to 4 strengths 10 bottles of 0mg, 3mg, 6mg, or 0mg, 2mg, 4mg, 6mg.
Usually the inventory in a store is about 70% E-Juice flavors vs 30% Drip Juice flavors. That averages up to 4.55 nicotine strength per flavor. Stores that specialize in vapor products often have as few as 50 flavors across multiple brands to as many as 250 flavors of E-Juice / Drip juice. 50 flavors x 2 bottle sizes x 4.55 nicotine flavors on average x 5 bottles each equals 2275 bottles in inventory. Same calculation with 250 flavors equals 11,375 bottles in inventory. If the store paid $3 for 10ml, and $6 for 30ml E juice and the E- juice averaged around $10.00 cost that puts the inventory cost at around $14,000 for 50 flavors and almost $70,000 for 250 flavors.
Most stores are lucky to sell 5-10% of their inventory of E-Juice and Drip Juice on a weekly bases. The need for Nic Pack™ Pillow Pack™ inventory is about twice the max sales on the high end. So 450 in a store that carries 50 flavors and 2250 for a store that carries 250 flavors. Adding the Nic Pack™ Pillow Packs™ increases the inventory quantity to about 42% of what the original inventory quantity was in bottles. This is not true for cost, as the cost of Nic Pack™ is minimal in comparison to E-Juice or Drip Juice and therefore the inventory cost would only be at around 25% of original inventory cost. The space Nic Pack™ Pillow Packs™ take is also minimal in comparison both in storage and much more in display/shelf area.
The reduction of inventory percentage is independent of inventory quantities, the percentage of inventory is saved if you only have 20 flavors and one store, or if you have 100 flavors and 10 stores.
Zero nicotine E-Juice and Drip Juice shelf life is much longer then that of Nicotine E-Juice and Drip Juice, this helps reduce spoilage. The loss of a customer that once purchased a particular brand /flavor / strength no longer means that item is now dead inventory. Taxes on store’s Inventory for the end of the year are reduced.
Employee theft is much more manageable with the reduction in inventory. If your state has any sort of tax on vapor products the savings are heavily compounded. If your state adds a tax on vapor products you will likely have to pay that tax on inventory you already have in stock.
Additional Sales That Arise From The Nic Pack™ System. The chances of running out of a particular nicotine strength and a loss in sales is reduced dramatically. The addition of more strengths of nicotine per flavor on average doubles in comparison to what manufacturer offers. This is because The NicPack™ system offers 6-10 strengths available per bottle size. It does this with only 10 variations of NicPack™ Pillow Packs™ and the 10 NicPack™ Pillow Packs™ work on 10ml thru 100ml E-Juice and Drip Juice bottles alike.
Lots and lots of freed up shelf space equates to space to either add more flavors or sell other items. In addition a store now has freed up funds that were once tied up in inventory and can use those funds to generate other revenue.
Cost Of The NicPack™ System: Cost of the Nic Pack™ system is minimal and prices can be obtained at Partynuts.com. The NicPack™ system more then pays for itself when considering the savings and the additional sales and revenue the NicPack™ system offers.
Being More Prepared For The New FDA Regulations: Most of the smaller to midsize manufacturers of E-Juice and Drip Juice have already expressed their lack of being able to comply with the outrageous regulations the FDA has placed on the Vapor industry. Many of these manufacturers simple said they will only sell zero nicotine E-juice either as early as August 8th 2017 for the smaller manufacturers, and almost all other manufacturers by August 8th 2018.
Phasing Out Your Nicotine E-Juice and Drip Juice Can Be Done Over Time With the NicPack™ system: Phasing out your current nicotine E-Juice and Drip Juice inventory could and probably would take months, so it’s best to start asap. The idea is to get the NicPack™ system in your store and as nicotine E-Juice or Drip Juice sells, replenish some of it with Zero Nicotine equivalent, you will need much less. Any zeronicotine E-Juice and Drip Juice can now be used for a much wider variety of nicotine strengths then manufacturer offers.