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How Much Do Smoke Shop Owners Make? + 5 Tips To Increase Profits

The revenue of US tobacco stores has grown over 4% in the last five years, and signs point to that trend continuing.

Exciting new offerings in the tobacco industry like vapes, CBD, and kratom have helped diversify the market and bring in younger customers. That’s good news for both independent tobacco store owners and entrepreneurs looking to get into the industry.

But just how much do smoke shop owners make — and what are the factors that contribute to a successful smoke shop business? In this article, we’ll answer both questions and provide actionable tips on how to boost your profits.

How Much Do Smoke Shop Owners Make on Average?

How much do smoke shop owners make? It depends. 

Smaller shops can expect to take home between $50,000 and $100,000 per year. Mid-sized and larger shops can take home $300,000 to as much as $1 million yearly.

Profit margins can also vary, but typically fall between 20 and 80%. Both your revenue and your profitability are affected by your location and the types of products you sell.

Of course, the take-home pay for a smoke shop owner will depend on a variety of factors, such as the number of employees on payroll, the tax rates in their state, the annual costs of licenses and permits, and their store’s profit margins. All of these are worth taking into account when writing your smoke shop business plan or budget.


Key Factors Behind Smoke Shop Profitability

The important question isn’t “How much do smoke shop owners make?” — it’s “How profitable is my smoke shop business?” 

Even if you bring in higher revenue on paper, your actual profits can evaporate in the face of high operating costs, unoptimized pricing, and ineffective marketing. However, by leveraging technology designed for smoke shops and focusing on creating customer-centric processes, you can improve your business’ financial outlook.

Here are a few common factors that help boost smoke shop profitability: 

  • Efficient processes: From creating vendor orders and ringing up customers to inventory management and promotions, the more efficient your processes are, the more time you can spend on customers and marketing.
  • Diverse selection: It’s important to offer a wide selection of products, from staples like cigarettes and accessories to trending items like CBD and vapes. Smoking trends change frequently — so should you. 
  • Great location and marketing: Choosing an area with high foot traffic and interested customers is the first step toward building revenue and ensuring profits stay high. In the absence of a perfect location, strong marketing and online sales can help bring in more business.
  • Customer service and expertise: As an independent smoke shop owner, it’s more important to offer tailored customer experiences and show off your expertise to retain customers and stand out. 
  • Data-driven decisions: Profitable smoke shops leverage sales and historical data from their point of sale (POS) systems to make smarter decisions about what stock to carry, how to price products, and how to make the most of advertising initiatives.
  • Convenient customer experience: Successful independent smoke shops fully harness modern technology and high-risk payment processors to offer online sales, digital payments, and other conveniences that today’s customers expect.

Finding ways to improve these areas is a solid first step toward increasing your profit margins and take-home pay. 

How To Boost Your Smoke Shop Profitability: 5 Tips

Every smoke shop owner wants their business to be profitable — the hard part is figuring out how.

Start by setting some goals. Are you looking to expand your customer base, open new locations, or just improve your business’ financial health? That can help you determine which strategy makes the most sense for you in the short and long term. 

Here are five tips to get you started:


1. Find Your Tobacco Niche

There’s a lot of competition in the smoke shop industry — and if you do the same things as your rivals, you’ll turn into “just another smoke shop.” Nobody wants that.

Instead, focus on establishing a niche that sets your shop apart. Start by doing a little market research on other smoke shops in your area.

What are their strengths? What’s their store’s atmosphere like? Who are their target customers? What don’t they offer? Find opportunities.

Then, you can hone in on the unique products and services that will differentiate your brand. For example, if the smoke shops in your area have an extensive vape collection, you might choose to focus more on cigars and pipe tobacco. You could also offer in-store vaping (depending on local laws) or an exclusive cigar lounge to let people try out unique products.

You don’t have to find a niche by looking at your rivals and completely turning your store around. Atmosphere and expertise are what people love about local stores. So, work on creating a unique and friendly atmosphere that encourages people to come back again and again.

2. Create a Customer Loyalty Program

Customer loyalty programs are addictive. 

Imagine going into your favorite smoke shop to buy a couple of refill pods for your vape pen. The cashier says by adding just a few extra dollars to your order, you can earn enough points for a freebie. 

Would you spend a little more to get a free item? For many customers, the answer is a resounding “yes.” 

Creating and customizing a customer loyalty program for your business is an effective way to upsell customers while keeping them coming back for more. Not only is earning points satisfying but it creates a sense of investment in your business. When customers earn rewards shopping with you, why would they want to go somewhere else?

The data you gather from customer loyalty programs is invaluable as it gives you insights into the shopping patterns of your most loyal customers. 

the ultimate guide to effective tobacco marketing

3. Leverage Data for Smarter Decisions

When smoke shop owners make business decisions based on a hunch or intuition alone, it’s about as effective as flipping a coin. Not that using intuition is a bad thing — but by backing it up with data, you can get to the heart of what makes your business profitable.

Tracking data on your POS system gives you all kinds of information you can use to improve your profits, such as:

  • Sales data: Identify your bestsellers and top-selling product categories to make smarter decisions about what products to stock and which vendors to work with.
  • Inventory data: See your turnover rate and stock levels in real time and identify sources of shrinkage before they become an issue. 
  • Peak hours: Learn your peak hours and seasons so you can make smarter decisions about when to bring in extra staff.
  • Expense tracking: Compare your takeaway profit vs. your overhead costs like rent, utilities, and software subscriptions.
  • Marketing effectiveness: See how many sales resulted from specific discounts or are tied to your customer loyalty program to improve your marketing strategy and better tailor products to your most loyal customers.

Data from your POS system gives you an honest, bird’s-eye view of your store’s performance, so you can spend more time on what’s working and less time on what’s not. 

4. Market Your Smoke Shop

One of the reasons smoke shop profits may fall short of expectations is that potential customers don’t know what’s on offer. While tobacco stores have some very specific advertising rules they have to follow, there are still a lot of effective ways to spread the word about your brand.


Most people’s first contact with your business will be via your website and Google Business Profile. Keeping these up to date is a great way to present your brand, give people an idea of what you have in stock, and showcase your expertise.

Social Media

While you can’t run paid advertising for tobacco products on many social media platforms, there’s still a lot of opportunity to get customers through organic, non-paid traffic. Post regularly highlighting your selection and new arrivals to generate interest.


Email might be seen as outdated, but many people still like email newsletters as a way to connect with their favorite stores. Use the contact information you collect from your in-store customer loyalty program or online sales to offer exclusive discounts and recommendations.

For an in-depth look at how to market your tobacco shop, check out our Ultimate Guide to Effective Tobacco Marketing.

5. Offer Online Sales

An increasing number of people prefer to browse and shop for items online. That’s why many smoke shop owners look for ways to infuse their expertise and personality into their online store. 

Work with a POS system that supports online sales for accurate inventory tracking and sales information. When creating your website, identify your top sellers and take the extra time to write descriptive product details. 

Think of your online store as an extension of your brick-and-mortar location. Make sure your strengths come through on both.  

Last, for both online and offline sales, ensure customer payment security by using a PCI-DSS compliant high-risk payment processor.

Related Read: The Ultimate Guide to High-Risk Payment Processing for Smoke Shops

Improve Your Cash Flow With a Smoke Shop POS Solution

Whether you are a big, established name in the tobacco retail industry or a strappy newcomer, technology is transforming the way tobacco retailers operate. 

Smoke shops need a way to maximize their efficiency while maintaining high levels of customer service to achieve more revenue and a healthy cash flow.

That’s why smoke shop owners around the country rely on industry-specific solutions like Cigars POS to help them optimize processes, stay compliant, and improve the customer experience.

Schedule your demo today to see how Cigars POS can set your smoke shop up for long-term success.

About Cigars POS

Cigars POS offers the ideal solution for tobacco, cigar, and pipe shop owners.No complex integrations, no contracts, no waiting on hold to talk to service reps who can't help you.

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