Knowing how to price products in a smoke shop is crucial to your business — but it’s not always simple. Every item on your shelves has different wholesale costs, profit potential, and levels of customer demand that affect your profit margins.
Industry benchmarks give you a starting point: 5–10% for cigarettes, 50–60% for cigars, 40–60% for glassware, and up to 20–40% for vapes and disposables. Knowing these typical markups helps you price your cigars in line with customer expectations while keeping your business profitable.
Here are five pricing strategies to help you find the right balance and improve your store’s bottom line.
When pricing products in a smoke shop, you need to know exactly how much each product costs you to stock and sell. So, it’s not just the wholesale price — overhead costs like shipping, payroll, and rent also need to be included.
Use these steps to get accurate numbers:
Calculate landed cost: Add shipping, taxes, and distributor fees to the wholesale price. For example, a $60 box of cigars may cost $68 after freight and fees.
Include overhead: Factor in monthly expenses such as payroll, utilities, and rent. If overhead runs $5,000 and you sell 2,500 items monthly, that’s $2 hidden cost per item.
Revisit supplier terms: Review contracts and agreements regularly. Even small savings, like reducing a $10 delivery fee on weekly shipments, add up.
Once you know your costs, you can set markups that maximize your profits. For example, if a vape pen costs $20 all-in and you want a 40% margin, you need to price it around $33: (retail price – cost) ÷ retail price = margin.
With a mix of everyday buyers and customers seeking top-shelf options, smoke shops benefit from tiered pricing that meets every budget.
Here’s how to price products in a smoke shop using this strategy:
Anchor with low-cost, high-return essentials: Stock staples like rolling papers to fuel profits — low-cost, high-demand, and usually a 50% markup.
Introduce mid-range products: Add options like flavored cigars, vape disposables, and smaller glassware like hand pipes to give customers variety and increase margins.
Highlight premium options: Offer premium picks such as premium cigars, large glass pieces like water pipes, and branded accessories like humidors, at higher markups to appeal to quality-focused buyers.
Track purchasing history in your point of sale (POS) system to see which tier each customer prefers and adjust your inventory to match their buying habits.
Pricing isn’t one-size-fits-all. College-town customers and suburban shoppers have different expectations, so tailor your prices to local demand and competitor trends.
Start by doing the following:
Check competitor prices: Monitor nearby smoke shops’ prices for vapes, cigars, and accessories, and set your pricing to stay competitive.
Match neighborhood demand: Stocking hand-rolled cigars in a boutique market? Aim for margins closer to 60%. Serving a price-sensitive crowd? Stay nearer the lower end, around 50%.
Respond to sales trends: Track what’s moving quickly and raise prices on high-demand products — like disposable vapes or artisanal tobacco blends — while discounting slower movers.
Flexibly pricing products in your smoke shop helps you capture local demand without losing profitability.
Smoke shop accessories often have higher markups than tobacco products, making them essential for increasing your return on investment (ROI). Bundling these items with core purchases encourages customers to increase their spend per visit.
Capitalize on these opportunities:
Bundle products: Pair items like a lighter with a cigar or a vape with replacement coils, and price them as a set to bring in more revenue.
Upsell accessories: Suggest items like grinders, rolling papers, or cases at checkout to increase average ticket size.
Feature impulse buys: Place high-margin items near the counter to capture last-minute purchases.
Make sure your inventory system auto-flags restocks so add-on items never run out and every sale has upsell potential.
To price products effectively, you need visibility into performance — which items sell fast, sit on shelves, and deliver the best return. Smoke shop POS software provides industry-focused reports that turn this insight into smarter pricing.
With detailed analytics, you can:
Track product-specific margins: Identify which products boost your bottom line and which erode it, helping you decide where to make pricing changes.
Analyze sales velocity: Find out which products sell fast and experiment with higher pricing, while adjusting slower sellers with lower prices.
Compare across time: Track performance across seasons and promotions to know when to push prices higher, stay consistent, or roll out deals.
Build a reliable, long-term pricing strategy with the reporting features of a purpose-built POS system.
Smoke shop products can deliver strong profits, but only if you have the correct data. POS software built for smoke shops tracks margins, monitors demand, and gives you insights into setting prices that support growth.
Cigars POS combines detailed analytics with automated inventory control, helping you protect margins and increase sales. Added features such as age verification and loyalty programs simplify compliance and grow lasting customer relationships.
Schedule a demo today to learn how Cigars POS can help you price your smoke shop’s products to protect margins and grow sales.