Smoke Shop Monthly Income: 5 Ways To Maximize Store Profits

Running a profitable tobacco shop is tougher than ever before.

Between rising taxes and regulations on tobacco products, decreased smoking rates, and growing competition from online retailers, staying in the black is challenging for many tobacco retailers.

But all is not lost!Your tobacco shop can thrive by thinking creatively and maximizing your sales opportunities through legal means.

This article highlights five ways you can maximize your store’s profits — from customer retention to leaning on your point of sale (POS) system; you’ll have a guide to follow to drive more sales for your smoke shop.

What Is the Average Smoke Shop Monthly Income?

There is no one-size-fits-all answer for determining the average monthly income for smoke shops — mainly because every smoke shop is unique. You have to factor in location, clientele, and inventory selection. However, we can lean on overall industry statistics to determine what you could make.

According to estimates, on average, tobacco and smoke shops bring in around $300,000 — so monthly income would be around $25,000. However, while urban shops with high foot traffic can expect to make or exceed this average, rural shops could earn less. It all depends on the specifics of your business.

An important question to ask: What positively or negatively affects your profitability? Many things you’re in control of — and some you aren’t. Product mix and inventory management are critical; stocking the best-selling cigarette brands, the latest vape models, and trendy tobacco accessories can boost sales. However, your store location and local demand for tobacco products can create a revenue ceiling.

Getting creative can help drive profits. Promotional strategies and vendor partnerships play a role, as do your tools. — specifically, your point of sale (POS) system. Upgrading to a modern, industry-specific POS system provides sales reports, inventory tracking, and actionable insights to help maximize profits. A modern POS system also speeds up checkout, manages customer loyalty programs, and facilitates age verification.

With the right strategies and tools, boosting monthly revenue is achievable. Let’s find out how.

1. Focus on Customer Retention

Existing customers are the lifeblood of your business. Retaining customers is just as, if not more, important than acquiring new ones. Customer retention can boost your monthly income. 

It’s estimated that increasing customer retention rates by just 5 percent can increase profits by 25 percent. Why? Because loyal customers shop at your store more often and spend more per transaction.

While a new customer might earn a single sale, a loyal customer provides recurring revenue. They might also be less sensitive to price changes and cheaper to market to with tailored promotions.

Related Read: Vape Customer Loyalty: 4 Fun Smoke Shop Ideas

Your POS system can assist with customer retention.

• You could implement a loyalty program with punch cards or points that offer rewards to frequent shoppers. Loyalty programs incentivize repeat visits.
• Send occasional emails reminding customers about new inventory arrivals, sales events, or other store news. This keeps you top of mind.
• Offer exclusive perks for VIP shoppers who spend over a certain amount per month. Access to a lounge, special sales, and product samples rewards your best customers.
• Track purchase history and customer details through your POS system so you can identify top spenders and tailor promotions to them.
• Monitor online reviews and be proactive about addressing any customer concerns. Quickly resolving issues improves satisfaction.

Focusing on customer satisfaction and loyalty is one of the best ways to stabilize and increase your monthly revenue.

2. Host Special Events

Hosting unique special events is an easy way to engage customers and drive traffic to your smoke shop. Bringing together like-minded people allows you to sell to a captive audience. When you show your expertise in the space, you give customers a reason to visit and spend.

Here are some event ideas:

• Cigar tastings and rollings featuring brand ambassadors from tobacco companies. Tastings can help market specific products.
• New product launch parties when you carry hot ticket items like limited edition vapes. Events drive buzz.
• Comedy shows, author readings, or classes relevant to your shop. Entertainment and educational content will attract enthusiasts.

Some events help customers engage with your shop; others attract new patrons who may not otherwise visit.

Your POS system can help assist with planning and marketing events. For example, with the right POS system features, you can use customer purchase data to advertise events to the customers most likely to attend. You could also offer early access to events for VIP shoppers. Last, analyze sales around event dates — which drove the most revenue? Use this information to guide future plans.

3. Offer a Lounge Area

Consider adding a lounge area if you want customers to spend more time in your smoke shop. Your customers will appreciate the space to relax, socialize, and spend more money in your store.

Here are some tips for creating an inviting lounge:

• Furnish the space with plush chairs, sofas, and low tables to create a laid-back vibe perfect for enjoying cigars and conversation.
• Consider amenities like a coffee and beverage station, phone chargers, WiFi, and TVs to make the lounge inviting and functional.
• Display magazines and reading materials relevant to your products to keep customers engaged.
• Host special lounge events like BYOB nights, trivia, and new product demos to drive visits.
• For large shops, offer a separate members-only VIP lounge for top customers with added perks.

A note on the legal hurdles you may face: Many states prohibit indoor smoking in commercial establishments, which would make an indoor lounge illegal. However, there are exceptions in some states for tobacco shops and cigar bars. Outdoor lounges may be legal in areas with exemptions for tobacco shops, but local ordinances on smoking patios/decks would still apply.

Your POS system can help track lounge visits and purchases. The goal is to optimize your space and get customers to stick around.

4. Offer Delivery Services

If you want to tap into a new customer base, providing delivery services is the way to go. Bringing products directly to customers’ homes lets you serve new markets beyond storefront foot traffic.

For example, you can partner with a delivery platform like DoorDash to make delivery simple and affordable. (Note: read the DoorDash tobacco delivery guidelines before delivering tobacco products to customers.)

Be sure to promote this service across all your marketing channels. Customers love convenience, but might not know that you offer this service. Update your website and social media pages with delivery options and instructions. You can also use in-store signage to advertise.

Related Read: E-Commerce vs. Brick-and-Mortar Tobacco Shop

Your POS system can track order histories and customer data. Which items are popular delivery items? Sales reports give you insights into delivery demand patterns, and customer data can help you target customers with marketing emails and offers.

5. Optimize Your Inventory

Managing and optimizing your smoke shop’s inventory is critical to making a profit. You can easily meet customer demand when you have the right products in stock. When you don’t manage inventory well, you risk frustrating your customers and losing sales.

Start your inventory management journey by analyzing reports from your POS system. Identify fast-selling products, like top-selling cigarette cartons, vape models, cigar brands, and accessories that fly off the shelves. Prioritize keeping these products in stock. On the other hand, slow-moving products just take up shelf space and tie up cash — not ideal.

Stocking products correctly also plays a role here. For example, monitor temperature and humidity levels closely for cigars and humidors. Preserve freshness and prevent spoilage by using hydrometers and humidification systems.

You also need to align purchasing and reordering cadences with demand. Order too little, and stock runs out. Order too much, and you tie up capital. Your POS system can guide this process. You can set alerts for when a product reaches a specific number, removing the guesswork from reordering. Optimizing your smoke shop’s inventory mix becomes much easier with real-time visibility into sales data.

Increase Your Smoke Shop Monthly Income With the Right Tools

We’ve covered various ways to increase your smoke shop’s monthly income. 

First, improve inventory planning, customer tracking, age verification, and revenue insights by upgrading your point of sale system.

Then, invest in retention programs to build loyalty with existing customers and increase repeat business. You can offer delivery services and host events to expand your audience and, finally, optimize inventory to drive customer engagement and on-site spending safely and legally.

It’s important to note that for any of these approaches, you must ensure you’re following all tobacco sales and promotions regulations.

Any strategy needs the right tools to work. At Cigars POS, we pride ourselves on working with tobacco and smoke shop owners. We provide an industry-specific POS system that makes age verification simple, inventory management a breeze, and customer loyalty easy.

To start boosting your profits today, reach out to our tobacco experts and schedule a demo.