E-Cigarette Prices and Why They Vary

Last night I was talking to some people and the topic came up of why there is such a broad difference in price between the different e-cigarettes available now. You can get some starter kits for as low as $18 bucks while others can run $140 or more. Then we have the free trial guys who say they will let you try it free and on the other side of the spectrum we have the mall guys who charge $150 to $200 for their offers.

What are the differences? Why is there such a wide range of prices for what is basically the same product? It is an interesting topic of discussion, so I thought I'd do a little about my thoughts here.

You Get What You Pay For

I've never been one to go cheap. I learned early in life that you get what you pay for. Yes, you may save a few bucks here and there shopping at the Wal-Marts and the Dollar Stores of the world, but in the long run you may actually end up spending more money. Cheaper goods don't usually last as long, are not of the highest quality or come with a lower level of customer service. There is a good reason for that.

Price Quality Service

Pick any two.

It's an old adage in sales and marketing but it does hold true. You can't have it all and when buying anything you get to pick any two of these factors as your main priorities: Price, Quality or Service. It's simply impossible for any company to offer the best of all three, although many do try to claim they can! But in the end you can only have two, one of these factors has to give to allow the other two to exist.

Quality

Quality comes at a price. Well made goods cost more. Quality ingredients cost more. High standards of manufacturing cost more. So, when you choose to take quality as your most important factor, low price is usually what you must give up in order to have it.

Customer Service

Good customer service is not cheap. Employees cost money, so does training, computer networks, phone lines, call centers, offices, websites, sales forces, warehouses, fast shipping and all those things that go along with what we consider to be good customer service.

Price

And finally we come to the topic of this discussion: Price. Price is usually the factor that dictates the levels of the other two factors that are available. The money available to a company to provide quality or service comes directly from the profit they make on each sale and that is ultimately dictated by price.

Marketing

Now, i'm also going to throw in marketing here because it does have a large impact on any company's bottom line and is something we must take into consideration when looking at price.

For example: if the company you are thinking about buying from is one you heard about on a national radio show or TV show or in a major magazine are you going to expect them to have the lowest price or the best products? Probably not. Major media is really expensive. An ad in a magazine can run in the thousands of dollars and a radio spot or TV ad will most probably be in the 10s of thousands range. That money has to come from somewhere.

Or if you see their ads everywhere at the top of searches in Google or their banners on every website you see you have to realize that costs money too, sometimes big money and that is also going to be reflected in the levels of service, quality and price that you get.

Price vs Quality vs Service: Something for Everyone

Now, the good news with this formula of Price = Quality x Service is that it allows something for everyone. Not everyone has the same standards or interests or money! Not all people care about customer service or high quality. Those who do are willing to pay for it, those looking for a lower price are willing to fore-go a bit of the other two to get it.

It's the reason we have name brands vs store brands vs no names at the grocery store. It's the reason we have Mercedes cars that cost $90,000 and the Toyota's that cost $9000. While people argue over which is better, the simple fact is that both companies can stay in business because they cater their products to certain customers who are interested in a certain mix of the three factors: price, quality and service. A Mercedes costs more, but it is a well built automobile with some of the best customer service in any industry. Toyota's are good cars too and indeed have their advantages, but they do not supply the same levels of customer service and craftsmanship you will find in a Mercedes.

E-Cigarette Prices

How does all this effect electronic cigarette prices? Well, e-cigarettes are no different from any other product and each of the companies aim for a certain segment of the market, customers who enjoy a certain mix of our three sales factors.

Is one better than the other? Well, that's a matter of personal opinion now isn't it? Just like the folks who drive a Mercedes vs the Toyota people. Each believes their car is best because it fits their personal needs. Same with ecigs.

E-cigs in the Mall

The mall guys are the most expensive and for a very good reason: mall space is expensive. They have a high over head for that stall you saw them at, sometimes as much as $50 - $100 per square foot per month! Then you add onto that the stall and shop fixtures, the employees to man it during mall hours, cash registers, insurance, taxes, shipping and storage and you can start to see why their kits cost $200.

But, in exchange for that high price you get the convenience of driving to your local mall to get refills or have your questions answered and you get to actually see the product you are buying, try it out first, talk to the salesman etc.. You trade price and some amount of quality for personal service and convenience.

The Big Online Retailers

Next we have the big online retailers. Their prices are less than you find at the mall, but they also charge $75 to $150 for a starter kit. Why? Well, it depends.

Many of these companies have their own manufacturing and distribution systems. Some are made in the USA which will always drive price up over something made in China. Most of these companies have very high quality products, some provide great personal customer service, some spend a lot of money on marketing and some provide all three, thus the higher prices.

But the main benefit with them all, besides the fact it's not one guy at his kitchen table drop shipping products from China, is that you know they are going to be around, you know they have an established brand and the money behind them to weather out the storms.

Take for example, Njoy and Smoking Everywhere, honestly not my two favorite brands, but arguable two of the biggest and most established. When it came time to sue the FDA over their policies towards ecigs, it wasn't the little guys or the free trial guys who could afford the millions of dollars in legal fees to fight the government, it was the big boys with the higher prices who could afford expensive litigation.

The Small Online Sellers

The small guys usually have one big advantage going for them: Low Price. These are the guys who sell starter kits for $25 - $50 bucks. Sometimes they also offer either a good product or good customer service too.

Being small means you have less overhead and they are able to pass that on to their customers. Having the Internet means they can spend less on marketing, staff, offices and phones and still attract customers. Having a large resource of products manufactured in China means they don't have to have their own manufacturing or distribution networks. This has spawned hundreds of small companies, many of whom are really quite good and have found a great niche in the market catering to people who prefer low prices or more personal customer service or both.

The drawback to the small guys is that they have fewer employees, less financial and legal resources and most often are selling lower quality goods bought wholesale from the large manufacturers in China. Because of this they may have stock issues from time to time or suffer more and recover more slowly from a bad batch of product. They are also more susceptible to the anti smoking campaigns threats of lawsuits, FDA customs seizures and are the most affected by things like new credit card processing company or bank policies against ecig sales brought on by the powerful pharmaceutical and big tobacco lobbying efforts.

With the small guys you usually get more personal customer service and lower prices. But you also have the risk those low prices may not be able to sustain them for long or might equate to cheaper products.

the Free Trial Guys

Now it's no secret I don't like free trials. It's just too risky in my opinion and this business model has been so abused in the past on the Internet that I just don't trust any company offering a free trial as their main form of marketing. Too often in the end, that free trial ends up costing you more money than you could have bought one of the name brands from the big boys for.

The main benefit of the free trials though, and the reason they work so well marketing with nothing more than some adwords pointing to a fake news site and a one page "Sign up NOW!" website is that people love something for nothing. Having the opportunity to try out an ecig for a couple of weeks with the promise of easy returns and refunds if you don't like it appeals to many people. And not all of them are scams, some actually do let you try it and send it back if you are unhappy.

The trouble with the free trials is the high risk they take. Sending out products to try for free is risky. Things get lost in the mail, people don't return them, you get reported and sued when people forget they promised to pay you in a couple of weeks or signed up for a recuring monthly charge.

It's a big hassle for the company and to compensate for that they charge you far more than what your product is worth. Most of the free trial offers I see going at the moment are selling products that cost $5-$10 wholesale and yet they charge you $60-$90 bucks after the trial period is over. Most often, the $10 you pay in shipping not only covers their cost of the product, but the shipping as well. The rest is profit gravy to them. It's why it's such an attractive marketing tactic, you get people with the free trial and then charge them three times what it's worth and get their cartridge business every month.

The key to finding good free trials is to research the company. Watch them for a few days, see if their website stays up longer than two weeks. Call their customer service number and see if people actually answer and seem friendly and helpful. Ask questions about the company, where they are based, are they licensed and if so where?

READ THE AGREEMENT!!! Often there are hidden charges in the agreement people fail to read, or the fact you will be signed up for other things above and beyond what you thought you were buying. Always read the entire agreement!

Ask around, research consumer complaint websites and see if others have had issues with them. While not all free trials are scams, be careful and make sure you are buying from a reputable company before you give them your credit card number.

Besides, most of the established and reputable companies offer a 30 day money back guarantee. Isn't that better than a 14 day free trial?

Some Very Good Reasons Why E-Cigarette Prices Vary

As you can see, there are many good reasons why prices vary so much. As with any product you must take into account the whole mix of price x quality x service and decide which mix of the three meets your particular needs. Not everyone wishes to own a Mercedes and not everyone wishes to own a Toyota. It's no different with e-cigs.

Just always remember one thing: You get what you pay for.