Cutting Your Smoke Shops Costs To Survive A Sluggish Economy

It’s no secret that 2024 hasn’t been the year of economic splendor that we all hoped for.

In fact, economists are spinning in circles like Pee Wee Herman trying to figure out if we are going to be okay, are already doomed, or somewhere in between!

So in face of all this economic uncertainty, the best defense you can prepare for your Smoke Shop is to go on the offense and start cutting costs ahead of time.

These don’t have to be massive structural changes, but instead can be the sum total of several different simple cost cutting methods.

To learn more about how to cut costs and what the trade offs involved are, keep reading in this Got Vape Business Analysis for those answers and more.

Table of Contents:

What is Cost Cutting Strategy in Business?
Does Cutting Costs Increase Revenue?
How to Cut Costs at Your Smoke Shop
Reduce Your Smoke Shops Utilities Spending
Shop Around for Goods and Services
Consider Switching Your Credit Card Processor
Put Off Unnecessary Spending
Employ Cheap Marketing Strategies
In Conclusion… Only 4 Months of 2024 To Go

What is Cost Cutting Strategy in Business?

In the world of business, a cost cutting strategy is when a company, i.e. your Smoke Shop, decides to voluntarily reduce their expenditures in order to increase their cash flow.

This can be achieved in a number of different ways and each shop's “strategy” will be highly dependent on their own specificities. At the same time there are many common ways that you can reduce your expenditures that apply to smoke shops both large and small.

Does Cutting Costs Increase Revenue?

Yes and no. The trick to this question is that while cutting your costs can lead to a higher revenue when done right, the flip side is also true in that it could result in you making even less money!

How can this be? Well for example consider you are selling CBD disposables at a steady clip, but as part of your cost cutting measures, you swap brands to a cheaper one that has a higher return on investment for you.

Despite spending less on your product, you then notice that customers have picked up on the lower quality, are buying less, and thus you are making less revenue than before.

While this is highly dependent on the situation, it's important to be aware that cutting corners and rolling back on expenditures isn’t always the best move.

That being said, as long as you apply proper judgment and act with a scalpel instead of a chainsaw then you can absolutely increase your revenue via cutting costs.

How to Cut Costs at Your Smoke Shop

Now we are going to break down some of the various ways that you can gradually cut costs to build up a proper bulwark against the effects of our stagnant economic situation.

Remember to always tailor these to your Smoke Shop’s own situation and you'll be well on your way to being ahead of the curve if anything takes a more serious downturn.

Reduce Your Smoke Shops Utilities Spending

First, among the ways to reduce costs, is that you should review how much you are spending on utilities each month to see if there is any room to reduce them. Summer and Winter will obviously see spikes in electricity and gas, but on average you should be able to get a handle on how much you are spending.

For your electricity bill, review what types of lightbulbs you have in your shop and consider swapping over to LEDs or other more green options.

While you have to weigh the cost of the new lights against your savings, some states like California have enacted bans on fluorescent bulbs and mandated updates so you are more than likely saving yourself the trouble of having to do it later.

LED lights project the exact same amount as fluorescent bulbs, but on average use half of the energy. This means that the sooner you swap your lights over, the sooner the savings will start adding up.

Go whole hog by replacing all your bulbs, or instead gradually swap them over as they naturally break. Either way, it's a solid method to begin lowering your costs without having to commit to any drastic changes.

Shop Around for Goods and Services

Another way to cut costs is to attempt to negotiate for lower prices or instead consolidate where you are buying your products from. Both of these options can potentially allow you to get a much lower price and thus will be able to get a higher return on your investment.

If for instance you were getting your rolling papers and lighters from two different sellers, contact both to see if they will offer a bid to do all of it. This lets you play the situation to your advantage by giving yourself options instead of being locked in to one.

Never jeopardize your current situation, but don’t be afraid to shop around for a better situation while you have the time and money.

Should you be paying for a cleaning service in your shop, consider looking for a cheaper / less frequent option and instead put the extra effort yourself into maintaining cleanliness. This can save you money and at the end of the day is easy to do.

Consider Switching Your Credit Card Processor

A nuclear option exists for lowering your costs in the form of swapping up your credit card processor. While this is a massive can of worms to unleash, it is worth it to explore the other options, should you not be satisfied with your processors.

Lucky for you we have a full blown breakdown of the high risk credit card processors that your smoke shop would be dealing with right here in our Got Vape Wholesale Business Investigation.

Read over our thorough breakdown and consider for yourself now when you have a functioning processor if potentially you could save money with someone else.

Put Off Unnecessary Spending

With pulling our belts tighter comes the inevitability that you should try to hold off on any non essential expenditures while things are so slow. That means if you were thinking about spending that 5K on getting a new sign installed on top of your shop, you should probably hold off on it.

Unless the letters are falling off to the point of risking dropping on someone, it’s better to keep that money in the bank should you need it down the line.

Put a temporary freeze on any hiring or expanding of your enterprise, if you were thinking of getting a new shop clerk maybe it's better to extend the hours of your current staff to fill those gaps instead of having someone entirely new.

Additionally if you do have employees, try to keep turnover as low as possible. Training new people is a taxing process and can lead to your attention being taken from where it needs to be.

On the flip side of that, if you find yourself with slower days and too many employees, unfortunately sometimes you may have to be forced to reduce hours or instead shift which days people are working in order to have staff on hand exactly when you need them.

Employ Cheap Marketing Strategies

When in doubt, do what’s free. In this case that is going to be employing your full bag of tricks to spread your shop's reach throughout your area without spending a dime.

For a grassroots approach, put on your best attitude with customers and at the end of the transaction ask them to review you online. Sure only 1/50 will probably actually do it, but that will eventually add up to boost your smoke shop's review.

That way for the cost of nothing, you can slowly raise your rating and naturally generate more foot traffic to your business.

Other types of cheap marketing include the repertoire called Guerilla Marketing, which is a type of marketing using unconventional methods to reach customers. Many of these methods are also devoid of any costs or if they do are relatively cheap. Check out the link for our full breakdown on Guerilla Marketing!

In Conclusion… Only 4 Months of 2024 To Go

Now is the time to batten down the hatches, operate smart, and bide your time for when the economy is back to its regular booming self.

Lucky for us, the year is almost ⅔ of the way over, which means we only have a few more months until the new year arrives with new hopes, economic trends, and wallets more willing to spend at your shop.

For more breakdowns, insights, and industry commentary check out the rest of our writing over at the Got Vape Wholesale Business Blog! Look over postings that break down everything from the current mushroom gummies craze, all the way to how to move your back stock.