me and my wife opened our smoke/vape shop a few years ago and sales were doing AMAZING. we had a smokeshop open up a street over from us last year and our sales have plummeted because they have prices set so low that they make probably a buck or 2 off their disposables. i’m at a loss right now, my customer service is top tier. we do giveaways, discount days, a loyalty program but I know im not doing everything that I can. our facebook and instagram does really good. I need to find a way to get more people in! any suggestions? thanks in advance!
Considering the number of vape shops in most areas, I would suspect the trading area would be rather small such as convenience store and other support services.
Perhaps as small as one to three-mile radius or a 10 to 15 minute drive time.
This makes sense because you said new entrant whacked your sales volumes.
In other words, the new store reduced your fair share of the market.
Absent differentiation and niche, new guy is attempting to create competitive advantage with cost strategy.
However, “So he actually gets his vapes from my vape distributor…”
So, he has no cost advantage unless it’s in overhead.
Arguably, new guy strategy is lower price will capture customers from your store and consumers from greater economic distance.
I doubt this strategy will hold up for a commodity business.
I would stick to my guns, avoid price war, and wait new guy out.
Often customers leave to check out new business and then slowly return when greener pasture doesn’t pan out.