Vaping vigorously – how one SME is growing fast thanks to the e-cigarette revolution
7 min read
12 October 2015
Walk down any street in Britain or glance at office workers hanging around the entrance to their building and you’ll see people ‘vaping’. The market for electronic cigarettes is growing rapidly with use of e-cigarettes, which was up by 75per cent last year to reach £459m, according Euromonitor.
Public Health England (PHE) recently concluded that e-cigarettes are significantly less harmful to health than tobacco and have the potential to help smokers quit smoking.
“The current best estimate is that e-cigarettes are around 95 per cent less harmful than smoking,” it said.
One new and fast growing company that is surfing the ‘vaping’ tide is the Electric Tobacconist, an online e-liquid and e-cigarette retailer. Founder and CEO Pascal Culverhouse takes the industry view that e-cigarettes can help people to stop smoking traditional cigarettes.
Launched in July 2013, the Electric Tobacconist aims to offer electronic cigarette shoppers a chance to find everything they might need on one website at, what it claims are, the best prices. It sells all the major UK e-cigarette and e-liquid brands with a price match guarantee.
“With my father being an entrepreneur, I grew up seeing the freedom and enjoyment that running your own business can give you,” Culverhouse explained. “He’s 70 and still enjoying working full-time for Fantastic Fireworks, the company that he founded 30 years ago. So I knew deep down that I wanted to run my own company one day.”
The idea for the Electric Tobacconist came when he was working for the family business and a fireworks supplier mentioned that he was shipping some electronic cigarettes to the UK with the intention of setting up a brand.
“Knowing what I knew about selling fireworks online, this immediately had me rushing back to my office to research the market,” confessed Culverhouse. “My own online e-cigarette website was launched and went live within 12 weeks.”
His previous job as a cold-calling advertising salesman and his time at the family firm, where he was given freedom to manage the retail division, gave him a good grounding for running his own business, he believes.
Fantastic Fireworks also provided a backend stock system, so Culverhouse initially only needed to create a new front end for the site and to buy a modest amount of stock. All subsequent growth was based on income generated from this.
The Electric Tobacconist is one of the few websites that offers everything that a “vaper” needs. “Also, because we’re an online-only retailer, we don’t have to think about things like product testing, trade accounts and any other such matters that can distract in a big way,” said Culverhouse. “All we have to concentrate on is running an efficient operation that ships fast and deals with any issues in as quick a manner as possible.”
Initially a lack of enthusiasm among the major brands about featuring on the fledgling site meant that it developed slowly. It was only when one major brand – VIP Electronic Cigarettes – signed up that others followed and the business gained momentum. Within six months of their listing on the site, all the other major brands had joined them.
“The site became so popular in such a short space of time that cash flow was a huge issue until we brought in a full-time accountant,” Culverhouse revealed. The two discovered that they’d actually played cricket against each other in 1997.
“Some months we would grow up to 40 per cent meaning that any money we had banked needed to be invested straight away in new stock. For this reason I wasn’t even able to take a salary until the company was around 18 months old.”
Culverhouse has no concerns about founding a business in a sector that is still highly controversial. “Many, many organisations have huge vested interests in disproving e-cigs and trying to make them look bad for you, but we’re approaching ten years since the e-cigarette was first invented and still no genuine evidence of harm has been found,” he said.
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“It’s also important to note that non-smokers don’t ‘vape’, so the only thing we should be asking ourselves is, how harmful are e-cigarettes versus traditional cigarettes?
“We believe that we are offering a product that is significantly safer than traditional cigarettes and every bit of bad press affects sales across the industry, and almost certainly has a negative effect on the health of those who believe it.”
The Electric Tobacconist outgrew its parent company’s office and, rather surprisingly, it’s now based in a stately home in Hertfordshire. “The landlord was not using our floor of the building at all, so he said we could just pay for what we were using. This was a great help to us as we’ve taken over nearly the whole floor now.”
The company recently launched in the US where growth in e-cigarettes and ‘vaping’ is also growing fast, but where government is also struggling to regulate what is regarded by some campaigners as a threat to public health and by others as a relatively safe alternative so smoking.
It’s also worth noting that a number of conventional cigarette manufacturers such as R J Reynolds have also entered the market and e-cigarette sales are set to set to be worth up to $6bn globally, according to Euromonitor. So the Electric Tobacconist has entered a growing market – and, as it’s often said, a bit of controversy can be good for business.