Is Exporting a Viable Option for My Vapor Business?

If there is anything worse than heavy-handed government regulation of the vapor industry and its products – perhaps it is the constant uncertainty and back-and-forth that has characterized government intervention in our industry over the past several years. Flavors are banned nation-wide – wait, no they aren’t. Flavors are banned here, but not there. You are no longer allowed to ship vapor products unless you register under the PACT Act – actually, we are no longer accepting PACT Act registrations… This has been the constant uncertainty plaguing the vapor industry for at least the past five years, and it is indeed frustrating.

This uncertainty and inability of vapor brands to organize a consistent business model and outlook has many in the industry wondering: Is exporting a viable option for my vapor business? The short answer is yes, absolutely. The longer answer, however, will be highly dependent on what markets you intend to export to, and how the various costs associated with exporting to a particular country and operating in that country impact profitability. Certainly, some markets are vapor-friendly; facilitating market entry and operations for a product that many countries beyond the United States have begun to acknowledge as a preferable alternative to traditional tobacco products – including the value of vapor products as an effective cessation tool.

Exporting entails new costs, of course, and all such costs must be factored into a decision to undertake export operations. In addition, most countries require a market authorization process of some type to validate the safety of new products – that said, for anyone who has attempted to navigate the U.S. Food and Drug Administration’s Premarket Tobacco Product Authorization (PMTA) process, many foreign markets take a much more straight-forward and transparent market authorization process that is miles more predictable.

Leading factors that weigh on any business’ decision to enter a foreign market will include ease of market access, costs of market entry, and the size and outlook of the foreign market, among other considerations. Any vapor brand considering exporting should begin with a comprehensive export plan – this is a bit like an internal research document where you can begin compiling all of the factors listed above and more, to enable your business to weigh the benefits and feasibility of entering a particular foreign market. Such an export plan will begin with the basics – what is the market’s regulatory approach to vapor products; how do I gain access to the market?... and so on. Consider the export plan a construction project – once the basics are filled-in, move on to more detailed aspects, such as whether your company will work with an in-country distributor or set up your own shop within the export market.

The primary goal of the export plan is to answer one overarching question before diving-in: Is this foreign market worth my effort? If you arrive at the answer to that question, you likely have a successful export plan. And where you have arrived at this answer, the export plan then becomes your business’ blueprint for establishing operations and exporting to this new market.

Thinking about exporting? Have questions? We are determined to help you. Contact us today.

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Have questions? We are determined to help you. We listen carefully to clients to ensure our understanding of the legal issues at hand, their factual context, and any limitations that might impact a chosen strategy. Feel free to connect with us using the contact form at the bottom of the Home page or send us an email at contact@clarkespositolaw.com.