offers a wide concentration of nicotine from 0 mg per electronic cigarette to 16 mg. Electronic cigarettes typically do not have many of the other chemicals that traditional cigarettes do. They also don’t generate ash like cigarettes do. The components of an electronic cigarette include a cartridge


with a propylene-glycol-moistened material, an electronic air- flow sensor, a heating element (the atomizer that vaporizes the liquid to be inhaled) and a rechargeable lithium-ion battery. Other components include a timed cutoff switch to prevent overheating, an LED to signal activation of the device and an external charger, to recharge the battery, says Kevin. It works like this: “When a user draws air through the device,


the air flow is detected by a sensor, which activates a heating element. The solution is then vaporized and it is this vapor that is inhaled by the user,” Kevin says.


Product options Products are sold both as starter kits and as individual components. Replacement cartridges are available for use with non-disposable personal vaporizers. Vapor Corp. also markets USB, home and car charging devices, as well as a variety of other accessories. Fifty-One starter kits retail between


$99-$150, with recently introduced leather and wooden gift boxes selling for as high as $250. Starter kits include everything—even a rechargeable battery—a customer needs to enjoy an electronic cigarette, says Adam. “They can continue to use it, as long as they continue to charge it,” he says. For those wanting to spend a little less, before making the commitment to the rechargeable kit, the disposable Krave brand is offered. “In general, Krave is meant to be a stepping-stone to Fifty-One,” says Adam. Disposables range in price from $9.95-$19.95. With a 500% mark-up, retailers reap the rewards of both first


time and repeat purchases. Approximately 20-30% of sales are customers returning for replacement cartridges.


Regulating e-cigarettes When selling cigarettes of any kind, that may or may not contain nicotine, there is going to be controversy. Recently a U.S. federal appeals court found that as long as electronic cigarettes aren’t marketed as a way to treat or cure a disease, i.e. as smoking cessation aids, the U.S. Food and Drug Administration lacks the authority to regulate these products under the Federal Food, Drug, and Cosmetic Act (“FDCA”). According to the ruling, e-cigarettes containing nicotine will be regulated as tobacco products.


“We are extremely pleased with this court ruling,” says Kevin. “It finally resolves any lingering doubt which has chal- lenged the electronic cigarette industry for quite some time now.


With today’s legal victory, we are best positioned among our competitors to quickly capture an even


greater market share for our products,” Kevin adds. "Vapor Corp. has always been proactive in taking many steps to ensure the responsible marketing or our


eletronic cigarettes," Kevin says. It is worth noting: Fifty-One is not marketed as a way to quit smoking, it is marketed as an alternative to smoking. “The products are not approved as smoking cessation devices, which means that they cannot be marketed with claims to help people stop smoking. The products are legally sold as recreational tobacco products; as the nicotine is derived from tobacco. Retailers selling the Fifty-One brand need to choose their


words carefully. “We tell them what they can and cannot say legally. You cannot sell the product by saying: ‘Quit smoking now,’” says Lawrence Markx, creative director.


Building on the brand Vapor Corp. isn’t the only one in the specialty retail arena selling electronic cigarettes. But Kevin will tell you: “We’re going to be the last ones standing.” Why? For starters, Kevin says, Fifty-One has a simple cartridge


replacement system. Quite literally all customers need to do is unscrew the old cartridge and replace it with the new one. Other brands require partial or complete disassembly of the device. Kevin points out that competitor brands often have sticky


SpecialtyRetail.com Winter 2011 n Specialty Retail Report 61


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