Are you budgeting for compliance in your vape business.

I have been involved in the vape business since 2007, and the world has changed dramatically during that time, the first products were cig-a-likes with little or no regulation, but were being pursued by the MHRA to obtain medical licenses. Since then the market has changed in some noticeable ways: huge market grown, diversion of technologies, explosion of flavours, many many new companies forming and now the race to get discount business. However as margins squeeze companies generally, but those with large portfolios of products are finding some of the hidden costs of compliance. The initial registration and notification fees are not the end of compliance expenditure but just the start, normally there are annual renewal fees to pay, these are on hold until April 2020, but then fees of £60/sku will be charged by the MHRA. Changes to branding also attract administration fees, or time if you do your compliance in house, if you have a large number of products these fees can quickly add up.

I have always advised people from notifying product in countries that they don’t sell in, but we still have customers wanting their products notifying in all free counties, but in my experience this is folly. Nothing is free, their might not be notification fees, but you have ana administrative burden to cover, sales data to notify and upload through the portal is just one example. Also several countries did not publish fees or announced no zero fees, only to change policy and increase fees or start charging them. When you withdraw products from a market because they have introduced fees, it takes time and comes with a cost. So my advice is always the same only notify in countries that you are either selling in or have plans to sell in.

But the biggest lesson is to build into your cost model the cost of compliance.