In the global e-cigarette value chain, the wholesale price of puff 46k is influenced significantly by manufacturing capacity, compliance certification and local regulations. Let’s consider Shenzhen as an example. In 2023, the price of producing one puff 46k by a leading contract manufacturer was approximately $2.8 (including e-liquid, battery and casing). Manufacturers with a monthly production volume of over 500,000 units would be in a position to reduce the factory price to $3.5 per unit through economies of scale, which was 15%-20% less than small and medium factories. TradeKey information indicates the minimum order quantity (MOQ) whole sale of puff 46k by authorized suppliers on Alibaba International Station is mainly 1,000 pieces, and the unit price ranges between 3.8 and 4.2 US dollars. But through direct negotiation at offline fairs (such as the IECIE Shenzhen E-Cigarette Exhibition), a 3% refund or 30-day payment support can be attained. For example, in 2022, a certain North American distributor purchased 100,000 puff 46k at an exhibition. The total expense was reduced by 12% and the net profit margin was increased to 28%.
On the basis of demand side market analysis, the US FDA PMTA compliance requirements have raised the cost of access of puff 46k. The charge for certifying a compliant product is approximately 500,000 US dollars per model, and therefore small and medium-scale wholesalers opt for non-compliant markets in Southeast Asia or the Middle East. Statista indicates that within the disposable puff 46k products dominating 37% of the worldwide e-cigarette wholesale market in 2023, in the European market, due to the TPD regulation on the quantity of e-liquid (≤2mL), the terminal selling price has to pay for a nicotine tax of 0.06 euros per cigarette. Dubai Free Trade Zone suppliers can reduce the wholesale price with tax to $3.2 per piece through the zero-tariff policy, 19% lower than that of the EU channel.
For supply chain efficiency, the logistics cost of puff 46k is 8%-12% of the wholesale price. Take sea shipping from Shekou Port in Shenzhen to the Port of Los Angeles as an example. The freight in a 40-foot container (loading capacity approximately 200,000 pieces) is 4,800 US dollars and logistics cycle is 21 days. If the line China-Europe Railway Express (Yiwu – Hamburg) is taken then it can be shortened to 14 days but freight will be increased by 25%. There are a few cross-border B2B websites (e.g., Global Sources) having “LCL” facilities in which orders of small and medium buyers are combined to full container carriage and reduce per-piece logstics cost by half to $0.12 from $0.18. Apart from this, in 2023 AliExpress started a “Brand Flash Purchase” promotion for puff 46k. On buying more than 100,000 units, one receives a commission decrease of 6% in the platform. With VAT refund, the overall expense is reduced by 9.7%.
Innovation in technology also has an effect on procurement plans. The lifespan of the puff 46k atomizer with ceramic core technology is extended to 800 holes (30% greater than that of the regular cotton core), but the production expense increases by $0.5 per unit. According to data from consumer research firm Euromonitor, in 2022 the repurchase rate of ceramic core products in Europe and the US was more than 65%, while the cotton core version had the return risk due to an oil leakage of up to 5%. For instance, the British wholesaler VapeClub increased its customer retention rate from 58% to 73% and the volume of purchases per year by 41% by switching to the ceramic core puff 46k.
At the risk control level, the rate of turnover of puff 46k needs to be controlled within 60 days to avoid losses from overstocking. Take the Malaysian market as an example. In 2023, due to the ban on flavors (flavor prohibition on non-tobacco), the mint flavor stock was overstocked by over 2 million units. Wholesalers were forced to dispose of their stock at $2.1 per unit (35% less than the cost price). On the other hand, in Canada, the puff 46k variant with THC has seen its wholesale price rise to $7.5 per vial due to legalization policies, with a margin of over 40%. But it has to be Health Canada’s CTLS (Compliance Tracking Authorization System) approved, and it takes up to 90 days to test.