How will the Pact Act affect you

Posted on April 20 2021

How will the Pact Act affect you

How will the Pact Act shipping restrictions affect customers?

As the day approaches when the U.S. Postal Service and the major common carriers stop shipping vapor products, the vaping industry is working to develop solutions that will allow deliveries to continue, at least for many if not all products. VaporTech is working with a company that will make sure our shipments get to you.  Right now we are able to cover 80% to 90% of the US.  The only draw back to this new service for the customer is the cost of shipping.

Starting April 26th when you buy products from vaportechusa.com the low end shipping for a 1 pound package will be just under $17.  We will only be allowed to ship up to 10 pounds in each package and shipping cost will be $25 - $28.

Also vaportechusa.com free shipping will be changing from $50 to $150 minimum spend to get the free shipping option.  We are testing this price out so it may go down or it may go up depending on shipping cost.

It’s likely that some customers will soon be unable to legally get the open-system vaping products they want—at least for a time—and will need to stock up or make other plans to get products. There will probably be many smaller online retailers unable to survive the cataclysmic upheaval that lies just ahead.

Who will survive? Companies that have “the cash flow, or the reserves, to survive the next three or four months of total uncertainty,” says industry veteran Geoff Habicht. Companies that can’t face several weeks or months of disturbance to their income probably won’t make it.

Online retail and B2C shipping: a kernel of hope

The ban on Postal Service shipping, combined with the decision by the major private carriers to end vape product deliveries, poses a true existential crisis for online vaping retailers and manufacturers who ship business-to-customer (B2C). And for vapers in rural areas and cities without vape shops it could mean the end of easily available open-system products.

After the announcements from Fedex and UPS, many large online sellers tried to apply for exemptions that would allow them to continue shipping vaping products through the major carriers, but they were rebuffed. The big delivery services don’t want the potential headaches of dealing with ATF’s PACT Act enforcement.

However, there now appears to be a kernel of hope for vapers—at least for a fairly large number of vapers. A partnership between a private group buying company and a national residential shipping carrier known simply as X has begun building a vaping product delivery network that will serve residential customers in some areas, with more to follow. There are currently more questions than answers about which areas will be covered and which vape companies will be able to participate, but the folks at X seem dedicated to making it happen.

Shipping costs will be slightly higher, but not far from the cost of USPS delivery with adult signature collection. However, the considerable costs retailers will incur because of PACT Act and tax compliance, and rejigging all of their shipping processes, will probably be reflected in the prices we pay for products and shipping.

The goal is to cover as many customers as possible right away, then to continue growing the coverage area after launch.

“This is a very competitive market, so companies are going to try to meet customers’ needs without going bankrupt,” American Vaping Association president Gregory Conley told Vaping360. Minimum order sizes to receive free shipping will likely increase, according to Conley. And product selection may thin out as large retailers look for ways to streamline their operations.

The X delivery coverage area has not been made public yet, but according to one seller who intends to ship through X, it is likely to cover parts of more than a dozen states as of April 1. The coverage area at launch is expected to include at least sections of Florida, Texas, California, Nevada and Arizona. A spokesman for X declined to confirm specifics about delivery areas, but told Vaping360 that it would soon provide a list arranged by ZIP code (the coverage isn’t defined by state borders).

The process of deciding which areas to include is complicated, according to a retail vendor who didn’t want to be named. First, X and its partners analyzed the customer lists of potential retail clients, then began looking at laws and regulations in the most commonly shipped-to locations. The company then sought shipping partners willing to deliver vaping products.

Drivers will have to be trained on the federal requirements, and shippers will have to track custody of each package for PACT Act reporting. The goal is to cover as many customers as possible right away, then to continue growing the coverage area after launch.

Building such a network from scratch is a difficult process, and launching it under ATF scrutiny doesn’t leave room for many mistakes. If successful, X will continue expanding the coverage area, which will eventually serve more customers and allow more online sellers to participate. 

“We’ve told our customer service people they’re going to need their A-game for the next 90 days.”

The X delivery plan will, however, leave a lot of online sellers out—at least in the near term. The minimum number of packages X will schedule a pickup for is currently 500 (with a weight limit of 10 pounds each). That will exclude many small e-liquid manufacturers who ship directly to customers, at least for now (X says the minimum pickup number may drop as the operation is streamlined). Small shippers may be able to consolidate pickups with other local businesses, X suggests, and the company says it will look at each situation on a case-by-case basis, but it seems clear that some small vape companies will be left out.

So major online vape retailers who do considerable business in heavily populated areas may be the only winners—for now—with the X shipping service. But according to an employee at one of X’s partners, 3PL (third-party logistics) providers may offer a solution for some smaller companies. 3PLs typically offer a package of services that include warehousing, ordering and delivery, so the cost is higher for the manufacturer, but some of the headaches are handed off to the 3PL. However, we did not fully investigate this option.

Small manufacturers will have to pause their operations until shipping solutions present themselves, or try to make deals with large distributors to be sold in vape shops, or with larger online sellers to be offered on their retail sites. But distributors and large retailers may choose to keep their brand lists small, with PMTA enforcement looming and vape shops wary of getting stuck with unsellable merchandise.

“You’re already seeing smaller players begin to exit the market, because of shipping restrictions and PACT Act compliance, but also because of new FDA enforcement actions against manufacturers that didn’t apply for PMTAs,” says Conley. “At least in the short term, if you’re not shipping hundreds of products [a day], you’re either going to have to close your business or figure out a partnership with someone who does ship a lot of products.”

 

What now?

While it appears that some large online retailers have discovered a solution to the shipping problem, there are still a lot of questions about which areas will be covered for the first few months. At this moment, no one is able to say in exactly which areas customers will be able to receive home delivery of vaping products.

We will report that information when it becomes public, but until then vapers should consider taking precautions. There are alternatives to buying e-liquid and devices online. And while vape shops may be more expensive, and DIY requires more effort, all of these workarounds are better (and cheaper!) than going back to smoking.

Stock up on products

You’ve got a few weeks to buy online before PACT Act compliance and B2C shipping restrictions take effect. That gives you time to spend your savings (or credit) on vape products still available online. If you have favorite e-liquids that are only sold directly by the manufacturers, they may not be available after this window of time. Each day brings new announcements of impending closures.

If you need backup devices, pick sturdy and reliable ones. Check the vaping forums and ask fellow vapers which mods people trust. Buy two, along with an extra tank or atomizer.

Buy lots of extra coils if you can, especially if you use a tank that isn’t still being sold. As retailers and distributors find shipping solutions, they are likely to trim their selection, so replacement coils for discontinued atomizers may get hard to find. Consider buying a popular tank whose coils are sold most places.

 

If you are a fan of the Vapo Product Line (Vapo, Vapo Maxx, Vapo 1500) or If you love the new VaporTech Cube 3000 puff devices

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