Smoke Cartel Inc. (OTC: SMKC) started with the idea that a new wave of innovative products in an emerging industry could be very promising. The philosophy behind it was that with the growth of this industry and the increasing number of cannabis users (in the US), the demand for new experiences in the form of accessories and products would increase. Seven years later, Smoke Cartel can proudly say their business model has proven to be successful, while now being noticed as an established brand with an unique and wide variety of high quality products.
Customer satisfaction proves the power of Smoke Cartel
The reason Smoke Cartel survived in this competitive, growing industry is because it focused on the fundamentals. The founders have made the difference by not wanting to go crazy with ideas or telling themselves to be different. The essence was to offer excellent products, fast shipping, friendly customer service and extensive product information. Within this process, the focus was on the supply chain, innovative products and in particular, customer loyalty. The classic method “customer is always right” is still very functional and has paid off. The result is hundred thousands of satisfied customers worldwide who are familiar with the high-service of Smoke Cartel. With original and funny marketing, Smoke Cartel makes an indelible impression on new and existing customers. By remaining consistent and innovative, the company is now a market leader in smoking accessories.
Quality over quantity
Who’s looking for a company in which passion and craftmanship are decisive ingredients, Smoke Cartel is the place to be. The goal was not to become rich quickly, as the founders were convinced that this would affect the quality of their production too much, plus they didn’t want to underestimate e-commerce. By gaining experience within the sector and being patient, Smoke Cartel was able to establish partnerships with the best suppliers and manufacturers in order to guarantee high quality. Every effort is made to provide the customers with a perfect service. From iteration on the simple return process, to the distribution of the supply chain to enable faster delivery and a larger selection of products.
B2C over B2B is an informed choice
Later Smoke Cartel took over a B2B book and explored the possibilities of vertical integration by producing and distributing its own brands. It turned out to be the perfect exploration to expand the revenue model. A high demand from retail customers was noticed and so the Smoke Cartel was able to promote and distribute own brands to thousands of brick and mortar shops on the national and international market. Margins in many product segments improved and experience was gained on the distribution model of B2B in the industry. Analyses showed that it makes more strategic sense for Smoke Cartel to focus on the retail sector. The reason is that margins in B2B are not large and require a substantial capital investment. The various B2C efforts show more upside and growth potential after research. This shows how consciously the company operates and that it likes to make well-considered choices.
More customers, more demand, more success
After two very challenging years – in the second half of 2019 – Smoke Cartel made a strategic decision about the company’s growth and return to profitability. They decided to apply the leverage for growth and operational efficiency. For six years, Smoke Cartel has deliberately chosen to invest heavily in achieving a large customer base. This was mainly due to direct sales to end users and the possession of an extremely customer-friendly website that met all customer needs. By having software and tools in hand, a lot of information has been collected about the behavior of the customers. From there, an internal infrastructure was built with which the inventory can be monitored and can easily link customers to fulfilment.
The big question is how Smoke Cartel changed the business model. First of all, a start has been made with the development of a smoke shop market model. The way products were offered and delivered had to change. Registering distributors to serve as dropshipping partners was the first step. The core philosophy of offering only the highest end products under one of the branded product lines changed. As a result, Smoke Cartel can now offer products at any price point, in any size/color and can quickly and efficiently supplement its offer with dropshipping partners. The customer now has the possibility to put together their own product.
Dropshippers experienced an increase in their own business models, which improved efficiency and didn’t skew supply and demand. Smoke Cartel then came up with the idea of linking the shipping tools to the fulfillment service centers of the dropshippers. This accelerated processes and allowed over 50 dropshippers to be added to their network. Smoke Cartel considers it important to continue to provide dropshifters with new processes and tools. Read the following example below:
“As the dropshipper business started to grow in 2020, we continued to expand the tool offerings to our partners. For our largest partners who use higher end back office ERP systems, we offer to integrate the order processing and fulfilment service directly into their back office systems. This allows for more efficient inventory tracking and reporting on the website, as well as more efficient accounting and billing for completed orders delivered. We have been helping these partners move from manual data entry to fully integrated system tools”.Smoke Cartel Inc. – July 17, 2020. During an exclusive interview with PSN.
Smoke Cartel has a successful year thanks to COVID-19
As of March 2020, Smoke Cartel reports that the number of orders has exploded. What happened? Because of COVID-19, millions of people have to stay at home (many of whom have also lost their jobs). Since then the demand for home entertainment and stress-reducing drugs has increased enormously. In addition, the local stone and mortar stores had to close their doors. As a result, people purchasing smoking accessories online. To this day, Smoke Cartel sells up to 3 times as much as before the world quarantined. The market model that was launched earlier in 2019 seems to have launched exactly on time, so that the increasing demand of the customers can be answered.
Smoke Cartel’s pipeline in four steps
1. Better service for existing customers through different social media platforms and stay up to date on SEO metrics to make sure new customers find the website during their online searches.
2. Manage existing relationships with drop shipping partners through constant communication to address issues. At the same time, opportunities are offered to improve their systems and make them more efficient in processing orders.
3. Identifying new dropshipping partners to ensure that the mix of product offerings meets customer requirements with the most useful and entertaining products available.
4. Continue the search of innovative ways to make the operations of Smoke Cartel and those of partners more efficient and streamlined, so that the efficiency gains that have been made can be maintained.
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