a general ? about cigar pricing

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marcsheldon

CP's official Architect
Joined
Jun 14, 2004
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me and a buddy of mine have been kicking around the idea of starting a smoke shop forever now. its just a fun topic to talk about while smoking a cigar that more than likely will never happen, but i digress...

anyway, my question is simple; what is the average markup on a box of cigars? i know thats a broad question becase prices for the same cigar are across the board. so lets get specific to make it easy. how about a box of pam '64 torps? padrons msrp is $300 (which is what my local shop sells them for) with an additional 10% off for buying the whole box. so he sells them to me for $270, but what is his profit? does anyone have a clue, or even a ballpark guess as to what his wholesale price was?

what amazes me is that the price difference between shops online vs actual storefronts. i was looking for a box la aurora preferidos and i found nearly a $200 difference between the two. which tells me the storefront who sells for $200 more (who btw cant keep them in stock) than the online guy is making a freakn' killing.

im assuming, for the most part, the profit is a general %. just like any other retail buisiness. but whats that magic % number....10%, 25% 50%?
 
It actually varies from one manufacturer to another. Each manufacturer has their recommended percent markup. Many are keystone (i.e., 100% mark-up) (e.g., Altadis Products). Others are slightly less (e.g., General Cigar products, AF products). At the RTDA, the big buzz for the retailers was keystone and keystone plus.

It also varies according to the retailer. The retailer might mark up a product from general as if it were keystone, wanting to make the same % profit on it as on other cigars.

Hope this helps. I actually had the opportunity to go to the RTDA for a local tobacconist last year. Very interesting from the consumer standpoint. Learned a lot about the business in the 3 1/2 short days.
 
The brick and mortar stores cannot compare to internet sites. There is much less overhead to the internet sales - the internet site doesn't have to have an attractive place for smokers to look at their wares.

Brick and Mortar have to make an attractive presentation for their customers, or they won't come. One of the reasons I like to purchase from my local shop is the atmosphere of the shop. It's a welcome place to go and have a pleasant smoke - nice comfy chairs, TV's, poker, etc. It may cost me an extra couple of dollars, but I want to make sure my local shop stays in business.

There was a shop very close to my house. I'm sorry he went out of business. It was nice when I could just pop over there for a smoke and a cup of coffee and great conversations with knowledgeable BOTL's.

Not sure about the answer to your question, Marc - I've never asked....

IMHO - you get what you pay for....
 
marcsheldon said:
what amazes me is that the price difference between shops online vs actual storefronts. i was looking for a box la aurora preferidos and i found nearly a $200 difference between the two. which tells me the storefront who sells for $200 more (who btw cant keep them in stock) than the online guy is making a freakn' killing.

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Yeah, but try to find Opus, Anejos, Padron Anniversarios, etc. online for retail or slightly above - not gonna happen. At least I haven't seen it. ???

That's why I buy boxes of things that aren't difficult to find online and save my single stick and small purchases for my B&M stores.
 
mrjinglesusa said:
marcsheldon said:
what amazes me is that the price difference between shops online vs actual storefronts.  i was looking for a box la aurora preferidos and i found nearly a $200 difference between the two.  which tells me the storefront who sells for $200 more (who btw cant keep them in stock) than the online guy is making a freakn' killing.

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Yeah, but try to find Opus, Anejos, Padron Anniversarios, etc. online for retail or slightly above - not gonna happen. At least I haven't seen it. ???

That's why I buy boxes of things that aren't difficult to find online and save my single stick and small purchases for my B&M stores.
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It's not THAT hard to find those on-line. One of the on-line retailers had a special on Opus X Perfecxion #5's recently, I picked up ten. Lots of local shops sell via the internet that carry those cigars so you just have foster a business relationship with them and they'll come to YOU when they have them in stock. ;)

And yes MrJingles it happens all the time, I've never paid more than MSRP from on-line vendors for Opux X, Padron 1926, PAM, etc.
 
Taxes stifle internet cigar businesses in many states.

Also I sell everything out of my storefront for 10-35% more than I do on-line because I gotta pay rent for my storefront. Much more costly to sell in person rather than on-line.



Ian Hannah
Billboardtobacco.com
 
ggiese said:
The brick and mortar stores cannot compare to internet sites. There is much less overhead to the internet sales - the internet site doesn't have to have an attractive place for smokers to look at their wares.

Brick and Mortar have to make an attractive presentation for their customers, or they won't come. One of the reasons I like to purchase from my local shop is the atmosphere of the shop. It's a welcome place to go and have a pleasant smoke - nice comfy chairs, TV's, poker, etc. It may cost me an extra couple of dollars, but I want to make sure my local shop stays in business.

,IMHO - you get what you pay for....
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I find the same here in Milwaukee, smokes are more expensive, but it is nice to have a place to go and talk cigars, have a beer and just relax.
 
Most B&M will take the MSRP set by the manufacturer then add the state tobacco tax, if any.
 
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