Value discussion- Production sticks in fancy packaging

[insight]

For discussion of trading/passing value

Recently the question was raised of how we should value a production cigar in fancy packaging for passing purposes. This has happened many times but for the sake of simplicity I am just referencing the most recent discussion, beginning Here

The summary is in the past the precedent has been set that normal smokes, such as GoF pyramids from the humi or a production opus in the CF22 set, have been given additional trading weight in passes as a result of their packaging. It seems a lot of people disagree with this practice and it might be time to reevaluate that precedent. This is not a question on judgment calls regarding whether a cigar is "good" or not, but rather does the method of transmission (coming in the cf22 set in a coffin vs. loose in a standard box) really add 3-400% to the value of the cigar? Some secondary questions are:
a) If it does add value coming from a limited production presentation release, even if it is the same blend as a standard release, should that value be weighted? For example it is hard to make the case that an Opus #2 from the CF22 is of equal value and rarity to a non-production size from the same set, but that doesn't mean it has the same raw value as the normal release #2.

b) Are we properly accounting for humidor tax when discussing these trades? In the GoF pyramid example should I bear the cost of the humidor if I don't have a chance of having it (same thing with a Padron Millennium as another example)? In other words, are you taking the raw price and dividing by the number of sticks or taking the estimated value of the humi out of the equation before determining the per stick value?

c) Where do we draw the line with calling it fancy packaging for a normal cigar? Does a cigar that has simply been aged before release count the same a comparably aged regular cigar? What about specially select product? For example is a monte 4 reserva the same as a comparably aged production monte 4? What about a humidor release Monte A or a festival release production size? When a cigar like the Don Arturo Anniverxario comes out and is an identical blend to the AF13 does it consequently bring the value of the AF13 down?

Discuss.

 

[bfisher88]

I am going to start creating fancy packaging for my normal sticks to increase value, imo. Maybe some foil accents, ribbons and whatnot.

 

[Bsneed51]

Thanks for starting this topic Phil. I was planning on doing the same, just hadn’t gotten around to it yet.

 

[Jonesy]

I don't think there is any real debate that that cigar is priced like a box of rape. The point is that is the price. I am totally ok with adopting the line that humidor pricing and packaging does not raise the value of a cigar but if thats the case than the value of the rarer sticks in that set also almost doubles. You better be ready to ship a $70 stick for a chili pepper or a Rising X.

This echoes my thoughts on adding a CFCF Fun box stick.....who's gonna cry rape when someone tries getting a BBMFM or the sticks Phil outlined above with a $40 stick? What if you're putting a Chili Pepper from one of the 2007 boxes in there that breaks down to ~$34 a stick? Just because it's 3 years old doesn't mean you can add rarity to it to bring it up to value of one of the boxes that went for $900.

Good discussion that I'm sure everyone will have differing opinions on. I'm like Phil though, It would drive me crazy when someone would do this in one of my passes

Case in point, here are two trades from one person in one of my passes:
Don Carlos Edicion de Aniversario double robusto / Edicion De Silvio Salomon Maduro (coffin)
CF 10th anniversary / Custom Rolled Pepin

 

[Bsneed51]

Here is my take using my limited knowledge, and factoring in my anal accountant math. I think it’s perfectly reasonable to adjust MSP of the CFCF set based upon the individual value/rarity of the cigars in it. A quick search pulled up the 2007 set, so I’m using that in my example. You can break down the math using any of the sets however.

CFCF 22 Set - $750

Set contains:
2 Opus RdCs. MSRP $14 each
2 Opus Perfexion X MSRP $13 each
2 Opus Perfexion No. 2 MSRP $15 each
Total MSRP of those 6 sticks: $84

The remaining 16 sticks have a total value of $666 ($750-$84)
That $666 divided by the remaining 16 sticks gives you an average MSRP of $41.60.

I would have no problem with someone setting the MSRP of the remaining 16 cigars at a value above the $34 ($750/22) MSRP that we use now for all of those cigars universally. I feel like any of the Opus I can get at my B&M the 3-4 times a year they are released shouldn’t carry extra value because they are filler in the CFCF set. I can’t just walk in anywhere and buy a chili pepper or an LBMF so they should carry a higher MSRP. The way we are currently doing this in passes, is allowing essentially a $14 cigar to take up to a $34 cigar because of an extra band. Then the pass host is essentially stuck with that cigar because NO ONE is going to then trade for a $14 MSRP cigar for something that has to be valued at $34+.

 

[Jonesy]

I think doing that is an excellent idea Brent. This way you take the regular production stuff out of the way and the HTF sticks are properly priced.

 

[BlindedByScience]

Great question, Phil.....

Here is my take using my limited knowledge, and factoring in my anal accountant math. I think it's perfectly reasonable to adjust MSP of the CFCF set based upon the individual value/rarity of the cigars in it. A quick search pulled up the 2007 set, so I'm using that in my example. You can break down the math using any of the sets however.

CFCF 22 Set - $750

Set contains:
2 Opus RdCs. MSRP $14 each
2 Opus Perfexion X MSRP $13 each
2 Opus Perfexion No. 2 MSRP $15 each
Total MSRP of those 6 sticks: $84

The remaining 16 sticks have a total value of $666 ($750-$84)
That $666 divided by the remaining 16 sticks gives you an average MSRP of $41.60.

I would have no problem with someone setting the MSRP of the remaining 16 cigars at a value above the $34 ($750/22) MSRP that we use now for all of those cigars universally. I feel like any of the Opus I can get at my B&M the 3-4 times a year they are released shouldn't carry extra value because they are filler in the CFCF set. I can't just walk in anywhere and buy a chili pepper or an LBMF so they should carry a higher MSRP. The way we are currently doing this in passes, is allowing essentially a $14 cigar to take up to a $34 cigar because of an extra band. Then the pass host is essentially stuck with that cigar because NO ONE is going to then trade for a $14 MSRP cigar for something that has to be valued at $34+.

This makes perfect sense to me and I agree 100%. I can't justify a premium on a smoke I can buy 3-4 times a year just because it comes in a coffin. Sure, the coffin's are cool and a guy may or may not be willing to pay a premium for them....but I don't and I don't think folks should expect to.

IMHO, it's a little different in the case of cigars like Milleniums. In that case, it's impossible to buy the smokes without the "shrine" they come in. For that example, it seems perfectly reasonable to me to take the total cost and divide by the number of smokes in the humidor, since they are all identical.

JMHO - B.B.S.

 

[BlindedByScience]

More opinions....worth what you paid for them....:laugh:

c) Where do we draw the line with calling it fancy packaging for a normal cigar? Does a cigar that has simply been aged before release count the same a comparably aged regular cigar?

I think scarcity and availability answers that. For example, a manufacturer ships cigar "X" as part of their regular line for $10.00. They later release a small number of a "specially aged" version of the same smoke with a special band for $20.00. In this case, even if the regular line smoke is aged just as much as the specially aged smoke, higher initial price and limited availability will still indicate a premium on the specially aged smoke.

For example is a monte 4 reserva the same as a comparably aged production monte 4? What about a humidor release Monte A or a festival release production size?

Same answer as above. Higher initial price and availability will likely dictate a higher value on the Reserva.

When a cigar like the Don Arturo Anniverxario comes out and is an identical blend to the AF13 does it consequently bring the value of the AF13 down?

No, the AF13 will still command a higher price, based on the same criteria as above; higher initial price and limited availability.

....now, just becasue a cigar may be worth more to some, it may not be to others. For example, I wouldn't pay extra for a "specially aged" version of anything I can buy normally. Conversely, a Reserva that I was particularly fond of may be worth some extra jack if it was one I was very interested in. Haven't found one of those yet, though.

JMHO^2 - B.B.S.

 

[cabaiguan juan]

While I don't disagree with the logic of the previous posts, is it fair to just let the value paid-msrp in these cases, to just evaporate simply because the cigars are obtainable elsewhere in a not-so-similar method/way? Isn't that like basing the price of a cigar off of the lowest internet price rather then the B&M price?

 

[Yeahthatsme]

While I don't disagree with the logic of the previous posts, is it fair to just let the value paid-msrp in these cases, to just evaporate simply because the cigars are obtainable elsewhere in a not-so-similar method/way? Isn't that like basing the price of a cigar off of the lowest internet price rather then the B&M price?

The method of acquiring the cigars has to come into account, as well. If you paid $40 for a raffle ticket to split a CFCF box, then you're essentially gambling on getting one of the rarer sticks. While it sucks to be stuck with one of the regular release, you really can't expect a pass host/the rest of the participants to saddle your loss.

 

[tomthirtysix]

While I don't disagree with the logic of the previous posts, is it fair to just let the value paid-msrp in these cases, to just evaporate simply because the cigars are obtainable elsewhere in a not-so-similar method/way? Isn't that like basing the price of a cigar off of the lowest internet price rather then the B&M price?

Isn't that closer to what is actually done? When determining the value of cigars for passes, it's common to look at multiple online retailers, and take the average of them. If we used the B&M price for passing value, then you have to account for taxes, as well as markup in many stores.

 

[Not A Nice Person]

Plus it's mostly straight MSRP + rarity (as a separate, non-dollar amount quality) on exotic sticks in passes anyway, since with all the gouging that goes on out there, people would be wanting $30 trade value on xXx's and Sharks. :laugh:

I like Brent's take on the CF22---market value or market value+ for the regular sticks, divvy the rest up equally among the rarities. But that brings up the question of which is which to begin with, what with X Sharks, El Scorpions, lanceros, and BBMFs showing up in other packaging on a semi-regular basis now.

Which price is which? $40 for a BBMF coffin based on CF22 split, or the $65 it goes for as a tubo?

~Boar

 

[punk_lawyer]

While I don't disagree with the logic of the previous posts, is it fair to just let the value paid-msrp in these cases, to just evaporate simply because the cigars are obtainable elsewhere in a not-so-similar method/way? Isn't that like basing the price of a cigar off of the lowest internet price rather then the B&M price?

There is such a thing as a 'bad deal' when approaching some of these cigars. I think we would have a hard time blaming the manufacturers for repackaging and reissuing available sticks. Let's face it, we buy them in fancy tubes, painted tins and cool looking boxes...same cigar, different presentation.

When we are looking at trading cigars in a pass then the pass host should have broad discretion as to whether to consider the pretty packaging or not. Let's face it, we cannot smoke tubes, tins or cool looking boxes. The value comes from the tobacco because the tobacco is being traded. Does that evaporate the money paid for the tube, tin or pretty box? Again, in my view there is such a thing as a 'bad deal'.

 

[mmburtch]

I feel it's conditional. For example, what pass host is going to allow a trade using a Ghurka at MSRP.

 

[whopper]

Here is my take using my limited knowledge, and factoring in my anal accountant math. I think it’s perfectly reasonable to adjust MSP of the CFCF set based upon the individual value/rarity of the cigars in it. A quick search pulled up the 2007 set, so I’m using that in my example. You can break down the math using any of the sets however.

CFCF 22 Set - $750

Set contains:
2 Opus RdCs. MSRP $14 each
2 Opus Perfexion X MSRP $13 each
2 Opus Perfexion No. 2 MSRP $15 each
Total MSRP of those 6 sticks: $84

The remaining 16 sticks have a total value of $666 ($750-$84)
That $666 divided by the remaining 16 sticks gives you an average MSRP of $41.60.

I would have no problem with someone setting the MSRP of the remaining 16 cigars at a value above the $34 ($750/22) MSRP that we use now for all of those cigars universally. I feel like any of the Opus I can get at my B&M the 3-4 times a year they are released shouldn’t carry extra value because they are filler in the CFCF set. I can’t just walk in anywhere and buy a chili pepper or an LBMF so they should carry a higher MSRP. The way we are currently doing this in passes, is allowing essentially a $14 cigar to take up to a $34 cigar because of an extra band.

I agree with Brent's assessment as well.

 

[Breedy]

Plus it's mostly straight MSRP + rarity (as a separate, non-dollar amount quality) on exotic sticks in passes anyway, since with all the gouging that goes on out there, people would be wanting $30 trade value on xXx's and Sharks. :laugh:

I like Brent's take on the CF22---market value or market value+ for the regular sticks, divvy the rest up equally among the rarities. But that brings up the question of which is which to begin with, what with X Sharks, El Scorpions, lanceros, and BBMFs showing up in other packaging on a semi-regular basis now.

Which price is which? $40 for a BBMF coffin based on CF22 split, or the $65 it goes for as a tubo?

~Boar

Excellent question. Off the bat the Opus X Sharks are now, to my understanding, a regular release cigar and therefor should be excluded from the discussion. Most of the others, usually are in the 30-40 dollars price range depending on where they came from. An example would be the Karate Sampler that happen over at CF 3-4 times a year. IIRC some of the past line ups have been a BBMF, El Escorpion and a Lancero for approx 135(ish). The samplers change and prices vary, but they are usually in the range of 30-45 dollars per cigar.

You can also purchase some of the various sizes in Fuente Aged Selections offered seasonally. Again, those range in price from around 140-160 dollars if memory serves. Those usually come 4 cigars to a pack, so again you are at 35-40 dollars per cigar.

However, lets cut to the case. CFCF's lotteries are a gamble, like Joe said. Everyone is hoping for the BBMF maduro or something in that category, but you get what you get. To a person, would anyone actually CHOOSE a RdC or #2 over a Lancero, BBMF, LBMF, etc......Resoundingly I believe the answer is NO! That being said, can anyone actually argue the value of the production sticks should be equal to that of "odd" or "special" vitolas. If you walked into your local B&M and they had #2's and RdC sitting next to a BBMF or Princess Diana and they all were the same price, which would you choose?

 

[insight]

The shark is an interesting discussion point. This is a cigar that was always a 'relatively rare' opus in that it wasn't a production size. People certainly paid a ton for them in years past and they were rare. I am not convinced that older sharks are now worth msrp+age frankly. That isn't the way other re-releases of previous limited production stuff has been treated. Old 858 Rosados and OR 858 SG didn't drop down to market value for the recent releases when they came out. The same thing is true of the 2nd run Cuban regionals. A box of the original run ED 109 would always run more than the 2nd run, even if it is 'the same cigar'. So what happens if Fuente releases the BBMF as production for 15 a stick next month?

 

[Yeahthatsme]

I think the CFCF Sharks still carry their value simply because, if nothing else, they'd be "pre release" or perhaps "pre production" cigars.

 

[Bsneed51]

So what happens if Fuente releases the BBMF as production for 15 a stick next month?

After I was done jizzing in my pants, I would buy the whole box. :laugh:

 

[Breedy]

The shark is an interesting discussion point. This is a cigar that was always a 'relatively rare' opus in that it wasn't a production size. People certainly paid a ton for them in years past and they were rare. I am not convinced that older sharks are now worth msrp+age frankly. That isn't the way other re-releases of previous limited production stuff has been treated. Old 858 Rosados and OR 858 SG didn't drop down to market value for the recent releases when they came out. The same thing is true of the 2nd run Cuban regionals. A box of the original run ED 109 would always run more than the 2nd run, even if it is 'the same cigar'. So what happens if Fuente releases the BBMF as production for 15 a stick next month?

There are a couple of really good points in there. History of CFCF's

1st. The value gets screwed because the Opus Shark or the BBMF (if released at $15) were initially NOT production cigars. They were produced in limited amounts and only a few way to obtain them, so there for they should care more of a value. The RdC and the #2's and the rest were production cigars. So one would assume no extra value should be add to them, right? If you look back to the 2004 CFCF the vast majority of the cigars were production sticks (it even included a #4 and #5 @ $35.00).

2nd. CFCF have risen in price and the selection of cigars varies. The 2009 for example is listed as having 5 "normal production cigars", but with the Opus Sharks and Love Affairs being a regular release it now has 10. So what value you do you use? IMHO, just from looking at the line-ups 2008 or 2007 would have been the best years, but cared a price tag of $950

3rd. The price of these cigars centers around collection value and the perceived notion that the originals were better cigars. Were they? Hell if I know. Everyone one loves grandma's cookin', but statistically speaking someone's grandma had to be a shitty cook. So are the OR really that good or were they good cigars that were HTF when released and now enjoy a near mythical stature with the extra oomph added to them because we as cigars smoker assign them ourselves

So, where does that leave us? Is the extra band really the deciding factor? Is a Opus #5 from a 2004 CFCF an acceptable put for a 2008 BBMF? Would an normal release of a 2004 Opus Perfecxion X be an acceptable put for a BBMF from a Karate Sampler? How much value do you add for age, would an Opus from 2007 be an acceptable trade in 2011 for Opus Cyborg?