Mikes Cigars loses Oliva.
 

I searched forum but if this was posted already please close.

Oliva pulled Mike's Cigars account after two warnings to sell the Oliva lines closer to msrp. The third strike came when Oliva Sr. was looking through a mikes catalog and saw an Oliva sampler at half msrp. So they pulled the $500,000.00 account.

I can respect them looking out for local b&m's not being run out of business by the internet giants.

Re: Mikes Cigars loses Oliva.
 

thats awesome. can i give them RG?

Re: Mikes Cigars loses Oliva.
 

Wow. They ain't playin' around.


How does something like that work? Does Oliva pull all the stock that Mike's has or just stop selling to them?

Re: Mikes Cigars loses Oliva.
 

Who is Mikes Cigars?

Re: Mikes Cigars loses Oliva.
 

Just stop selling to them. They can't pull stock that has already been paid for. As a retailer, you have to sign a contract saying you will not do this type thing or the account could be pulled. However, there are other distributors that you can get cigars from but it will cost a little bit more.

Re: Mikes Cigars loses Oliva.
 

Whom? Mike's Cigars or Oliva?

"THAT'S AWESOME" ????? Yeah, if you're a retailer.

If you could find smokes for close to 1/2 the MSRP wouldn't you think it's AWESOME?

Re: Mikes Cigars loses Oliva.
 

Really, If I can get my V's at 1/2 price then that's a good deal for me. I'm not all that concerned with the B&M's

www.mikescigars.com
Posted via Mobile Device

Re: Mikes Cigars loses Oliva.
 

That's very selfish of you.

I, for one, am glad this can happen because it helps protect my job.

Re: Mikes Cigars loses Oliva.
 

I do think that manufacturers have the right to protect their brand. If one place sells WAY cheap it devalues their line. Also, I'm sure there was a contractual price when Mike's started carrying the Oliva line.

Chalk this up as a win for B&Ms everywhere. I don't mind paying more for smokes; this is a luxury. I don't NEED cigars; I choose to smoke them.

Re: Mikes Cigars loses Oliva.
 

The B&Ms got two warnings and should have known better, but it’s a loss for the consumer

Re: Mikes Cigars loses Oliva.
 

I don't see anything close to half msrp on their site... :confused:

Re: Mikes Cigars loses Oliva.
 

This is really similar to how the golf industry operates. Some of the big OEMs, like Ping, are notorious for using "secret shoppers" to check for accounts selling below MSRP.

Re: Mikes Cigars loses Oliva.
 

I think he is talking about this..

https://www.mikescigars.com/ProductD...-SAMPLER/29260

Re: Mikes Cigars loses Oliva.
 

Now that makes more sense.

Re: Mikes Cigars loses Oliva.
 

It's not unique to the cigar industry. Apple has always done this.

Re: Mikes Cigars loses Oliva.
 

Very interesting :hm

Re: Mikes Cigars loses Oliva.
 

Nice review.

Re: Mikes Cigars loses Oliva.
 

Good deal too!

Re: Mikes Cigars loses Oliva.
 

I'm of mixed opinions about this, mostly because I've only got a limited amount of information. As far as I can tell, that sampler is the only thing that's being sold so far below MSRP.

Any retail knowledgeable person will tell you that brand recognition is a major player in sales. Many retailers (whatever the product is) sell a certain item of a name brand as a "loss leader" to attract other sales. If I like the cigars in this sampler, I'm very apt to buy more of those cigars, probably at the full price. So it's very possible that MikesCigars was using that sampler to boost Oliva sales. Why they didn't simply make arrangement to do this with Oliva, I'm not sure.

I can also see Oliva's point of view trying to protect the brand, but there are other ways of getting around that problem, so I don't see why there's a need to pull the account. Raise your price to the supplier, and let them sell the item for no profit or a loss. Limit the available stock to them.




I'm wondering what other information we aren't privy to, because a half million dollar a year account is a LOT of money for a business to simply throw aside, even a multi-million dollar outfit like Oliva can't afford to go killing accounts left and right. "A penny here, nickle there, and soon you've lost a whole dollar" as the saying goes.

Re: Mikes Cigars loses Oliva.
 

I can understand why they would do this but my problem is that the manufacturers are more likely to pull an account due to the prices being to low but more often than not they will turn a blind eye to a vendor who is jacking the prices of their smokes. Perfect example is how many vendors get away with jacking the prices of Opus and Anejos but Fuente supposedly has a strict rule on this but day after day year after year we see it. Again just my .02.

Re: Mikes Cigars loses Oliva.
 

MB3's! :eek:

Re: Mikes Cigars loses Oliva.
 

I know it's a beat to death subject, but I can't say I find a ton of value as some do in a B&M. The 3 closest "cigar" stores are just that. Some accessories, moderate to over priced sticks, and none of the amenities that others seem to enjoy. In fairness, one does have a small coffee bar, but that has no appeal to me.

I do think that a person is as only good as their word and as such needs to stick by what they say they will do. Old fashioned maybe, but that's me. So Oliva pulling the contract, I guess good on them if they can stand teh loss of revenue. I tend to agree with Silound, business better be damn good to make up for it.

I personally shop where I get best bang for the buck. Might be at a B&M, Internet, a trade on CA, etc. Cigars are a hobby and as such cannot affect the household living, so it gets done with sharp buying as my other hobbies do. A B&M does not provide me any other benefit over any other source except the other sources typically have less attitude.

I have heard the argument about protecting the "brand" name with high prices and as of today still do not understand how pricing affects the brand name. Maybe one of you economics type can help a BOTL out adn explain it. I do not and have never found where just because an item was high priced it therefore had quality. Some items do cost more due to high quality, but they do not have to go hand in hand. I have a very small Mexican restaurant by my house, all the food is "home made", none of the frozen beans, etc. Amazing stuff. A great dinner for $6 - $7 is common. Beats the hell out of the chain store with the name and canned/frozen food at 30% more a plate.

Kind of rambled here a bit (need more coffee), but the bottom line for me is I don't get pricing and prolly never will regardless as to where it is sold from.

Re: Mikes Cigars loses Oliva.
 

from Yazzie:


:tpd: :tpd: My thoughts exactly.

Re: Mikes Cigars loses Oliva.
 

My local B&M is pretty much the same. Limited selection, high prices (I think an RP Vintage 90 was $10), and nothing in terms of accessories aside from a $2 cutter. I've heard that the owner keeps the place as a tax write-off.

Re: Mikes Cigars loses Oliva.
 

You should be concerned. There is a reason that these contracts exist and the cigar makers make cigars that are not to be sold on the internet. And its not that they feel sorry for the poor local B&M guy. Its financial. They need the locals to stay in business its a huge part of their revenue. I understand you personally probably have no local to go to or there is a bunch of a-hole snobs at your local. But prices would skyrocket or many makers would just fold without the locals.

Re: Mikes Cigars loses Oliva.
 

While I don't know the first thing about this situation and will not comment on it, but I will shed some light on the situation in general, coming from someone that's in the industry.

Protecting the price of our product is done for various reasons. The one that has already been mentioned is, deeply discounting a cigar line, or any other line at that, does de-value the brand. Take a look at Bose. They are a price protected product. To sell Bose, you have to adhear to their price points. You can walk into a Best Buy, h.h Gregg, or anywhere that sells Bose, and the price will always be the same. Hell I used to work at an h.h.Gregg when I was in college. I could get discounts on EVERYTHING for myself and I could edit the price on any big screen TV I wanted to, in order to match or beat a competitors price with a few strokes of a button, except Bose. No discounts, no price cutting. Look at it like this, when you say Bose to most people, they think, premier, high end, high quality, and high priced surround sound. Now, what if I were to open a chain of "BengalMan's Electronics" across the nation, and sell Bose for HALF of what everyone else was selling it for in my store and online. After a while Bose would no longer have the prestige that it does, and because of that, why would people pay the suggested retail for it at any other store when they can buy it for half off at BengalMan's Electronics? That's a segway into the next, and most important reason that prices are protected.

Cigar shops are a culture in themselves. A majority of the brands that have "brand name recognition" were built in B&M's. They have been, and will continue to be the grassroots, lifeblood of this industry. They provide a place where customers can socialize, relax, and get away from the everyday troubles of life, and have a cigar with someone that they may have never met before, but share a close bond with. That bond is the cigar. When you have an online shop that deeply discounts products BELOW MSRP, if takes away from the places that put most of these brands where they are today. Some brands may not care about that, but I know we do.

The problem that lies in this whole situation is the state taxes and OTP. None of it is regulated, and it keeps going up. In Michigan for instance, it's 32% and they're talking about doubling it to a whopping 64%. Now, a Michigan B&M can do nothing but pay the state that tax and in turn roll it over to the consumer. What the people passing this legislation don't understand, is that if they make it too high, people will do just what some of you have said, stop buying at the B&M's and buy online, because when you ship out of state, you don't have to pay the state (that is already changing though, but that's a WHOLE NOTHER TOPIC). Thus resulting in hurting the local economies even more because more local business will close and more people will be out of work.

In the end, please support your local B&M's. Even if it's only a stick a week, or a few here and there. You'd be supprised how far those few additional sticks can go for them. It may be the difference in being able to pay their electric bill without going into the hole that month. The B&M's helped build the indusry that we all love so much, the least we could do is show our support to them in these times of the economic downturn. These are all people that help keep your local economy alive. So next time your about to order that 5er online, think, "maybe this time, I'll go to my local B&M, pick up 3-5 cigars, smoke one and have a chat with the customers and owner about the hobby I love so much."

Thanks for reading my long rant. I'm heading to a B&M to work. :ss

Re: Mikes Cigars loses Oliva.
 

Nice post Ian :)

Re: Mikes Cigars loses Oliva.
 

I was hoping you would chime in as you have the inside look. With all you said, some I agree with, some I'm not sold on just yet.... I would ask/comment that maybe in days of olde when all there was were the B&M's, I can see where they could have held a higher level of importance with availability, knowledge, etc.

In my case of 2 years of smoking cigars and what's around me.

a) Small walk in humi (say triple walk in closet size), the guy there barely speaks English, and is mostly a cigarette shop.

b) Nice size selection, nice discounts on singles, no real knowledge of cigars by the workers. Some accessories.

c) Small walk in humi, coffee bar, some polite help, some not so polite.

d) Large selection, small smoking lounge, friendly, good looking college help (but not knowledgeable on cigars), or crabby help I will not deal with.

Glad you brought up Bose, I was going to add it to my original post but wasn't aware if many knew their pricing. I can hear the diff in a Bose Acustimass system and a low end Pioneer. I have no issues paying for better quality items as I will pay more for a tastier smoke than a yard gar.

I can't rationalize though paying more for a cigar selling locally at $9.25 a Monte White Rothschild or $4.75 ea on a cbid auction. The taxes here just aren't that high to explain that much increase. Exact same cigar, 1/2 the price. Quality doesn't change and there is nor real value gained by supporting a brick and mortar.

Interesting topic.
I agree there are those who are name oriented (my ex brother in law is one), all they care is the name others will see on said product. I on the other hand only require X value for X $$$ paid.

Re: Mikes Cigars loses Oliva.
 

Good post.

After 2 warnings, this should get them to listen.

Re: Mikes Cigars loses Oliva.
 

wow :(

Re: Mikes Cigars loses Oliva.
 

Now, just for discussion sake....I would like to add a few "thoughts"

How would one presume the industry will be affected by:

1) Online forums such as this....where much of the "cigar socialization" is occuring

2) Smoking by-laws that prohibit the use of tobacco products in public places (including B&Ms)

3) Increasing taxation on physical B&M stock

4) the Economic Downturn and how it affects sales of luxery items

5) The frequent witness of poor conditions in B&Ms (now this is largely speculation....the last 3 B&Ms I was at [from a total of 5] had a majority of the product affected by mold.

I love the concept of market protectionism....I think everyone's livelihood should be protected. But, at some point, the "turning tide" should probably be addressed. Maybe the B&M will have to re-invent itself if it wants to survive. At some point, customers shouldn't be expected to bouy up a failing market paradigm in order to artificially resuscitate it....when a superior model, more in keeping with the new world reality, exists.

Just my 2 cents

(This post would work equally well in the current B&M vs Internet thread as well)

Cyanide

Re: Mikes Cigars loses Oliva.
 

Here! Here! :tu

Re: Mikes Cigars loses Oliva.
 

Rolex is a perfect example of protecting a brand by strict pricing; it's made them and their dealers a ton of money.

Re: Mikes Cigars loses Oliva.
 

Remember that the next time you want to go to a lounge with a bunch of buddies, or by yourself to have a smoke and the shop is out of business because nobody saw the "value" in spending more at a B&M. I buy my fair share of cigars online, just like everyone else, but I also buy boxes from my local from time to time to do my part to help keep his doors open. I value his business, I value his leather chairs, I value his smoke eaters, I value the drinks I can get there, I value his service.

Re: Mikes Cigars loses Oliva.
 

And mine as well. Thanks NCRadioMan!

Re: Mikes Cigars loses Oliva.
 

Here Here. Thank you.

Re: Mikes Cigars loses Oliva.
 

I have to argue this. Bose is built upon reputation for high quality. The reduction of the price might marginally affect the impressions of that quality, but the quality itself will stand alone. In your scenario above, you would likely sell out every single piece you brought in quickly, every time, and the brand name would not suffer.

Of course, when applying the same thoughts to cigars, it holds much more merit. The taste of a cigar is very subjective (if you want proof, look at the reviews in the Silound's dog rocket thread on the NC review board). People often say that cigars are better when smoked at Herfs. The impression that a cigar is better due to price, emotional state when smoking, etc. has some serious validity. But I wouldn't say it was the defining aspect of makes a good cigar.

Just my $.02, carry on... :ss

Re: Mikes Cigars loses Oliva.
 

Nothing wrong with your arguments for those who frequent a B&M or use their Services. Hell if I felt that way then I would not have made the statement I made.

Different strokes for different folks. :ss I have 2 good B&M's in my area and have bone and bought sticks at both. However I don't hang out there, and the few times I've asked if they would price match on a box for VSG's or Oliva V's they said they couldn't come close....So for me I buy online at much cheaper prices and am happy for it. Now if I was one who hung out at a B&M daily and looked at it as a place to smoke/socialize, etc... then maybe I would feel differently...

When you shop for an airplane flight, or a trip, or a hotel room, do you always buy from one place or one price or do you shop around a bit

Re: Mikes Cigars loses Oliva.
 

Holy crap, I got a cross comment about that thread! :)


I agree about quality standing on it's own, and I agree that B&M's need support. But not everyone looks at quality. A HUGE number of shoppers (for cigars especially) buy high dollar assuming that it's quality because of the price. If a car costs 100,000 then it has to be a better vehicle than the one that costs 30,000 to them.

On the flip side, quality can command price, simply because there are people out there who will buy quality just for quality, regardless of the price.

Really it's about knowing your market demographic, and in a luxury market, it's all about those two extremes.

Re: Mikes Cigars loses Oliva.
 

I think it was in poor taste to mention Mike's losing Olivia's cigars. Whose agenda is this serving? Like even mentioning this on a forum with a dollar amount attached to it was done in spite.

More than one way to see this. Perhaps if the cigars were better promoted by the manufacturer, discounting like they did would not be necessary? Perhaps Mike's was already planning on dumping Olivia's and Olivia's want to protect their image?

Don't know all the details, but this strikes me as a "vindictive press release".

Re: Mikes Cigars loses Oliva.
 

I used to frequent and support my local B&Ms back in NY but since moving I have been unable to find a B&M that I feel comfortable with or happy enough with to call home. Problem I have been having is I either get to choose from Great selection but snotty stuck up staff or great staff but a Mehh selection of smokes most of which are not part of my rotation and than their is the other where their humidor conditions are amazingly bad for the name backing of the place but they too have mostly an unwelcoming staff. So now I find myself buying more from online retailers but do miss being able to head down to my local and buy a handful of smokes and get lost there for 4-6 hours. I have always known I can get the same smokes online for much cheaper but when I had a great local I never did mind paying $2-$4 more per stick because in my mind it was worth it.

Re: Mikes Cigars loses Oliva.
 

Disreguarding B&M's, they were warned twice not to do it, and finally got dropped the third time. I'm sure Mike's had a reason too on why they dropped it.

I find it kind of comical that Oliva is there to protect his brand because Oliva is known for great cigars at low prices. I doubt that the brand would be in such high quantity that he'll either run out of have to lower his reject standards. And the MSRP is not Oliva's margin, his is probably set based on volume so whether the distributor makes $0.01 or $10.00 a stick, Oliva's already got his money.

Re: Mikes Cigars loses Oliva.
 

You need to read my posts a bit more carefully, out of my choices only one really has a smoking lounge and the attitude there is not something I want to put up with to smoke there. I like a bourbon with my sticks and as most of my friends don't smoke cigars.... you see where I am going. As I stated, a B&M im most senses does not serve me (YMMV) any real service other than a spur of the moment buy... Even then not much due to pricing.

Re: Mikes Cigars loses Oliva.
 

I agree that I only read your one reply regarding the B&M's, however you said there's no value in supporting a Brick & Mortar. If you would've said there's no value in supporting "your local" B&M, then I would possibly understand if you have a bad shop. But to make a blanket statement as you did, I can't agree with that.

Re: Mikes Cigars loses Oliva.
 

In addition, I've never bought a box of cigars online and met a new friend in the process. I've bought several boxes, singles and samplers and have met many new friends in that process at my local shop and shops that are not local, but I've stopped in on a whim. I know that supporting my local does that community well too. Next time you're on vacation and forget your cigars, see how fast an internet supplier can get your relaxation to you.

Re: Mikes Cigars loses Oliva.
 

Yes!
And Mikes was one of the biggest gougers when it came to Opus during the cigar boom.

Re: Mikes Cigars loses Oliva.
 

:tpd:

Re: Mikes Cigars loses Oliva.
 

Kind of off subject but on topic...

My local B&M has an area to smoke, but you have to be a member and pay a significant membership fee to sit and smoke there. The balance of their floor plan consists of their humidor (quite nice), accessory displays and a cash register. Smoking there would generally be uncomfortable. Do I still patronize them? Yes. Do I feel guilty about buying on-line? No. Would I buy more (a higher percentage of my purchases) if they had a chair to sit in and a TV to catch a little bit of a game? You bet!

What's my point? I'm not sure. I guess every B&M is different and "deserves" patronage based on their customer service and amenities. When I was in Orlando and visited Corona cigar, I bought their cigars, drank their beer and enjoyed myself immensely. If all B&M's were like that I think we'd all feel more obligation to buy more from them. :2

Re: Mikes Cigars loses Oliva.
 

Perhaps a little off topic but...

Right now most of the shops that I visit where I live, in Ohio are changing the way they do business. I am seeing the opening of "private lounges" in shops that before the smoking ban passed had an area to smoke that was available for free. The membership fees vary but most have a monthly fee and a daily fee. The daily fee ranges from $5-$10. I have quit smoking there because of this extra expense and since I am not there as often I spend about 1/4 of the money that I used to on their cigars.

So what are my options? I either drive to the shop and pay $1-$2 or possibly more per cigar to support a local business that in my mind is charging people for a service that they offered for free 2 years ago
or
buy online and get an equal product for less?

I guess my loyalty to my local shops went away when they decide to try to make a quick buck off their regulars instead of using the smoking ban as an opportunity to welcome smokers and sell more product