Box Pricing at B&M's

[Yazzie]

I buy mostly boxes and purchase about 95% of my smokes online but every now and then I'll pick up a few singles at one of my local B&M's when I want to try something new or pick up some Ashton VSG's (Favorite NC) when available

I was running errands today and was near the B&M and decided to see if there were any VSG's in stock since I was completely out. He must of hit the Muthaload because not only did he have all the sizes, but also had several boxes as well. I was like, okay I'm here and I love the Corona Gorda. Why not just pick up a box here. So I grab the box and ask the owner what he can do for me as far as pricing on the box. He said "I can give you 10% off but that's about it" I politely told him that I can buy them from Famous for a LOT less than the 10% off the box price he was charging me. I kind of understand his point since the VSG is so popular I'm sure he moves a lot of stcks versus boxes. But from my standpoint I can see why I buy most of my smokes online.

Does your B&M match box prices of the online vendors?

[BengalMan]

Very few if any shops match online prices. They all have to pay OTP tax to the state, which can be as high as 70% of the wholesale price. If B&M's matched online shops prices, they would be broke and go out of business. In the end, it's important to support your local B&M's. They are the ones that drive our hobby, provide the lounges, the people to have good conversation with while there and the overall cigar experience.

[goalie204]

Not in Canada.

[borndead1]

Tobacco tax in Michigan is 36%. One of my B&Ms has pretty good prices, but there's no way he could match online prices. He comes close on a few items.

[BengalMan]

Originally Posted by borndead1

Tobacco tax in Michigan is 36%. One of my B&Ms has pretty good prices, but there's no way he could match online prices. He comes close on a few items.

32%

What B&M do you frequent? I'll be up there Monday and Tuesday next week visiting some customers, we should meet up for a smoke if your around.

you should be thankful that you have a B&M where your at the town i live in nebraska there is no B&M here the best cigars here is walgreens the closes B&M to me is is over 140mile away so i have toget all my stuff on line

[borndead1]

Originally Posted by BengalMan

32%

What B&M do you frequent? I'll be up there Monday and Tuesday next week visiting some customers, we should meet up for a smoke if your around.

Smokes On Burdick in Kalamazoo. Was planning on meeting another BOTL there on Monday around noon-ish.

[BengalMan]

Originally Posted by borndead1

Smokes On Burdick in Kalamazoo. Was planning on meeting another BOTL there on Monday around noon-ish.

Gotcha, John is good people. I won't be in that part of Michigan this coming week, but I do have an event there on the 29th from 4pm-7pm, you should stop by.

[Yazzie]

Originally Posted by robertw1249

you should be thankful that you have a B&M where your at the town i live in nebraska there is no B&M here the best cigars here is walgreens the closes B&M to me is is over 140mile away so i have toget all my stuff on line

No really, as I said I buy most of my stuff online and after today that will probably swith to ALL. If you aren't concerned with touching your smokes or don't need a place to smoke/meet folks then there is not a whole lot of benefit of a B&M IMHO

no i just saying that i wish there was a B&M here so i can go and feel and touch the cigars hand enjoy talking with other people that smoke cigars i pretty much i smoke alone no one that i know smoke cigars here i was just saying the you where lucky to have a B&M where your at

[MikeyC]

Originally Posted by BengalMan

Very few if any shops match online prices. They all have to pay OTP tax to the state, which can be as high as 70% of the wholesale price. If B&M's matched online shops prices, they would be broke and go out of business. In the end, it's important to support your local B&M's. They are the ones that drive our hobby, provide the lounges, the people to have good conversation with while there and the overall cigar experience.

What's OTP tax?

I know in most B&M's I buy from in MA they price the cigars pre-tax. Then the 5% (maybe 10%) tobacco tax is added at the register along with 5% sales tax. Now, if my B&M could match on-line prices pre-tax I would probably buy more there. However, even before tax every B&M I go into charges more than on-line stores. So, I just buy singles locally mostly hard to find stuff like Opus X and Anejo because they're so expensive I'm not going to buy a whole box anyway.

[Don Fernando]

here in The Netherlands all cigars are equally priced everywhere and it is illigal to sell them under the tax price. The importer sets his pre-tax price, government adds the tax and all cigars (or the boxes, if sold as boxes only) get a 'bandarol', those are the 2nd bands that seen on some photo's i've posted.

If you are a regular customer some B&M's might give you a 10% discount on a box, but legally they are not allowed to.

The B&M I frequent gives a 10% discount on all cigars (even singles) to the folks that rent lockers. They have stupidly high state tax to deal with. They have an online shop that's actually competitive with other online shops, but they can't ship to an in state address.

I buy a lot of smokes there (including boxes). I like having them around.

[RevSmoke]

Originally Posted by Yazzie

Does your B&M match box prices of the online vendors?

Usually 10% off.

But, there are a couple of possible reasons for this.

a) online vendors usually get volume discount on purchase.
b) online vendors usually do greater volume of purchases.
c) (this one I know is true) I cannot speak for other states, but WI has a state tax imposed to tobacco coming in from other places, and that is immediately added to the price.
d) (this also is true) If I buy from Pennsylvania online, I don't pay the state sales tax - $100 box is $100. A $100 box in WI is $105.50 (5.5% sales tax).

Some of that is just simple economics.

Peace of the Lord be with you.

[RevSmoke]

Just some info regarding my local B&Ms.

Closest is the one in Shawano, 10 miles up the road. It is a Book World, selling books, magazines, pipes, tobacco, and cigars. As you might guess, the selection of tobacco related items is very slim. If I took a 30 mile radius population survey, I'd guess maybe 30,000 people (if that many).

As I move out even further, there's another Book World about 22 miles away in New London.

Then, about 45 miles, I have either Green Bay or Appleton.

In Appleton, there are two "bookstore" tobacconists of the "Book World" variety. And, a real tobacconist (Appleton Souvenoir & Cigar) with a walk in humidor and a couple bookshelf humidors - decent selection - prices are much inflated.

In Green Bay is Boss's, a newsstand tobacconist. However, he has a decent walk-in humidor, and his prices are a bit better. But they are nowhere near the online prices.

Appleton Souvenoir & Cigar is the only one with a "cigar lounge" and the last two times I stopped in, it was populated with hookah smoking 20-somethings, and the salesperson tailed me into the humidor and tried pushing the "super-premiums" on me, "these are the best, you should try these - Cigar Afficionado gave them a ** rating."

So, I asked, "Which cigars do yous smoke?"

"I don't smoke cigars."

Anyway, when I do get to Appleton, it is usually to do pastoral visits, so if I do stop in a the shop, I don't linger long.

[shilala]

I think someone made an excellent point. B&M's provide an experience that comes at a cost. My online vendors don't provide a comfy couch and a nice atmosphere to hang with my buds.
Mind ya, I haven't come across a B&M that charges excruciating prices on their cigars, and I can count my B&M smoking experiences on one hand.
What I can say is that when I'm traveling and I see a B&M I stop and play cigars, then I sit and have a smoke. It's an oasis. A totally cool oasis.
I always buy a handful of sticks because there's always something I haven't tried and there's no B&M anywhere near here. The few bucks I spend is honestly a value.

[duckmanco]

My local chain of B&M's prices are high, but I use them mainly for singles as box prices tend to be WAY over anything close to internet retailers. On some smokes, like Oliva and Padron, they are pretty close to internet box prices which allows me to use gift cards from them on certain boxes. Either way, its nice to peruse a cigar shop now and then, if not just for the aroma and the sight of it.

[Rabidsquirrel]

Nothing beats coming out of a store with a few new purchases in your hand.

[md4958]

Originally Posted by MikeyC

What's OTP tax?

I know in most B&M's I buy from in MA they price the cigars pre-tax. Then the 5% (maybe 10%) tobacco tax is added at the register along with 5% sales tax. Now, if my B&M could match on-line prices pre-tax I would probably buy more there. However, even before tax every B&M I go into charges more than on-line stores. So, I just buy singles locally mostly hard to find stuff like Opus X and Anejo because they're so expensive I'm not going to buy a whole box anyway.

Mikey, the 30+% tax is already built into the price of the stick. The extra 5% they charge you is SALES tax.

[Silound]

Originally Posted by MikeyC

What's OTP tax?

Stands for Other Tobacco Product, which includes any non-cigarette tobacco products (chw, pipe tobacco, snuff, dip, cigars, cigarillos, etc). Cigarettes, being a vastly larger market are taxed differently. Some states differentiate between "Little Cigars" and Cigarettes, while some simply consider former to fall into the latter.


As of January of 2008, all states except Pennsylvania and Florida have some form of cigar taxes, ranging from pennies per cigar up to about 75% of wholesale. This is why all the major online distributors base in those two states. Some states only tax if the value per cigar is above or below a certain price-point, and some states have extremely convoluted laws, but those two are simply no-tax, period. (for more information on OTP taxes, visit http://www.taxadmin.org/fta/rate/otp.pdf)

Online distributors have one major advantage over any B&M: They supply a customer base of millions of people, which allows them to sell cigars as a less than "optimal" markup. "Optimal" markups in a retail business are defined by the book as 100% over cost. Since a large online-based warehouse operation has substantially less operating overhead per-cigar and no tobacco tax, they can sell cigars for low markups, such as only 25%, and still make a profit.

Combine no taxes, plus markup differences, with discounted massive bulk purchases from manufacturers and you begin to see why your local B&M will cost you considerably more for a box than CI or Famous might.

B&M's cater to people who are less concerned about money and more concerned about atmosphere and specific selections. For instance, there are many cigars that are released as B&M only cigars. Or a B&M may offer amenities such as lockers, cigar events, membership benefits, etc. They also offer the benefit of on-spot business. You have a problem with a purchase, or maybe you don't like your cigars, or maybe you're just impatient? You can drive that minute to your local privately owned shop where, more than likely, they will make good on your problems.

Also, there is the looming threat of your state sending you a tax bill for cigars purchased online. Believe it or not, and whether you think you're unlikely to get caught or not, it happens quite regularly.


All-in-all, I suggest you support your local B&M and buy cigars from them, even at a larger cost. You can soapbox all day about why that's a terrible idea or a good idea, or simply be indifferent, but remember that if all the B&M's shut down, that's support for the love of cigars we're losing where it counts against taxes or other unwanted incursions.