Box Pricing at B&M's

[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.

[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.

[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.

[cbsmokin]

Buying smokes at the B&M is like buying drinks at a Bar. You don't go to either because they have the best prices.

[livwire68]

The closest we come here in Vegas is the Indian smoke shop. They are immune to taxes, cheaper yes! As good as online not quite. Online = no taxes and most buy in large quantity therefore cheaper as well.

[DrDubzz]

both shops here have great prices, good service, pretty good selections, and are fun to patronize when possible. When I'm buying NCs, I usually will go to them unless I want something Pepin made, then I have to shop online.

[rrplasencia]

mine gives me 15% off everything (including opus and padron anny). i have a locker there, i've also been known to bring lunch from time to time. i can walk in and get a recomendations on something new since they know what i like. bought a box of opus in the fuente fuente size for $358, i haven't seen that online. all that being said if i see something really good online they'll come down a little or tell me that's a hell of a deal and i should grab it. and in the last two weeks they've given me two anejo 50's and a winston churchill by davidoff (churchill size) as opposed to a free fiver of el pollo loco dog rocket brand.

[troutbreath]

My favorite shop gives me 15% off, because I joined the "club" they have. The cost of the club was so minimal that I made up the difference in savings the first week I had the discount. Besides, I probably use that much of their electicity just shooting the bull with the fellas.


I usually buy from my B&M, because I want to support them. I want to have that place to hang out, to smoke, to enjoy. Can't do that online (no offense to the folks here, of course).

[renton20]

Due to the horrendous taxes we have here in MN B&M prices are pretty ridiculous. I remember about six months ago asking the price on a box of oliva Gs. I was looking at online retailers and found a couple places that had them at about $60 a box shipped. I asked the rep what kind of prices I was looking at because there was a sale going on. It ended up being about double what it was online. Now I am all for supporting local businesses and I like to stop by my B&M around once a week when I can, but there is no way that I can justify paying double the cost for the same product.