Local B&M pricing vs Online pricing

[BigDawgFan]

Ok, so here is my Noob question for the day. I understand that online dealers usually have an advantage over your local b&m when it comes to pricing. What I'm wondering is how much of a difference should there be in the pricing.
Example: I bought two RyJ Bully cigars at my local b&m and paid $5.50 each for them. I liked them so I thought I would buy a box. Went online and picked up a box of 25 for $68.00 plus shipping (Which I think was like $6.00). This works out to be $2.72 per stick without the shipping.
So I guess my final question is "Are they taking advantage of me or are the taxes that high?" I know a couple of bucks isn't that bad but why should I buy a box from my local b&m when I can get it about half price online? Just wondering what everyone thought.

[DennisP]

One of the biggest reasons online sites are cheaper is because you're not paying state tobacco tax and you are supposed to pay that yourself seperately.

Some B&Ms charge much more than others, part of it depends on where they are located, attitudes of owner, etc. Finding a good B&M is key. With no state tobacco tax here in FL my B&M is about the same as most online sites. But, many others are about $2 more/cigar on a single basis.

[rottenzombie]

It's hard to say if it's taxes or just high prices . Most small B&M's have higher over head than online sellers . That's why I buy most of my sticks online , but I pick up a box or two at my local B&M every time I get home to have a local connection and to help support some small business owners . That and the people at My local B&M are really nice people who I like to hang out with when I'm town .

[rgordin]

The B&Ms I frequent are pretty good on prices of individual sticks, compared to online prices. Where I find the savings online is in the boxes or special 5-pack pricing. For a few dollars more, I will always support the B&M but some of the box pricing (combined with the ability to find sales online) mean that I will usually buy those online.

[Harpo]

In the UK you can easily add £1-2 (~ $2-4) per stick if you buy from a B&M. :S

Plus, weirdly, all the sticks I've ever ordered online are in a far better condition than B&M sticks. They draw better, don't have dings in the wrapper etc. etc.

Online all the way!

[jdbwolverines]

Its the tax that is the killer for me. I can find B&Ms that have virtually the same prices as online dealers once you take into account shipping and any potential discounts given at B&Ms, but it seems like most states have almost a 25% tax on cigars. When you order online you avoid this.

[skyhigh340]

It's all about the taxes. In Michigan my local B&M is higher than online but that is only because of state taxes. I personally buy from my B&M because it's not just the stick it's also the place to smoke it and the conversations that happen. The only problem with the conversations is the liberal tint they take in this shop. Sorry Mark had to throw a jab out there.

[Dgar]

Originally Posted by rgordin

The B&Ms I frequent are pretty good on prices of individual sticks, compared to online prices. Where I find the savings online is in the boxes or special 5-pack pricing. For a few dollars more, I will always support the B&M but some of the box pricing (combined with the ability to find sales online) mean that I will usually buy those online.

[BlueHavanaII]

Taxes is only one component of the online pricing difference. Do the math on that Bully and you'll see that this is one of the heavily discounted items found on the larger sites. A couple of other factors also should be considered:
-Loss leaders- Most business have loss leaders, items that are sold at, or just above cost, to bring people in. I do it in my shop with monthly discounts and a 30% off bin. The larger the business, the more agressive they can be with their loss leaders.

-Quantity discounts- As an example, one vender recently offered me an RTDA promotion of an 18% credit if I spent $1200 on their merchandise at the show. This discount escalated on a sliding scale to a 50% credit if I spent $250,000! Obviously the smaller guys (like me) get screwed on this deal, and I can't compete. (I don't, and will not, carry this particular brand).

-Contract discounts- some of the larger online companies have huge deals with the manufacturers to purchase a large quantity of product over time for a negotiated discount. It is rumored that there may even be payment up front for these purchases, essentially giving the manufacturer a loan for delivery of future product. Obviously, a manufacturer with cash flow issues could benefit greatly from an arrangement such as this, but it gives the online company a huge competitive advantage in pricing.

Bottom line is...
...do you want the future of cigar smoking to be as impersonal as going online to select a product you haven't seen, possibly haven't yet tried, pay for in advance, wait for your product to arrive and, if you are not happy, wait for a replacement or a refund, and smoke in your backyard, or...
...would you rather go to your local B&M, discuss the art of premium cigars, personally select your sticks and relax and enjoy your cigars with friends.

For me the choice was clear, and I opened my own shop, but the future of the B&M is a bit hazy right now. It's up to the consumer to decide.

[Dgar]

Originally Posted by BlueHavanaII

...would you rather go to your local B&M, discuss the art of premium cigars, personally select your sticks and relax and enjoy your cigars with friends.

I wish I could visit Blue Havana, it sounds like you guys have figured it out.

I live in a very large city with several B/M, and I would not describe any of them as a place to disscuss the art of cigars, or consider them a nice place to relax. Many are owned by old coots that could care less about growing thier business or offering the avg consumer any reason not to buy online. Most have no smoking lounge, at best you'll find a small table stuck in a corner somewhere. I think the B/M's that realize they need to offer thier customers a reason/service to pay more are the ones that will survive. But if all they want to do is open the doors and sell cigars, they will be out of business, and I'm not sure thats a bad thing, some of them just dont get it.

[Harpo]

Originally Posted by Dgar

I wish I could visit Blue Havana, it sounds like you guys have figured it out.

I live in a very large city with several B/M, and I would not describe any of them as a place to disscuss the art of cigars, or consider them a nice place to relax. Many are owned by old coots that could care less about growing thier business or offering the avg consumer any reason not to buy online. Most have no smoking lounge, at best you'll find a small table stuck in a corner somewhere. I think the B/M's that realize they need to offer thier customers a reason/service to pay more are the ones that will survive. But if all they want to do is open the doors and sell cigars, they will be out of business, and I'm not sure thats a bad thing, some of them just dont get it.

You hit the nail right on the head.

[The Professor]

Originally Posted by Dgar

I wish I could visit Blue Havana, it sounds like you guys have figured it out.

It *is* a treat. That reminds me... I haven't been there in a while.

[JJG]

I consider myself extremely lucky to have a B&M here in Houston that chooses not to mark up their singles. On top of that, they always have lots of 64's and 26's in stock at $8-15 a piece. In many cases I have found that they charge less than their online competitors.

[Cigarmark]

Originally Posted by skyhigh340

It's all about the taxes. In Michigan my local B&M is higher than online but that is only because of state taxes. I personally buy from my B&M because it's not just the stick it's also the place to smoke it and the conversations that happen. The only problem with the conversations is the liberal tint they take in this shop. Sorry Mark had to throw a jab out there.

That and the fact that other people smoke your cigars.

[bobarian]

In California, state tax alone is over 60%. When you consider that the local B&M has so many other costs involved it is inevitable that you only find prices comparable to the net on closeouts or a few special items. Despite this I still shop regularly at my local, the money stays in your community and you are helping a small business. Check this chart for your states tax rate. I dont know if the info is 100% accurate, but at least you get an idea.
http://fujipub.com/cigartax.html