Satellite
Retail Cigar Program -
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There may even be a niche for those retailers who face competition from local beer and wine distributors, Stewart suggests. "I've had a handful of tobacconists who have made a real good living by going out and servicing alcohol distributors' accounts because they don't. They are liquor distributors and they fall short on the cigar end. They put in a humidor in a convenience store and then they disappear for two months." Stewart-Beckwith markets a mahogany and acrylic humidor that will hold about 100 cigars for $85 that is specifically designed for satellite countertop sales.
"All in all," Stewart says, "it's best to cater to the smoker. If that means finding and servicing outside accounts that are in a more convenient location for the customer, then so be it."
Stewart believes that the overheated demand for cigars during the last four years caused many smoke shop owners to become complacent about business. "They got lazy," he said. "They were selling just about everything that was on their shelves, and they didn't even have to worry about whether the cigar was good or not. Now that manufacturers' production has begun to catch up with consumer demand and cigars are just about everywhere, store owners are starting to feel the pinch. I encourage our customers to be as imaginative as possible." Wedding stores, candy shops, and flower stores should not be overlooked for the opportunities they present, Stewart asserts.
Eric Marzewski, president of Green Mountain Unlimited in Severn, Md., a distributor of display humidors, accessories, and specialty items, says that it's time that the cigar retailer takes product to the customer, instead of vice versa. "The cigar market has been backwards," he says. "Cigars need to be marketed to consumers. That's the way to sell the product. The retailer should be supplying local businesses - the places that their customers shop when they aren't coming into the smoke shop. They can become distributors at the same time they are running their retail business without having to overprice their cigars." Green Mountain offers a wide variety of display humidors, ranging from acrylic units that will hold 150 cigars to handmade cabinets that will store 2,000 cigars.
"The cigar smoker is not just going into a retail cigar store," Marzewski maintains. "He's also going to the local golf course or to a good restaurant or to get a haircut or to a wine show. Those are markets that too many retailers are overlooking. The retailer who doesn't start paying attention to those markets is going to get eaten alive."
Green Mountain takes its product line beyond cigars, humidors, and accessories, offering to help retailers open satellite accounts for specialty coffees, teas, and venison, ostrich, and alligator jerky. "We form very strong relationships with our suppliers so that we can sell to retailers at the lowest prices," Marzewski says.
According to Marzewski a benefit apart from selling cigars is that satellite sales locations provide advertising at a very low cost. "Whether they sell $1,000 in cigars or $5,000, they get people to know about their local shop," he says.
The ever-changing dynamics of the cigar market means that retailers have to change too, according to Dan D'Alessio, president of Dancraft Inc. of Providence, R.I., a manufacturer of a range of display humidors that accommodate between 50 and 300 cigars at costs ranging from $50 to $125. "When the cigar boom took off, people were able to make of lot of money by just being there," he says. "If you want staying power, you have to work at it. If you can't bring the traffic to the tobacco, you need to take the tobacco to the traffic."
"Our sole focus is to help people sell their product,"says D'Alessio. "These days, it's very important for retailers to find alternative sales locations because premium cigars are being sold everywhere. The retailer needs to stay involved though. If he places a humidor in a location and then washes his hands of it, it's not going to work."
Steve Ginsberg, owner of Claude's Cigars in the Philadelphia suburb of Hatboro, Pa., said the reality about where people were buying cigars caused him to expand beyond his shop. "I figured if restaurants and bars were going to be selling cigars anyway, I should be the one supplying them."
Ginsberg has about a dozen retailers, including a local tuxedo shop, that he supplies with cigars and display equipment. "The tuxedo guy is not going to make a living selling cigars, but if he's got a wedding booked or knows about a bachelor party, he can market cigars as part of the deal and make a nice bit of change."
Ginsberg provides a small commercial display humidor for his customers. With some, he sells cigars wholesale up front. With others, he places cigars on consignment, which means he gets to keep more of the profit. "That's the easiest thing to convince a customer to do because there is no money on their part," he said.
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