The Most Important Number in Your Store

Over the span of three decades as a retail tobacconist, one of my strongest memories is standing in the humidor with a clipboard for hours counting cigars. It's certainly not one of my fondest memories, but it taught me one of the most important lessons in retail.

Row after row.

Shelf after shelf.

Box after box.

And just when you think you've found a rhythm, one manufacturer alone packs cigars in boxes of 20, 24, 25, and 26.

What the heck?

Then there's open-face stock.

Then there's sealed back stock.

Then there's back stock where somebody opened the box and never told anyone.

Was it Natural or Maduro?

Did somebody combine two boxes?

Did someone pull from back stock and forget to record it?

You can't assume. You can't estimate. You have to count.

By the time you're finished, your eyes are tired, your mind is numb, and all those little brown cigars begin to blur together. No matter how careful you are, you'll inevitably recount sections, question your numbers, and occasionally make mistakes. It's tedious work.

It's also one of the most important responsibilities of owning and operating a tobacco business.

Inventory counting is not glamorous. Customers never see it. Employees and managers rarely enjoy it. It doesn't create excitement, attract attention, or generate social media posts. Yet few activities are more important to the long-term health of a retail tobacco business.

Every cigar on your shelf represents money.

Not retail value.

Not projected value.

Real money that has already left your bank account and been invested into inventory.

If you don't know the wholesale value of your inventory, you don't truly know how your business is performing.

Sales reports tell part of the story.

Inventory tells the rest.

A disciplined inventory process doesn't need to be complicated.

We recommend:

• Monthly: Count all cigars. For most tobacconists, cigars represent the largest and most important inventory category.

• Monthly: Rotate spot checks through other departments such as lighters, cutters, humidors, pipes, pipe tobacco, and accessories.

• Quarterly: Complete a full-store inventory review to identify trends, discrepancies, and areas of concern.

• Annually: Perform a comprehensive fiscal year-end inventory. Your financial statements should reflect reality, not assumptions.

One of the lessons inventory teaches is that the number is rarely what you think it is.

The inventory value never increases on its own.

Theft happens.

Damage happens.

Sampling happens.

Breakage happens.

Receiving errors happen.

Miscounts happen.

Inventory is constantly being chipped away in small ways.

If the number ever goes up unexpectedly, it's usually because something was counted incorrectly the last time, not because cigars somehow multiplied overnight.

Inventory has a way of exposing reality.

That's exactly why it matters.

When a new inventory value is established, it should be entered into your accounting system. Whether you're using a spreadsheet, bookkeeping software, or a sophisticated POS system, inventory represents an asset on your balance sheet.

Every inventory count creates an opportunity to reconcile what you thought you had against what you actually have.

Those differences are called inventory adjustments.

Inventory adjustments affect your balance sheet, your profit and loss statement, and ultimately your profitability.

That's why inventory counting is not merely an operational exercise.

It's a financial one.

I can't tell you how many times I've heard a retailer talk about sales, profits, or growth, only to discover they haven't physically counted their inventory in months, or even years. They know what the computer says they should have. They don't know what they actually have.

Those are two very different numbers.

Inventory is one of the largest investments most tobacco retailers make. If you don't know its current wholesale value, you're operating with incomplete information. Every important decision you make, from purchasing and pricing to expansion and staffing, depends on knowing where you truly stand.

Before worrying about marketing campaigns, expansion plans, new product lines, or additional locations, make sure you know the wholesale value of the inventory already under your roof.

To be a retail tobacconist is to be a businessperson.

And businesspeople count.

They count because discipline creates awareness, awareness creates control, and control leads to better decisions.

You cannot manage what you do not measure.

And you cannot truly understand your business if you don't know the value of the inventory sitting on your shelves.

It's not glamorous.

It's not fun.

But it's essential.

Because inventory is more than the cigars we buy.

It's the responsibility to preserve them, protect them, account for them, and understand their value.

Your inventory value will tell you the truth, whether you want to hear it or not.

Humidor Etiquette

   

Retail walk-in humidors must be rigorously maintained. Their temperature, humidity, air quality, and sanitary standards must be perfectly kept to preserve the cigars and protect the customers that smoke them. People walking in and out of retail walk-in humidors bring germs, dirt, and debris into the environment, so many steps must be followed to protect the cigars. Firstly, Tobacconists must regularly dust, sweep, mop, and vacuum their humidors. But it takes both customers’ and Tobacconists’ efforts to maintain the integrity of the cigars in a walk-in. Ultimately, Humidor Etiquette is about following the ‘golden rule’ and doing unto others as you would have done unto you. The following etiquette rules apply to both consumers and Tobacconists who use a retail walk-in humidor.

   

NO SMOKE
The natural aromas of a walk-in humidor are a subtle co-mingling of different tobaccos from all over the world. Part of the reason Tobacconists make their walk-ins accessible to customers is so that they can enjoy the smell of aging tobaccos. Lit tobaccos will overwhelm the natural aroma of a walk-in and excessive smoke can taint the flavor of the cigars. Not smoking in a walk-in is part courtesy to the next customer and a way to protect the cigars themselves.

TOUCHING CIGARS
Ultimately, the head of a cigar will enter your mouth, so cigars must be treated with the same care and respect as food. Maintaining clean hands when touching cigars is imperative. It is important for Tobacconists to have sanitary soap and hand sanitizer on hand for personal and customer use. In addition, when inspecting cigars you should only touch the foot and shaft area. Never touch the cigar above the band (head and shoulders) since someone will eventually put that cigar in their mouth.

SMELLING CIGARS
As consumers, we all have the right to smell the wrapper and foot of a cigar. In fact, that is part of the enjoyment of picking a great cigar. While smelling cigars can be part of the pre-selection process in a walk-in, it must be done in a sanitary and respectful way; as the nose contains germs and mucous that must be kept off cigars. If the cigar is wrapped in cellophane, push the cigar half-way out of the cellophane. Cellophane smells like cellophane so there is no point in sniffing it: when finished, you can push the cigar back in. Whether smelling just the wrapper or the foot of the cigar, always keep the cigar at least one inch from your nose and/or facial hair. One inch is close enough to sample the aroma of the tobacco yet far enough to minimize contamination.

    

SELECTING CIGARS
Now that we have covered the proper techniques to touch and smell cigars, we can address the more general process of picking one out. Some customers take the first cigar out from on top of a box, while others like to scrutinize every single cigar. To each his own method; there is no right or wrong. But, when pulling cigars out of a box, one must be very careful not to tear the wrapper or damage the head: in particular, the cigar foot is highly susceptible to damage. If you take cigars out of a box, lay them in a safe place and return them carefully when you have found your perfect cigar.

DAMAGED CIGARS
One of the biggest economic challenges for retail Tobacconists with walk-in humidors is minimizing the amount damaged cigars: it is a massive expense unique to our business. While some cigars come damaged from the manufacturers/distributors, most damage occurs because of consumer mishandling. Retail Tobacconists absorb the cost of damaged cigars since they cannot be sold at standard retail margins. If you see damaged cigars in your retail Tobacconist’s walk-in, let them know: they will thank you for it.

RETURNING CIGARS
Sometimes you take a cigar all the way to the cash register and then decide that you don’t want it – that’s ok. As long as you’re handling the cigar properly, you can return it to the walk-in. When returning a cigar to the humidor, it is always best to place it in the proper box with the head up and cigar band facing forward. This is called “facing” and retail Tobacconists do it every day to honor the brand, cigar maker, and our customers.

Most retail Tobacconists will not allow customers to buy a cigar, take it out of the shop and return it at a later date. Due to cigars’ precise humidification and temperature requirements, plus the fact that they will end up in your mouth, cigars must be treated like perishable food.

OFF THE FLOOR Keeping cigars off the floor is obvious, but it is also important not to place boxes on the floor, either. Placing cigar boxes on the floor contaminates them with the same dirt, debris, and germs that people’s shoes have been tracking in. This piece of humidor etiquette is particularly important for Tobacconists to heed since it is easy to forget when stocking and organizing the walk-in.

The Certified Medallion: Leveraging TU

We tell all TU Apprentices and Certified Tobacconists that getting Certified and passing the final exam is just the beginning of the process, albeit the hardest.  Ultimately, Certification must be leveraged by wearing the Certified Pin and using the Certified Medallion, on business cards, store signage, and your website.  After all, if you get Certified and never mention it to your customers, co-workers, vendors, and the community around you, then the benefits will never materialize.  While TU is no magic bullet for what ails our industry, the ability to leverage it is a massive competitive advantage.

PS: every CRT store can get a framed diploma with their logo, store signage stickers, and the right to use the Certified Medallion as long as they maintain one CRT.  Individual CRT can receive the Certified Pin, a personal diploma, mouse pad, and more…

The Great Humidor Catastrophe of 2009

  
No matter how much you dote on your cigars and humidor, there are always events and malfunctions out of our control. Last month the hygrostat (humidity control) in one of my walk-ins failed to work properly. Over the course of one night the humidity shot up into the nineties and devastated several hundred dollars worth of cigars. Fortunately, most of the cigars that were hyper-saturated survived without permanent damage. As you can see in the picture above, the cigars were laid out on paper towels to dry the wrappers and help them return to normal humidity levels. Fortunately, the few hours they spent in 90+% humidity did not ruin all of the cigars. Had this happened for an extended period of time, all would have been lost. However, a few dozen cigars did not make it through the night. Mostly, they suffered from wrapper damage which resulted from expansion. Most bulged and tore at the foot while others burst in the center. Some of the cigars were permanently disfigured as they contorted while expanding and contracting.
 
On The Bright Side
I have been smoking the aesthetically damaged cigars for over a month now and I can honestly say that their flavor qualities have not been significantly effected. While they may be ugly, they are delicious. As a professional Tobacconist, I am used to smoking damaged cigars. Some months I smoke nothing but damaged cigars. Its not so bad really…. life could be worse.
 
While extreme humidity can ruin cigars by fostering mold growth or drowning the leaves, it is not always a total loss. Remember, cigar tobacco is rolled at much higher humidity levels than 70% – usually in the 80-90% range. So, they can be resilient enough to recover.

Clean & Organize

“Clean and Organize”, while it sounds like simple common sense, there is nothing common about common sense and the simplest things can be the most profound.

  

Cleaning and Organizing can be the most powerful business practice you employ. If business is slow, clean and organize; if the weather is bad, clean and organize; if the country is in a recession, clean and organize; if you are bored, clean and organize. On the surface, the benefits may seem obvious: the store is cleaner, customers see you cleaning (positive perception), and things look better. But the real benefits of cleaning and organizing can be far greater. I have found thousands of dollars worth of ‘missing’ inventory while cleaning. More importantly, cleaning and organizing allows you to discover hidden assets, liabilities, and opportunities in your retail store (or any other business). Every basement, storeroom, shelving, closet, cabinet, drawer, and shelf in your store can reveal a hidden opportunity. Sometimes you will find old displays which can freshen up the shop, or products which have long been forgotten. But, the greatest benefit from cleaning and organizing is not the things you will find, but the potential ideas you will have. Nothing clears the mind like a fresh environment or good organization!

  

Whether you are a shop owner or manager who does this yourself or delegates, the rewards are always positive. Try to Clean & Organize and let us know if you discover anything special! Leave some comments on the blog or send us an email…. we would love to hear from you.

My Little Inventory

Inventory is everything to a retail Tobacconist. As we wrap up the fiscal year and analyze our inventory, it is hard to imagine that something so important, precious, and vital can be articulated on a few sheets of paper. The final printout for the year is 61 pages of SKUs, descriptions, costs, and more numbers. There are some oddball figures like 23,000 matches, 740 logo guillotine cutters, 111 pipe filters, 201 pipe screens, -927 waters, and probably $20,000 (retail value) worth of stolen products – this is something the public rarely realizes, but shoplifting is a brutal reality inside walk-in humidors; plus damaged cigars! I smoke so many damaged cigars I think I could play the flute professionally since my finger muscles are so well developed…. but I digress…..

   

What strikes me every time I do inventory is just how amazing the breadth and depth of our inventory is. In my little 680 sq/ft store the (Certified) Tobacconists have to be familiar with 100+ pipe tobaccos, 300+ cigars, 22 brands of rolling papers, dozens of pipes, humidifiers, humidors…. its even too daunting to summarize; but somehow we do it. Of course, we try to have specialists for every department, but it is still an overwhelming amount of knowledge to retain.

  

Currently, TU is working with companies who realize the unique challenges Tobacconists face, and together we are researching and developing new ways to help Tobacconists stay educated about their products. While TU teaches consumers and Tobacconists directly through the University, we are also trying to influence the way the industry teaches Tobacconists and customers. Getting manufacturers and distributors proactively involved will dramatically improve the amount of knowledge Tobacconists impart on our customers and society, thereby improving customer service and satisfaction. Just imagine, if it’s hard for Tobacconists….. what are our customers thinking? Well, …. don’t worry, we are on it…. but if you have any suggestions, please let us know!

100 Year Vision

TU does have a 100 year strategy in that we are “preserving luxury tobacco for generations to come”, and we definitely intend to be a vibrant institution in the year 2108. I also like to think in terms of a 100 year vision when focusing on my retail Tobacconist businesses. First, all companies should have a Vision & Mission statement, but it also helps to think very long term. After all, nothing good or significant gets accomplished overnight and fussing over quarterly stock prices and short term goals adds little value – as our current economy indicates. I am often inspired by retail Tobacconists that have been around 25, 50, or 100+ years (some of which are now Certified!). These Tobacconists (and businesses) always seem to have deep expertise in every facet of the industry; they are always proactive; they have cultivated knowledge, inventory, and traditions that translate into superior businesses. Since 1995 my retail company’s Vision & Mission statement has been:

   
Our Vision is to be the best luxury retail Tobacconist in the world, while providing an oasis for aficionados and connoisseurs.
  
 
Our Mission is to facilitate our customer’s pleasure through the dynamic interaction of our Ambience, Exclusive Inventory, Product Knowledge, Professional Service, and Commitment to Excellence.
  
My father used to say ‘ who do you want to be when you grow up?’; actually he said this when I was an adult and he was referring to my business. And it has been helpful advice to imagine what the endgame is and base current decisions on that goal. This mentality can put the petty issues of running a business into perspective and make you focus on the important facts.
 
If you are struggling or dealing with difficult business conditions in the present, it is important to look far into the future. Are you cultivating long term customers? Tobacconists? Business relationships? Saving to buy your own real estate? Investing in the future or squandering it away? The future starts now….. so, who do you want to be when you grow up? Plant those seeds today and you will reap their benefits in the long term.

- Jorge Armenteros, CMT

Certified Tobacconist Impressions

The first step towards acceptance and credibility is to build awareness. A decade ago I had people laugh at me when I told them I was a ‘Tobacconist’. And, the society we live in barely recognizes us as a legitimate profession – most days they treat us like criminals. So, awareness is the first step towards carving out a respectable niche in our society.

  

Tobacconist University exists largely to build awareness and credibility for the luxury tobacco industry. While many more consumers visit TU than Tobacconists, we consider every impression we make a positive Certified Tobacconist Impression (CTI). CTI are created every time a consumer visits TU, thinks about TU, mentions TU to a friend, or says the words ‘Tobacconist University’. CTI are created every time TU helps somebody refill their lighter, learn how to cut their cigar, season their humidor, and enhances their appreciation of luxury tobacco: always educating and enhancing appreciation under the umbrella of “Tobacconist University”.

  

Ultimately, if you had to distill down the priceless value of TU into something quantifiable, you could think in terms of Certified Tobacconist Impressions (CTI). After all, you need something to measure and strive for when you are trying to change the culture and fighting for your freedoms. Knowing this, TU regards every Tobacconist Certification with extreme reverence. Every TU Certified Tobacconist goes into the world creating thousands of Certified Tobacconist Impressions per year; by showing customers and civilians that we are legitimate, valuable professionals. Every time a Certified Tobacconist mentions Certification, or shows their lapel pin, or posts their Certified Logo, an impression is made. Every time a human being thinks about Tobacconists as professionals a positive impression is made. In fact, every Certified Tobacconist creates between 15,000 (lazy Tobacconist) and 50,000 (not lazy) Certified Tobacconist Impressions (CTI) a year (conservatively estimated). At this rate just one thousand Certified Tobacconists can create 50 MILLION positive impressions per year. Ultimately, this simple notion of projecting and leveraging our credibility through Certified Tobacconist Impressions (CTI) is a big part of how we will “preserve luxury tobacco for generations to come”: one Tobacconist at a time, one impression at a time.

Gift Packs

Gift Packs, also known as Sampler, Variety, and/or Assortment Packs, are Tobacconist and customer favorites. A Gift Pack usually comes in a special box with a limited selection of cigars: the cigars can be a vertical, horizontal, random, multi-brand, and/or limited-edition/special-release assortment. Gift Packs can also include accoutrements like lighters, cutters, and humidifiers. We refer to them as ‘Gift’ Packs because they make great gifts and Tobacconists usually sell them as such. Consequently many companies release their special Gift Packs during the holidays. Retail Tobacconists sell more Gift Packs during December than all the other months combined.
  
Gift Packs give customers the opportunity to buy a small selection of beautifully packaged cigars without having to spend more on a standard box of 20 or 25. Astute and proactive retail Tobacconists can also create their own custom Gift Packs (see Gift Packaging) for their customers. Custom Gift Packs are a great way to tailor and add value to your customer’s experience, as well as a bona fide competitive advantage.

Cutter Etiquette

   

Cigar Cutters touch the head of the cigar that will touch your mouth; so they must be kept clean. Tobacconists must have sanitary procedures in place to keep cutters clean and protect their customers. Every day customers put a cigar in their mouth and then ask for a cut or cutter. The easiest solution for retail Tobacconists is to have two cutter options on hand: a ‘Clean’ cutter and a ‘Saliva’ cutter. The Clean Cutter should never be used on a saliva tainted cigar. The Saliva Cutter can be used on the saliva tainted cigar and sterilized quickly with hand sanitizer afterwards.

   

QUICK-STERILIZING
Standard hand sanitizing gels can be used to sanitize a Cigar Cutter and blade. Simply use your hands or a paper towel to carefully coat the cutter with sanitizing gel, remove excess, and allow to dry for a few minutes.
 
CLEANING
All Cigar Cutters need an occasional cleaning as tobacco and oils accumulate. Often, the debris and oil can inhibit the cutting and/or movement of the blades. To clean blades, apply a solution of warm water and antibacterial soap with a cotton swab or cloth, then wipe dry. Also, remove any tobacco and debris from the cutter’s frame.

Gift Packaging

Nothing adds value like free Gift Packaging for customers. And, Tobacconists already have the most precious item on hand – empty cigar boxes! Packaging gifts for customers has many benefits, including:

· Higher Customer Satisfaction
· Competitive Advantage
· Stimulates Up-selling
· Branding Opportunity
· Promotes Loyalty
· More Memorable
· More Impressive

Gift Packaging, especially during the holidays, creates more special and valuable presents. The gift-givers will remember your store and the receivers will come back for more.
 
The cigar box Gift Packaging method shown here only requires Tobacconists to purchase inexpensive paper stuffing; as you should have branded business cards, ziptop bags, matches, and cutters in stock. In addition, this gift box shows a branded sticker opportunity on the inside lid and another sticker sealing the box – these stickers can be made on store bought labels with a rudimentary computer. Get creative and use every opportunity to reinforce your brand with your customers: it will pay off in the short and long term.

TIP I: Prepare your gift boxes ahead of busy times – keep them loaded with stuffing, business cards, resealable (ziptop) bags, matches, cutters, and stickers. That way, it will only take a few seconds to prepare and your customers will be impressed.

TIP II: During the holidays, add a red bow to anything and you have an instant gift pack.

TIP III: Have branded coffee mugs made and you have an instant up-sell.

Cigar Rolling Table Plans

Cigar Rolling Table Plans

  

Every retail Tobacconist should have at least one: Cigar Rolling Tables are perfect for year- round merchandising as well as cigar rolling events. Having an authentic table, as opposed to a plastic or temporary table, is important to the roller, customers, and Tobacconists. In addition, Cigar Rolling Tables are great for special merchandising, sale items, or to be used as desks for customers, and they contribute to the authentic environment in your store.

   

Cigar Rolling Tables are distinguished by a partial top shelf (approx: 40″ high) over the standard table top (approx: 30″ high). The partial top shelf creates extra space on top for placing finished cigars, while the space underneath hides the goma, guillotina, water, leaves, and other incidentals. The following materials list and plans outline the materials and steps necessary to create your own Cigar Rolling Table. Whether you apply expert craftsmanship or rudimentary skills to this project, it will be worth the effort.

  

A Cigar Rolling Table can be made of almost any type of wood, including oak, pine, cherry, or walnut. After you have prepared your materials, you can follow these steps to assemble your Cigar Rolling Table.

*TU is not specifying what construction or carpentry techniques to use. Go with whatever skill set you have. If it’s rustic and sloppy, it won’t matter! It will just look more authentic! I built my first cigar rolling table in 1995 with plywood, drywall screws, and a little bit of dark mahogany stain: we still use it to this day! And the horrible craftsmanship only adds character.

Grow The Pie

  

Grow The Pie. That’s the point of TU. Its the purpose of education. It’s the reason for Certification. Grow the pie, Grow the pie, Grow the pie.

  

Its worth repeating because the retail Tobacconist pie has been shrinking for decades. Furthermore, perpetually increasing taxes, smoking bans, mail order, and anti-smoking legislation threaten our industry more than ever. Yet, if you converted just 10% of cigarette smokers to cigars, you would practically double the size of the cigar industry (see Smoking Stats for proof). These are profound facts!

To paraphrase the Outlaw Tobacconist Genius:

‘If you focus on growing the pie, your slice automatically gets bigger.’
  

While the luxury tobacco industry is filled with brilliant business men and women, it has been forced into self-preservation mode for decades. Companies are terrified of legislation and taxes; they hyper-focus on economies of scale, internal efficiencies, and maximizing ROI, all while margins decline, products get commoditized, and taxes increase: it’s a brutal scenario.

  

Not surprisingly, until Tobacconist University, we were practically the only industry without formalized education and certification standards for professionals. But the challenges are far from over for us. Now, Tobacconists, manufacturers, distributors, and consumers of luxury tobacco must get involved and work together to project our credibility and preserve our future.

The Bad Customer

    

While it sounds like an oxymoron, it is true; there are Bad Customers.

Some customers are disruptive to others, some steal, some are vulgar, others talk loudly, and some cause drama or complain about trivial matters. In my stores we have a written sales policy by the register and part of it says “… if you are rude, pompous, or annoying, please leave and never come back”. And occasionally we must reference this item and kick someone out. I always wanted my stores to be inviting so I decided long ago that some customers are not worth the trouble. Getting rid of Bad Customers lets us focus on the customers who deserve our attention.

    

I remember during my first month in business I asked my father ‘isn’t the customer always right?’ and he said ‘of course’ …. followed by a long pause…. and then he said “unless you are willing to lose that customer“. Well, I learned early on, some customers are worth losing. But, knowing this does not make it any easier to lose a customer. Customers are precious – and not easily replaced. Above all, our customers make a choice to spend their money with us and that is an honor, so losing one is not a decision that should be taken lightly.

   

A week ago we ‘un-customered’ someone and it has been popping into my head everyday since then. This customer, we will call “Slava” is a perennial nuisance. Years ago we asked him to stop yelling at his wife in the store and ‘take it outside’. He didn’t come in for months after that: he actually thought we were being rude. Now that I look back, I wish he had never come back… but saying goodbye to a customer is like breaking up – very difficult. Last week Slava pulled a cigar out of the cellophane and stuck it into his nostril (see picture), leaving a glossy sheen of mucous. He then paid for it, got his change, and went back into into the humidor to exchange the cigar he stuck up his nose. Well, of course this is disgusting and unsanitary so we told him he would not be able to exchange the cigar. Being the narcissistic imbecile that he is, he got angry, insulted us, and stomped out of the store. Good riddance Slava! Now you can go torture some other poor retailer for $2.69.

Ultimately, I am confident we did the right thing, but that doesn’t stop it from hurting. Again, because every customer is precious.

New Customers: Car Dealers & Motorcyclists

   

The New Customer:

Customers are defined by their Values.

Tobacconists are defined by the Value they Add!

   

Some of our best customers are car salesman and dealership owners. I can count hundreds of thousands of dollars in income from car salesmen and dealers since I have been a Tobacconist – their business has more than paid for every car I have owned over the years. These are truly special customers, for many reasons.
 
Firstly, dealership owners tend to be the embodiment of the products they sell. They are freedom loving, individualistic, and quintessentially American businessmen. This is also a pretty good description of the average cigar smoker too!

I have had several dealership owners who regularly purchased large quantities of cigars for themselves and their staffs.

Many owners and salesmen shop with us when they want to thank a [shared] customer who just purchased a car. – Maybe we should encourage our customers to tell their car salesmen that they love cigars from ‘put your store name here’.

Another benefit of the car salesman/dealer customer is the great deals. Both my customers and I have benefited greatly from these special customers – as always, cigar smokers share a special bond.

Perhaps the most interesting benefit of the car dealer customer is the event potential. I once had a formal cocktail party/cigar tasting event in the service garage of the Land Rover dealership. I must qualify that the garage was beautiful, spotless, and oddly elegant when filled with luxurious automobiles. In addition to this type of event, there are many other opportunities for marketing, promoting, and co-branding with car dealerships and clubs. Some ideas include:

• share mailing lists
• car club meetings at your shop
• outdoor booth at dealer and club events
• showcase luxury automobiles at your shop
• offer gift certificates or coupons to a dealership’s customers
• give a free cigar to new car buyers, like when a baby is born
• negotiate special offers for your customers from a dealership
• advertise in a dealership or car club brochure, internet site, or newsletter

So the lesson is…. get to know the car dealers and salesmen in your area. Find out if you can work together to better service your customers. And treat them well, as they will you.

Also, just substitute the word "CAR" with Motorcycle/Motorcyclist in this blog and you have another group to market to and with!

Exact Change! - Register Procedures

  

Every penny counts, and that is a fact. A penny per customer, per day, adds up to $182.50 loss per year; assuming 50 customers per day. If your company is lucky enough to earn 10% profit per year, that means you have to sell $1,825* worth of products to get back your one penny!

   

Giving and receiving exact change at the register is imperative. Admittedly, it can be easy to let a good customer ’slide’. But, if done consistently, this laissez-faire attitude can lead to debilitating losses. Fortunately, this is a hemorrhage that can be fixed. Remember that every penny counts and treat the register cash like it is your own. You must respect the money. Also, when dealing with money, annualize** your expenses to see the bigger picture.
 
*Calculate the ‘real’ cost of an expense as a function of profit; this will help you see the bigger picture. If you really want to get profound and depressed, calculate the opportunity cost of that $182.50. If you buy and sell that six times over the course of a year, assuming a keystone markup, that is $11,680! Every Penny Counts!
  
**Annualize: calculating expenses on an annual basis. Annualizing expenses for management and perspective purposes helps everyone in the organization see the value of not wasting, cost management, and being efficient. A dollar an hour for a full-time employee is $2,000 per year, or $20,000 worth of sales if you make 10% profit!

Co-Branding: Third Party Endorsement

   

The Third Party Endorsement is the most powerful sanction and form of approval available: this is true in both business and our personal lives. For example, there is a significant difference between your mother saying “you are smart” and Albert Einstein saying so. Things like objectivity, background, and independence influence the value judgement: “who” says “what” matters. You can spend all day telling someone how great you are, but they probably won’t listen until someone credible says it once. This is the essence and value of the Third Party Endorsement.

   

Tobacconist University Certification is the ultimate Third Party Endorsement because:

• Certification cannot simply be purchased, it must be earned.
• TU does not allow any advertising because we must control the quality of our content and standards.
• We have a Code of Ethics & Standards to articulate, promote, and project our values.
• Our academic curriculum is thoroughly researched and available for public scrutiny.
• We have an open-source academic curriculum where credible Tobacconists are welcome to contribute.
• All of our revenue streams are publicly declared; including certifications, R&D products, and our Campus Store products.
• TU is independent institution that does not receive money from any other trade organizations.

Other examples of Third Party Endorsements include: newspaper articles, being quoted in the media, ‘word of mouth’, web-links & listings, and “best of” lists. Each endorsement comes with its own gravitas, but they can all add up to priceless promotional value.

Retail Default Positions

   

According to the CRT Code of Ethics & Standards, a CRT must:

Merchandise all Luxury Tobacco Products with the same care and respect it took to create them.

  

Merchandising is the physical and visual language with which our products communicate with the customer; and it should be commensurate with the quality of the product and your store.

  

Special Merchandising involves creating a new display/arrangement which will capture the customer’s eye and generate a sale. Other times the effects of merchandising are more subtle, but it will convey that you have an organized, clean, and thoughtful approach to your products and profession. This type of Day-To-Day Merchandising has a powerful impact on your customers even if they do not consciously respond to it or acknowledge it. Good, Clean Merchandising projects professionalism. Haphazard and less-than-clean merchandising says ‘we don’t care enough’. I stress the word clean here with the intention of conveying two meanings; Clean can refer to uncluttered as well as not-dirty. Every Tobacconist knows that our stores are practically dust factories so it is imperative to keep lighters, cases, humidors, and other products polished and clean.

   

With these fundamentals already established, we can get to the heart of Default Positions and Retail Theater. In every store, every product, display, machine, chair, ashtray, and instrument has a home; a default position. Events, Receiving Inventory, Customers, and sales will all ‘disrupt’ organizational equilibrium. In fact, the unique nature of our business creates customers that ‘feel at home’ when they are in our shops. While this may be our customer service goal, it can also lead to messy stores. Customers move furniture, ashtrays, products, and anything else in order to accommodate themselves; but the ‘inmates cannot run the asylum’. So Tobacconists must be thoughtful and proactive about RESTORING DEFAULT POSITIONS. Without this attention to organization a Retail Tobacconist will degenerate into a flea market-like booth instead of the professional luxury retailer that it is.

   

In the theater, every actor and prop has a ‘mark’: a physical location where they must be at any given point in time. And Retail Tobacconists are no different. We must have predetermined strategies and layouts for our facilities to keep them from falling apart and running amok. This may seem like a small or frivolous point to a novice or inexperienced Tobacconist, but it is critical to Retail Theater. As a Retail Tobacconist with two stores, I can tell you that a big part of my job is teaching and enforcing Default Positions. If we did not do this successfully, the stores would begin to look like disheveled war zones.

   

Be disciplined about Restoring Default Positions, and if you don’t know where something belongs, ask someone who does. Put things where they belong and then you and your customers will know how to find them. Organization can really be the key to success, and with a little discipline, even disorganized people can become functional retailers. Otherwise, you might as well just sell stuff out of the back of a van*.

   

*No disrespect was meant to people who sell things out of their vans. In my teens I sold clothes and swimwear out of my van and found it to be fun and profitable. But, this guerrilla style approach to business was not nearly as fulfilling as being a Retail Tobacconist.

Tobacconists Are Human Assets

     
“The first sign of decline of an industry is loss of appeal to able people.”
- The Daily Drucker (Harper Collins 2004)
 

Ultimately, a business is only as good as its people. The success of luxury tobacco retailers is limited by how many good Tobacconists they have – I know this because I live it.

  

The Human Assets of a company are the most valuable because you can always borrow money or lease a space, but great people are hard to come by: that is the essence of Tobacconist University. That is why we are not a retailer organization, trade group, or consumer magazine. We are focused and committed to educating, training, and developing the greatest resource in our industry: Tobacconists.

  

If you ask 100 people “who are the most important people in our industry (not including consumers)?”, 99% will answer ‘Cigar Makers’. But, they are wrong. Tobacconists are the most important people in our industry because they consummate the relationship between cigar makers and customers; they bridge the gap between producers and consumers. Where would the Fuentes and Padrons be without Tobacconists? They would be lining the shelves of supermarkets, convenience stores, and drug stores. I will live [ and die ] knowing that retail Tobacconists make this industry great. That is where I fell in love with luxury tobacco, and that is where consumers do too. You can’t get to know real products through the pages of a magazine or on the internet.

  

If you own a retail shop you already know the greatest challenge is finding and retaining good people. Tobacconist University EDUCATES, TRAINS, PROMOTES, DEVELOPS, & INVIGORATES our industry’s greatest assets – a historical first! All of these benefits increase employee Value, Commitment, & Retention, improving your business and competitiveness all at once. Leverage these resources to your advantage and you will succeed. Invest in your people and the long-term rewards will be exponential! Put people first and the profits will follow.

  

Hiring Tip: Hire Passion & Smiles. All Great Tobacconists are naturally endowed with a passion for the products and a genuine desire to share that.

Fundamentals First: Products & Customers

 
It sounds simple enough, “Fundamentals First”, but it is paramount to success. My favorite cigar maker quote is from none other than Jose Orlando Padron; the simple translation is ‘you must crawl before you walk, and walk before you run, if not you will fall on your face’. Truer words have never been spoken, in my humble opinion.

  

Sr. Jose Blanco has his 5 Keys To Retail Tobacconist Success, and I think those are powerful and accurate. But I also think Tobacconist success can be distilled further into only two necessary fundamentals: PRODUCTS & CUSTOMERS. Focus on Products, Focus on Customers and you will never fail. Those are the two fundamental principles for success: PRODUCTS & CUSTOMERS. That’s all you need to know. Now, get to work….