At the Point of Service

 

AT THE POINT OF SERVICE

Where everything that came before is either realized… or lost.

Every premium cigar represents generations of agricultural knowledge, craftsmanship, fermentation, aging, blending, and tradition.

Long before a cigar reaches the hands of a consumer, seeds are selected, tobacco is cultivated, leaves are harvested, cured, fermented, sorted, aged, blended, rolled, inspected, packaged, transported, and stored. Hundreds of hands contribute to the process. Entire lives, families, traditions, and companies are devoted to preserving and refining the craft.

But the journey of the cigar does not end when the cigar is made.

It ends at the point of service.

That is the moment where the cigar meets its ultimate consumer, and where everything that came before is either realized… or lost.

Even in the hands of an experienced smoker, the condition, presentation, storage, humidity, handling, rotation, cutting, lighting, and overall context in which a cigar is delivered will shape the experience that follows. These are not secondary details. They are determining factors.

For new and occasional cigar smokers, the stakes are even greater. Many are curious but uncertain. Some are intimidated. Others simply do not yet know what they do not know.

At the point of service, a single recommendation, experience, or interaction can either deepen curiosity and appreciation… or quietly end the journey before it ever truly begins.

This is why the tobacconist matters.

The perspective, judgment, and standards required at the point of service are not acquired overnight. They are forged through years of experience, accountability, problem-solving, and continuous learning.

Great tobacconists are not born. They are forged through fire, ember, and ash.

The tobacconist stands at the intersection between generations of craftsmanship behind the cigar and the consumer who ultimately experiences it.

At that moment, they become the custodian of everything that came before and the gateway to everything that follows.

The work of the farmer, the fermenter, the blender, the roller, and the manufacturer is either honored and fulfilled through proper execution… or compromised before the cigar ever has the opportunity to express itself as intended.

This is why standards matter.

This is why education matters.

This is why service matters.

The role of the tobacconist is not simply to sell a product. It is to preserve and elevate the experience that generations of craftsmanship worked to create, while helping carry that culture forward to the next generation of cigar smokers.

Tobacconist University was built around that exact philosophy.

Not around passive learning, empty titles, or superficial expertise, but around the real-world execution of knowledge at the point of service, where the industry ultimately becomes real for the consumer.

Because in the end, everything comes down to that final moment:

where the cigar meets the consumer,

and everything that came before is either realized… or lost.

Become part of the culture preserving and elevating the cigar experience.

On Government Regulation & Legislating Taste

How do you feel about Government regulation of cigars?  The challenges are staggering for the premium tobacco industry, and retail tobacconists are on the front lines of this battle for taste and freedom: FDA, S-CHIP, Smoking Bans, smoking restrictions, OTP taxes, import duties, small cigar taxes, snuff/snus taxes, cigarette taxes, local/city/state regulations, and many many more...

In a rare, unprecedented, and exclusive interview, Jorge Armenteros, CMT, founder and president of Tobacconist University, sits down to discuss TU, R&D Cigars, the IPCPR, and everything in between. The full interview will be released over the coming weeks and months... stay tuned!

What's Ailing Cigar Retailing

What's Ailing Cigar Retailing

by Bob McDuffee

 Modern cigar retailers face a number of challenges to survive or prosper in this age of restrictive smoking polices, increasing taxes and declining economic circumstances. As you would expect, none of them look forward to raising prices and losing customers. However, amidst the predictable angst is another, perhaps more sinister, sign of trouble for our beloved neighborhood tobacconist. In recent months I have spoken with both traditional neighborhood retailers and Internet retailers about the challenges they face in attempting to prosper or survive. What I have discovered is that the threats to retailers come both from poor policy decisions by manufacturers and from within the retailing industry itself.

     Traditionally, cigar manufacturers have relied on neighborhood retailers to provide promotional support for the facings through direct customer contact and service. In return for the loyalty of a retailer, manufacturers would offer special purchases, floor planning (financing) of stock and in-store event support. As the economy has nose dived and smokers have been openly vilified, the pressure on neighborhood retailers has caused a crisis in retailing. Retailers are failing at an ever increasing rate as a result of these economic and social pressures but to make the matter even more difficult, they are now being undercut by some of the very organizations they serve, the manufacturers.

     Manufacturers and, to some lesser degree, distributors have traditionally exercised a form of self policing that prevented larger retailers from gaining an unfair advantage over the smaller retailers by implementing price protection policies that limited any one retailer’s ability to heavily discount the product. My research has revealed that today these limits may no longer be enforced against large volume retailers, particularly those selling on the Internet. In fact some manufacturers are now turning their backs on the small retailers in favor of the massive volume resellers that populate much of the Internet. In my discussions with retailers, I have learned of a technique used by some large retailers to secure huge discounts and access to restricted lines of cigars. As it was explained to me, a retailer (either Internet based or traditional storefront) will order large quantities of cigars that exceed the volume of their operation. Then the excess inventory will be sold “out the back door” to other retailers that may not be authorized for that line or that will move the cigars quickly by offering substantial discounts to consumers that exceed the manufacturers limit. The manufacturer provides terms of 60 to 90 days for payment thereby financing these questionable trade practices. The original retailer receives a small percentage of the sales price for their part in the trans-shipment of the product and the lucky recipient of the illicit merchandise then sells at a heavy discount making up in volume and very low overhead costs for the slim margins. With no store front or sales force to support, these retailers are able to realize significant profits. This practice hurts the neighborhood retailer by undermining the street value of the discounted cigars and it hurts smaller manufacturers that cannot offer the flexible payment plans available from the much larger manufacturers.

     In other conversations with boutique (small volume) manufacturers, I have been told of cases where a smaller manufacturer is offered the opportunity to sell a large volume of their product to a large Internet retailer only to see the product later sold at substantial discount so it can be cleared out of inventory quickly. This has long term consequences for the small manufacturer by again, undermining the street value and perhaps the reputation of the cigar as a premium product. It can also result in a shortage of the small manufacturer’s product in traditional retail channels. My conversations with retailers has also indicated that although manufacturers are aware of these practices, many simply ignore them in order to continue doing volume business with the offending retailer.

Keystone Is Keystone

Keystone, as defined by Merriam-Webster dictionary, is “something on which associated things depend for support” and “the wedge-shaped piece at the crown of an arch that locks the other pieces in place”. Without the “keystone” in the latter definition, the structure will collapse. This is also the case with our industry’s Keystone Margin: without retailers having the ability to make a reasonable markup, we will collapse. Retail Tobacconists cannot make enough money to sustain themselves without a reasonable markup on single cigars. Anything less than Keystone results in the commoditization of our products, declining margins, and ultimately ‘going out of business’ sales.
 
As a retailer, I do not sell any products that are not Keystone, nor am I interested in supporting any company that does not support my ability to make enough money to survive. Obviously, mail order and internet operations thrive on non-keystone products and deals: they exist to thrive on and undermine the brick and mortar (B&M) keystone marketplace. And our economy proves this is a viable strategy for growth – just look at the big box retailers and discounters in every community. But this market thrives on reducing quality and diversity in exchange for cheap homogenized products. One of the worst and most damaging examples I can think of is the Shop-Rite supermarkets here in NJ, where they have a large selection of premium cigars at retail prices that are unbelievably cheap. I, of course, refuse to shop there. But I am not single-handedly able to make any kind of impact on their bottom line. Obviously manufacturers should refuse to have their premium handmade products sold next to shaving razors and tampons. So what are they doing about it???
  
Ultimately, the Keystone Margin is that which B&M Tobacconists ‘depend on for support’. And if we want to see our industry get new customers, introduce new and innovative products, and survive, we must protect B&M Tobacconists, which means protecting our margins.
 
This year the Supreme Court ruled that manufacturers do in fact have the right to establish a minimum retail price for their products. Lets hope our vendors have the chutzpah to protect their retailers, sacrifice a little in the short-term, and preserve our industry for generations to come.