That really can be said for any business you go into for yourself. Entrepreneurship is great and it can have its benefits, but it's alot more work then most people think, and that really leads to the high rate of failure as well.
Anyone of you young people ever have the itch to open a B & M Cigar Biz?
- Thread starter SurfnSafari
- Start date
Your inventory needs are impossible to figure out that far ahead. You don’t purchase 18 months worth of inventory when opening a store, because your inventory should turn a lot faster. Typically, you decide how many facings you want in your humidor, and buy two boxes of each. I wouldn’t reccomend filling the humidor or buying too much inventory as it’s not easy figuring out what cigars your customers are going to watch. I would start with no more than 300-500 facings. Stick with brands that you know will sell, and then add facings based off suggestions or requests made by your customers. I create planograms and suggestions for a lot of my customers when they open stores. I wouldn’t invest too much in boutiques starting off as you may not have the demand for them, and if you want to create a store that does well with those products it takes time to educate your customers. If you do 400 facings that’s 800 boxes, which is roughly $80k.
One of the keys to starting a brick and mortar is to keep a distance of at least 5-10 miles from the nearest competitor.
I'd start an actual lounge with a liquor licence in downtown. There's not a decent shop within 20min non rush hour and there's a bunch of white collar business types around there. Even the other shops around are shops with a sitting area, not really a lounge.
R U in Black or Red ink. That's the important part.
StogieNinja
Derek | BoM June 2014
If I had $500k, no way I'm investing it in a smoking lounge. Grateful for folks who are willing to give it a go, but I'm way too risk averse to try that.
Also, they're banned in WA, so there's that.
Also, they're banned in WA, so there's that.
bwhite220
Brandon | BotM Jan 2038
With $500K then, you could move to a state that’s not so... yuppie.
StogieNinja
Derek | BoM June 2014
Believe me, if it weren't for relationships and family, I probably would.
...then again, I like it here. We don't have those... what do you call them... seasons. With all the snow and the hurricanes and the muggy summers...
Could I set something up in a prime location for 500k? Definitely
Would it be profitable? Probably. I haven't done any real research but there used to be a higher end cigar store, not lounge, that only shut down due to disagreement with the building owner. It's also an area of higher end bars and clubs geared towards 30+ white collar. It's the only area for nightlife for that crowd. During the day it's all offices so you'd have business that way, which is what kept the other shop going.
The biggest factor would be having a liquor licence and smoking inside. I have no idea how this state works with that. I know there are bars but who knows what kind of permits you need. It's possible that they were grandfathered in too, which means you'd have to purchase an existing business and re-brand it or create a 'private' club.
I don't know the cost of it but I could see one of the larger marinas supporting one as well, but you'd have to be either right next to it or actually in it.
Would it be profitable? Probably. I haven't done any real research but there used to be a higher end cigar store, not lounge, that only shut down due to disagreement with the building owner. It's also an area of higher end bars and clubs geared towards 30+ white collar. It's the only area for nightlife for that crowd. During the day it's all offices so you'd have business that way, which is what kept the other shop going.
The biggest factor would be having a liquor licence and smoking inside. I have no idea how this state works with that. I know there are bars but who knows what kind of permits you need. It's possible that they were grandfathered in too, which means you'd have to purchase an existing business and re-brand it or create a 'private' club.
I don't know the cost of it but I could see one of the larger marinas supporting one as well, but you'd have to be either right next to it or actually in it.
I used to think I would enjoy it, but with the way the cigar hobby changes and all of the regulations, there is no way I would invest and open one. I think self storage units would be a much better investment. Buildem, rentem and
Collect the money every month while enjoying a fine cigar. Even better than a car wash, which requires more maintenance and is heavily weather dependent.
Collect the money every month while enjoying a fine cigar. Even better than a car wash, which requires more maintenance and is heavily weather dependent.
The problem is the My step son in law was quizzing me about the "retail cigar business", he holds two business's degrees, and run a company that does 10-13 Mil., a year in sales, parts & service biz.
His take on B & M their direct competition is online discount retailers, where everything you can by at the B & M is pretty much available from some on line source cheaper.
He said honestly in 2018 customer loyalty is not what it was before the Internet where your customer bought fr4omn you because of three or for things.
Supporting local business.
Price.
Service.
Products available.
His take on B & M their direct competition is online discount retailers, where everything you can by at the B & M is pretty much available from some on line source cheaper.
He said honestly in 2018 customer loyalty is not what it was before the Internet where your customer bought fr4omn you because of three or for things.
Supporting local business.
Price.
Service.
Products available.
Last edited:
I have given this a lot of thought actually. There is a store local to me that the owner might be wanting out of. They are already profitable. I would buy that store. I would run it with customer service, reasonable pricing, and an atmosphere that is welcoming for the lounge. The interior of this shop needs a massive renovation, as the decor is old and the layout is funky. I'd knock out some walls and make the lounge area into one large smoke space.
If that option was not available, I would find a good location in Arvada (there are no shops in this area, and there should be). Same requirements as above apply to my plan. Difference here is that I would need to stock the humidor. With a fresh shop, I would start with the main players then introduce other options. Keep the prices from entry level to quality. Selection is important to building clientele.
We have two local shop taking big chances in today market place. One is going from 1500 Square Feet to over 4500 Square Feet with Wine, Beer, Private Lounge for Members, 1000 Foot Walk In. Should be nice when finished, but the down side is they are in an area that the money I think is not their to pay the expense. Plus it is rumored the private membership will be $1,500,00 - $2,000.00/yr.
Place two is moving from a small foot print to 2500 square feet, with 400 foot walk in, full Liguor, in entertainment district. Near where Hockey & Football is played. Apprently Hockey team is moving. Rent should be sky high, but they could have a chance of making it....Maybe.
Both these B & M's will be effect by Internet Sellers with bigger selections, more inventory, next day or same day shipping, and last low prices.
The Internet has become the Model T, that cause the guy making nice buggy whips, to put their horses to pasture, or eat them, and drive a car. No buggy whips needed.
Place two is moving from a small foot print to 2500 square feet, with 400 foot walk in, full Liguor, in entertainment district. Near where Hockey & Football is played. Apprently Hockey team is moving. Rent should be sky high, but they could have a chance of making it....Maybe.
Both these B & M's will be effect by Internet Sellers with bigger selections, more inventory, next day or same day shipping, and last low prices.
The Internet has become the Model T, that cause the guy making nice buggy whips, to put their horses to pasture, or eat them, and drive a car. No buggy whips needed.
Yes, the online side of the business is getting bigger, but so is the brick and mortar side. There are more new cigar stores and lounges opening every day in the industry. The problem facing b&m retailers is the overabundance of them. There are many regions where the B&M side is becoming supersaturated such as Atlanta. What the industry is seeing is that most new stores opening up are lounges that offer comfortable seating, later hours, TVs, and alcohol. These new stores are hurting the local tobacconists, who simply sell cigars and pipe tobacco. The biggest competition to b&m is the supersaturation of it. People are opening stores a few blocks away from the nearest competition. Online sales continue to grow, but consumers still need places to smoke cigars. Thus, the growth and influx of lounges with bars. To survive in the current retail environment brick and mortar stores must adapt to the needs of their customers. There were articles about this change in Tobacconist Magazine and Tobacco Business Magazine.
http://tobaccobusiness.com/members-launch-successful-private-cigar-lounge-club/
Well unles you are in Anti Friendly Smoker CA, with a 73% Tabacco Tax on the wholesale cost.
Than you have to find a City that even allow smoking in the City Limits. Believe it or not some place in CA you can not even smoke in your home if you have common wall with neighbors. Friend lives and works in California, when he come to AZ every couple of weeks (he owns home here) he stocks up on Cigars locally, or picks up what was shipped in from online retailers. So he can have Cigar to smoke in California that don't cost his first born.
Your correct if you want to survive as a B & M you have to do things to keep customers happy, to compete against online. But as I said customer loyalty to local business's is not what it was before online, email, and web-site sale came into being.
Years ago there were catalogue sales of Cigars, Pipes, etc. But you had to send away, send a check or MO, or call in your order after credit card came into being. Today the process is almost as fast as driving cross town to pick up locals, and in many cases more convent.
Some of the online retailers are excelling in customer service, because they have figured out good communication & fixing problems, and understand sales increases order volume that are or is a key to success.
Honestly people who buy over 90% of their Cigars locally at a B & M are a minority. I know most of the people in my Cigar Meetup Group buy over 50% online. Yes I understand some boutique brands or line with in a line are only available at B & M to TAA Members.
Last edited: