Boutique Cigar Daily deals site concept

[specks]

I've built and sold a few companies and I want to build my next in the cigar industry. I'm trying to vet out concepts as they come up to get rid of the crappy ideas. So here's one of my ideas. Please tell me your thoughts (be honest! If the idea is crappy, help me save some money by not trying it).

I'm considering launching a daily deal site (e.g. groupon.com, woot.com, livingsocial.com, cigarmonster.com, etc) for boutique cigar brands. "Boutique" would be companies that ship less than 1.5M sticks per year, shipped at deeply discounted prices (50-75% off retail). I like the boutique brands b/c they are high quality, but have limited distribution and awareness among the average smoker.

Tell me on a gut level, how does that strike you? Would you buy a highly rated, premium smoke that you'd never heard of? How often do you think you'd buy from the site? Daily, weekly?

Thanks for the feedback!

 

[orangedog]

how do you get the 50-75% off retail? that strikes me as a red flag

 

[vivalanation734]

how do you get the 50-75% off retail? that strikes me as a red flag

what he said.

 

[iCraig]

how do you get the 50-75% off retail? that strikes me as a red flag

Hey.. we all know things fall off the back of trucks.

[ame="http://www.youtube.com/watch?v=rL1d7QmGDo8"]beverly hills cop 1, cigarette truck chase - YouTube[/ame]





To be serious though.. Depends on the smokes I guess. I tend to try and support our sponsors though if I can and while I like to try new things occasionally, I tend to just smoke what I like and I know what I smoke for the most part already.

 

[1camTEG]

how do you get the 50-75% off retail? that strikes me as a red flag

Buy Gurkhas

 

[thegoldenmackid]

how do you get the 50-75% off retail? that strikes me as a red flag

1. <quoted text>
2. There's already a retailer selling only "boutique" cigars, I think it's doing okay, but it's definitely catching on.
3. Boutiques are known to have issues keeping consistency, long list of boutiques who blew up and never came back.
4. Why would anyone buy your boutiques versus the highly-rated boutiques on CI.

My gut tells me three things:
1. You probably need to learn the industry a bit more.
2. This idea is heavily flawed from the get go. Furthermore, I'm not sure the Groupon model is one that I would use, but that's another story.
3. If you are looking to build and sell, perhaps you have a shot, tons are trying replicated Cigar Monster/Joe's Daily Deal. It's highly competitive, requires a decent amount of capital for inventory and some connections.

 

[specks]

how do you get the 50-75% off retail? that strikes me as a red flag

Negotiate it with the manufacturer. But I'm more concerned about the consumer side right now. I'm confident that a strong sales team can get manufacturers on board if there are consumers ready to buy. But if the consumers (i.e., you guys) don't care, then there's no business.

 

[specks]

3. Boutiques are known to have issues keeping consistency, long list of boutiques who blew up and never came back.

Yes it's a risk for the customer. There are some marketing tricks to get around this issue.

4. Why would anyone buy your boutiques versus the highly-rated boutiques on CI.

CI wouldn't be my competitor. CI and Famous stock mostly the big labels. Sure, there are boutiques in there too. But those big distributors seem more likel Wal Mart - competing on price and low margins so they have to stock mostly inventory that turn over quickly. There are lots lots lots more boutique companies that aren't represented on those big sites. Plus there are tons of local cigar shops that blend their own lines.

But again, I'm more interested in the demand side right now rather than the supply side.

My gut tells me three things:
1. You probably need to learn the industry a bit more.

ha no kidding. This isn't a launch tomorrow type or deal. I'm just beginning. having said that, I've sold 2 companies and I'lll be selling my third in a few years. In none of those did I know the industry beforehand. You could fairly argue that i got lucky (and let's be honest -- luck always has something to do with it). But one the other hand, when you don't know the industry, you're not burdened by the knowledge of what's 'impossible'. So you end up doing 'impossible' things. That's been my experience.

2. This idea is heavily flawed from the get go. Furthermore, I'm not sure the Groupon model is one that I would use, but that's another story.

This isn't clear to me from what you wrote. I'd like to understand where the flaws are. This is what I'm looking for.

3. If you are looking to build and sell, perhaps you have a shot, tons are trying replicated Cigar Monster/Joe's Daily Deal. It's highly competitive, requires a decent amount of capital for inventory and some connections.

These certainly aren't small problems. But there the same problems that every new company faces. competition, captial and connections. That three C's of entrepreneurship.

Thanks for the response! the feedback helps a lot.