Wholesale/Direct from manufacturer prices?

[MidwestRetro]

Just out of curiosity with the rising taxes in the last couple of years and cigars getting taxed at about 50% of the wholesale cost of cigars coming into the United states, after you add in the cut the distributor gets and the tax the retailer has to pay along with their margins has anyone had success in getting cigars directly from the manufacturer or getting wholesale prices? I would rather get boxes for less than 1/2 of what we are currently being charged so I could spend what I would have saved at B&M stores to keep the culture alive.

 

[multi-useless]

I’m guessing that the manufacturers are big enough that they dgaf about selling a box at a time direct to consumers. And there’s probably some laws involved that they don’t want to taunt, about shipping a taxable and restricted product across international borders...

I’d like to get my cigars for less too, because I like money! But so does everyone else, govt included. So if it’s taxes you don’t like, switch to Cubans. Buy them from vendors in Switzerland and Hong Kong. If you need to ask where exactly, do it on Facebook, not here. On the one hand you’ll be supporting the oppression of a communist regime in another country, but on the other hand, at least you’re not supporting the ideals of a nanny state at home - instead, you’re supporting freedom! And ultimately, isn’t it our freedom that inspires the world? It is, and you can be a part of that - kinda like Pauly Shore in that biodome movie - think globally, act locally. By not paying taxes on your cigars. It’s a win-win situation - a victory for your humidor, and a victory for freedom!

 

[Boudie]

Avoiding taxes is an American tradition. Our nation was founded on it! From moonshining to cash only employment to creative income tax preparation if you don't try you are not a patriot! You can grow and roll your own tobacco, you can buy overseas and maybe have the package go through customs without issues or you can travel and bring boxes in without excise taxes within limits.

With the power of computing maybe someday in the future the distributor, retailer network will be replaced with a direct from the manufacturer system but we are not their yet.

 

[MidwestRetro]

Aside from taxes, let's just assume the wholesalers pay less than half of what we get charged. Taxes aside, we could all benefit from paying less for online cigars. Online retailers only benefit themselves while slowly killing off the B&M's and local community and culture. Perhaps if we found a way to get wholesale or direct manufactured prices and developed a catalog we could schedule a group buy and all come out ahead.

 

[Boudie]

"Aside from taxes" is a dangerous first assumption.

If I remember the breakdown correctly

about 30% of a $10 cigar is taxes of some form. Since no one figures their profit on tax let say after taxes that $10 cigar is $7
of that

grower gets about 10% $0.70
processing and rolling 25%

 

[Boudie]

Sorry I can't delete the post I hit the return button a couple of times and the darn thing posted

I think the breakdown on a cigar is
Grower around 10% if not less
Roller and manufacturer around 25%
Distribution around 15%
retail shop around 50%

They add about 30% in taxes

a $10 cigar would sell for $7 without taxes
The grower would earn about but usually less then $0.70
The manufacturer about $1.75
distribution about $1.05
retail shop about $3.50

These figures are based on a discussion I had with a rep and are only as good as my memory.

 

[ChuckMejia]

Lol, no.

 

[ChuckMejia]

Ok I’m bacK

so you want to get stuff at whole sale?

do you think you could get a car at whole sale price?
Or an iPhone at wholesale?

You’re a consumer, not a business

I would recommend you stick with the more budget friendly stuff

 

[soonerwings]

Setting up an LLC and getting a tobacco license (retailer) is fairly simple and cheap, at least in Oklahoma. Marketing/Ordering/Selling product is the difficult/expensive part.

Heck it’s fairly simple to get a wholesaler license as well now that I think about it.


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[MidwestRetro]

Setting up an LLC and getting a tobacco license (retailer) is fairly simple and cheap, at least in Oklahoma. Marketing/Ordering/Selling product is the difficult/expensive part.

Heck it’s fairly simple to get a wholesaler license as well now that I think about it.


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Wouldn't be interested in selling cigars, never mix buisness with pleasure. I'm interested if anyone here has already went down this route.

 

[ChuckMejia]

No, i don't think anybody here has done it. And i don't think any cigar brand will sell you a box or two at wholesale.

Get online and find deals, it isn't that hard.

The time you spent making this post couldve landed you a good 40% off msrp deal.

 

[soonerwings]

No, i don't think anybody here has done it. And i don't think any cigar brand will sell you a box or two at wholesale.

Get online and find deals, it isn't that hard.

The time you spent making this post couldve landed you a good 40% off msrp deal.

To be fair, I’ve done it but I let my license expire and killed off the LLC. It was too much hassle that I didn’t have time for. It’d be fun to do again some day as a retirement hobby.

Buying stuff at wholesale is easy enough, but buying direct from a manufacturer usually requires a fairly large minimum order.


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[MidwestRetro]

To be fair, I’ve done it but I let my license expire and killed off the LLC. It was too much hassle that I didn’t have time for. It’d be fun to do again some day as a retirement hobby.

Buying stuff at wholesale is easy enough, but buying direct from a manufacturer usually requires a fairly large minimum order.


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What license exactly do you need and where would one go to get one? My state offers tons of different tobacco license but I cant decided which one that will allow me to get deals from wholesalers/manufacturers

 

[ChuckMejia]

@ar2381 your input plz

 

[soonerwings]

What license exactly do you need and where would one go to get one? My state offers tons of different tobacco license but I cant decided which one that will allow me to get deals from wholesalers/manufacturers

The first step you need to do is decide what type of entity your business will be. I chose LLC for it’s liability shielding and pass through income.

Regarding licenses, in Oklahoma you can get the necessary application packages from the tax commission. Getting a retailer license enables you to buy from wholesalers,while getting a wholesaler license allows you to buy from manufacturers. You can get both and have your wholesale business sell to your retail business.

Every state has its own laws and taxation policies. Learn yours before you set up shop.

Purchasing as a business means you are planning to sell to the public. Setting up a business to get better prices on products for yourself can get you in some hot water with the state. I don’t recommend it.


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[Glassman]

Have you heard of cigar auctions?

 

[MidwestRetro]

The first step you need to do is decide what type of entity your business will be. I chose LLC for it’s liability shielding and pass through income.

Regarding licenses, in Oklahoma you can get the necessary application packages from the tax commission. Getting a retailer license enables you to buy from wholesalers,while getting a wholesaler license allows you to buy from manufacturers. You can get both and have your wholesale business sell to your retail business.

Every state has its own laws and taxation policies. Learn yours before you set up shop.

Purchasing as a business means you are planning to sell to the public. Setting up a business to get better prices on products for yourself can get you in some hot water with the state. I don’t recommend it.


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Thank you for your help in this matter, I appreciate the advice as well. Surely the state will understand my buisness model of purchasing cigars for the purpose of aging them for 20-30 years with the occasional cigar to be tested for quality purposes. Should the buisness go under before 30 years have accumulated, that will just be the cost of doing buisness.

 

[MidwestRetro]

Have you heard of cigar auctions?

Yes but knowing there is a 200 percent markup we pay and these auctions ain't running by losing money, I would rather cut out the middleman in order to smoke higher quality for a more affordable price and have money to support B&M. I am a working man after all.

 

[Glassman]

Yes but knowing there is a 200 percent markup we pay and these auctions ain't running by losing money, I would rather cut out the middleman in order to smoke higher quality for a more affordable price and have money to support B&M. I am a working man after all.

40 - 60% off isn’t good enough for you? 200% would be gurkhas at a b&m, not online discount sales... They’re not making a ton of margin on that, it’s a loss leader, the money is made on the people that overbid.

Unless you’re starting a business you’d be penny wise and pound foolish. You’d be spending far more in time , effort and total cash outlay , and end up with a bunch of sticks you didn’t need, trying to do it the way you’re outlining.

 

[multi-useless]

40 - 60% off isn’t good enough for you? 200% would be gurkhas at a b&m, not online discount sales... They’re not making a ton of margin on that, it’s a loss leader, the money is made on the people that overbid.

Unless you’re starting a business you’d be penny wise and pound foolish. You’d be spending far more in time , effort and total cash outlay , and end up with a bunch of sticks you didn’t need, trying to do it the way you’re outlining.

Don’t crush the dream Jeremy, he’s determined. And I kinda wanna see this play out now