Retailer pricing constraints?

[The Green Monkey]

I was at a shop yesterday in a high-rent tourist-trap sort of place that had really, really absurd prices and it got me wondering whether companies put any sort of upper limit on how much over MSRP their vendors can charge. Is there anything, whether formal or informal, that manufacturers do to discourage gouging or radical price overinflation by shops?

In addition to charging $11.99 for an AF Best Seller, $19.99 for a Signature, $14.99 for a Cuban Belicoso SG, $300 for the Journey to Chateau de la Fuente, $60 for a GOF tubo, $60 for any single from the Opus 22 set, etc., these assbutts were also storing their full line of Acids in the same humidor as all of their sub-$20 Fuentes.

I mentioned to the clerk why they shouldn't store Acids with regular cigars but it met with an indifferent seeming promise to tell her manager.

 

[NorcalMark]

There are many factors that can contribute to higher prices from store to store.

1. Rent. if you pay 10,000 in rent a month cigar prices will be higher.
2. Do they buy their cigar from the manufactures or from a distributor. Someone other than buying direct. Prices tend to increase the more hands the cigars touch before making it to the store.
3. Greed


Once the cigars are sold to a store the distributor can't say what they must sell it for. Higher or lower than the msrp. They can choose not to sell to that particular but legally they can't tell them what to sell it for.

Mark

 

[Guitar_Gatler]

Mark said it. There are a lot of factors that contribute to high prices, but to answer your question, no. Manufacturers don't care how high your prices are. The only price restraints placed on products, to my knowledge, are those placed on advertised prices to keep them ABOVE a certain price point(MAP Pricing).

 

[Gonz]

There's at least one manufacturer I know that says they don't tolerate gouging, but they never do anything about it when it's reported to them. They even have a way via their website to report such vendors.

 

[uptown_isy]

There's at least one manufacturer I know that says they don't tolerate gouging, but they never do anything about it when it's reported to them. They even have a way via their website to report such vendors.

And just as you said, nothing is ever done about it.

 

[The Green Monkey]

Right on. I assumed as much but thought there might be an upper limit to what is tolerated. The place is definitely in what I assume to be a pretty high-rent location.

Boosting the crap out of the HTFs is one thing, but $12 Best Sellers and $15 SGs seemed to be a horse of a different color--especially when they've got a little extra Acidity to them...

 

[B.L. Sims]

Generally the only constraints that are put on retailers are not a ceiling, but a floor. Im in a totally unrelated industry but we have at least 2 suppliers that require we do not fall below a certain markup. I guess they want all of their to be pretty even across the board and nobody undercuts the rest. For most products people are free to charge as much as they want if they can find a sucker willing to pay the price. Take for example a $7 hotdog or at $10 hamburger thats sold at a ski resort.

 

[StinkiMonki]

Pricing can be a strange beast and is certainly going to vary for some of the reasons listed above. For anyone who's been to my place know we would never ever survive on cigars/accessories alone. I'm luck in that I have a full bar. The margin on alcohol is MUCH greater then on cigars. With probably the exception of the cigars delivered by Prometheous, i'd like to think that my prices are low for California. And of course, since Prometheous is in CA and distrubutes to me I am taxed 45.13% right out of the gate. When I ship from out of state I'm not required to pay the CA tax up front, just upon the sale of the stick so it becomes somewhat distributor specific. I'm shooting for anywhere from 33-44% margin on cigars with most coming in closer to 40%. The object of my establishment is clearly to get people to return and STAY in the back lounge for a drink or 5.

There was something else I was going to say that I thought was really informative but I can't remember what it was. I'll come back and edit this as soon as I remember. LOL

Geoff

 

[Nicklor]

That's real sad, especially if your a newbie just getting into the hobby and learning about everything. I'm just glad, and lucky to have a great source here with CP which keeps me updated and educated so I won't have to worry about price-gouging.

Thanks to all the vendors here.

Nick