Page 37 - TOB Magazine March/April 2013

80
TOBACCO OUTLET BUSINESS
MARCH/APRIL 2013
trench marketing
tobacco retail business six months
ago.
“I needed a new job that would last
me another 15-20 years and, having
been in retail for quite a few years,
I jumped at the opportunity when I
saw that the tobacco store that had
been here was closing down,” he
says. “There’s not much here aside
from river rafting outfits and a small
grocery store, but people still want
their tobacco. Plus, I saw that the
store that was here was making a
big mistake that I wouldn’t make.”
Namely, his predecessors had
employees.
“The previous store simply
couldn’t make money because the
guy who owned it didn’t want to work
here,” he explains. “But once you
pay employee taxes and wages, it’s
hard to make a lot of money at end
of year, even if you’re successful. My
formula is that I’m the sole proprietor
with no employees, so I don’t have
to pay employee taxes. This shop
only has to support one household
instead of two or more.”
But every silver lining always has
a cloud. “That means I’m always
working,” Ballow admits, but instead
of opening early and staying open
late to accommodate potential
customers wandering in, he has stuck
to standard hours. “You don’t want
to run yourself down unnecessarily
or rely on unpredictability,” he says.
“You’ve got to train your clientele.”
And while Ballow is very clearly
a businessman at heart, he’s not
looking to make a killing off of
his clients or build a monolithic
industrial complex with his store.
“The idea in this small town is not to
get rich, it’s just to make a living,” he
says. “Everyone here will tell you, ‘If
your store can clear $40,000 per year,
you’re doing really well.’”
Keeping it real… and small
Paul’s Pipe & Tobacco is a relatively
modest wood and stucco storefront
building, even by the standards
of a town that prefers not to have
sidewalks. Its showroom is roughly
400 square feet in size, which is
small even by small-town standards,
but still large enough for Ballow
to display a variety of cigarettes
and cigars—both inexpensive and
high-end lines—as well as pipes,
pipe tobacco, and an abundance
of roll-your-own product. “To be
straightforward about it, there are a
lot of poor folks living here, so RYO
is quite popular,” he says. “Out of my
total sales, RYO probably accounts
for 33 percent.”
Due to the minimal affluence in
the area, Ballow trains his focus on
volume rather than pricing. “I do
make a profit on everything I sell, but
I’d rather grow my customer base.
There are about eight small towns in
this mountain valley, so what I focus
on is maintaining the best prices in
valley. I want to get all of that volume
and make my money there rather
than by digging into everyone’s
pockets. It’s simply not a wealthy
community, so you have to be smart
about it.”
Ballow admits that the transition
from engraver to tobacconist
represented a steep learning curve,
“To be straightforward about it, there are a
lot of poor folks living here, so RYO is quite
popular. Out of my total sales, RYO prob-
ably accounts for 33 percent.”