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34TOBACCOOUTLETBUSINESSJULYAUGUST2009super-premiumcigars.x1cItx19sgoingtobetoughtox3ndagoodpremiumcigarunder2nowx1dsaidColucci.x1cBeoreSCHIPweprobablyhadsomesellingorjustaroundadollar.x1dMass-marketcigarsare100percentguaranteedx14andcanbereturnedtothemanuacturer.Premiumcigarsneedtobeproperlycaredx19orx14manuacturersdonottakethembackoncetheboxisopen.x1cInthepremium-cigarbusinessweexpectyoutomaintainthehumidityandclimatecontrolthatkeepsacigarlastingx1dCo-luccirelayed.x1cLikeagoodbottleowineapremiumcigarwilllastmanyyearsiyoutakecareoit.x1dSeesidebarx1cAHap-pyHumidorx1dp.32.Mass-marketcigarstypicallyearnmarginsox19between25percentand35percent.Premiumcigarsarecapableoproducingmuchhighermargins.x1cInthepremiummarketwerecommendkey-stone50percentmarginsorourprod-uctsx1dstatedPeterBaenningerpresidentoDavidox2.x1cHoweverweallknowtheU.S.marketisverycompetitivethecom-petitivenessallowstheretailertounder-minethemargins.x1dConsiderthespectrumox19whereyourconsumerbaseisintermsocigar-smok-ingx1ctenurex1daccordingtoGeneRichtervicepresidentox3eldsalesorGeneralCigar.Heexplainedthattruecigarlov-ersx14thosewhosmoke10to15cigarsaweekx14areatoneendothespectrum.Tesecustomerslovetotrynewthingsbecausetheyliveandbreathecigarsandtypicallyenjoyull-bodiedcigars.Attheoppositeendarethex1csocialx1dcigarsmok-ersx14x1ctheguysonthegolcoursesmok-ingonceortwiceayearx1dRichtersaid.Teywillprobablyneedamuchmildercigar.x1cSothex3rstplacetostart...istolookatyourconsumerbasewalkinginthedoorandunderstandwhereyoux3t.x1dApremiumcigarproductmixshouldbewell-diversifed.x1cakealeapoaithandgetbehindagoodmixx1dstatedJonathanDrewounderoDrewEstate.x1cYoux19llloseeverynowandthenmean-ingsomewonx19tsell.Butbeabletodiver-siyoryourcustomerbasex14youx19llbeastorewherecigarconsumerscanwalkinandeelliketheyhaveaullselectionoproducts.x1dTereisalotox19manux19acturermer-chandisingsupport.Inadditiontoox2er-ingPOSmaterialsupportmanypremi-umcigarmanuacturersareveryproactiveaboutholdingcigareventswithretailers.x1cWedoalototastingandsellingeventsmorethananythingx1dexplainedPerdomo.x1cAndwethinkitx19salotmorespecialorthecigarsmokerwhenhedigsintohispockettopurchaseandthengetssome-thingextraratherthanjustgivingawaycigarsaswex19vedoneinthepast.x1dIndustryeducationisouttherex14andamust.x1cIn-storeeventsreallyplaywellrombothaconsumerandstax2trainingperspectivex1dsaidRichter.x1cEverymanu-acturerhereox2erstrainingin-storeorinsomecasesattheactory.Tescaleandscopeothisindustryissowideyoumusttakeulladvantageoallthetools.Edu-cationputsyouinthewinnerx19sseat.x1dMultipleresourcesareavailable.Inadditiontomanuacturereducationre-tailerscanrelyonInternetinormationbooksandtrademagazinesaccordingtoAlexGoldmanpresidentoHouseoOxord.x1cTisisnotrocketscienceitx19stobaccoitx19sgrowninthegroundandwemanuacturersrollitalltogethertomakesomethingwecanallsmokeandenjoyx1dhesaid.Customerscanbeoneox19thebig-gestresources.x1cTeyknowwhattheyx19relookingorsomehavebeensmokinglongerthanyouhavex1dstatedRichter.Hisadviceisorretailerstositintheirsmokingloungeswithcustomersandasklotsoquestionsx14everythingromwhatvendorstheyliketowhatyourretailcompetitorsaredoing.x1cTatx19showyoulearnx14byaskingquestions.x1dOthertobaccooutletretailerscanbehelpx19ul.FredHoylandatobaccoDepothasoneothebestpremiumcigarrepu-tationsinthischannel.Heandothersuc-cessulcigarpurveyorsarehappytohelpnewcomerslearntheropes.x1cOnegreatthingaboutourindustryisthatpeoplearewillingtohelpotherpeoplegetintothebusinessaslongastheyx19renotopen-ingastorerightdowntheblockx1dsaidColucci.Headdedthatretailerswillbeveryhonestwithotherretailersabouttheexactcoststheyincurredbuildinghumi-dorsandstockingthem.Walk-inhumidorsareagreatx19ocalpointbuttherex19srespectx19orwallandcabinetunitstoo.x1cCabinethumidorsareanothergreatwayodoingitiyoudonx19thavethespaceorawalk-inx1dCo-luccisaid.x1cPutupanicewallcabinetandyoux19reinthepremiumcigarbusiness.x1dHailtotheBigWoodenChiex19.WoodenIndianshavegreatcigar-storeappealaccordingtoDrewwhoputoneoutsideastoreheownedinNewYorkCity.x1cIcanabsolutelytellyouthatthatisthequintessentialmoveorguyslook-ingornewpremiumcigarcustomersx1dhestated.x1cTeyseethatIndianandtheymaketheturnrighttherex14andthebig-gertheIndianisthebetter.Putitoutsideandtakeitinatnightx14thatx19sthekillermove.x1dBringonthepassion.Apassionorcigarsisperhapsoneothemostimpor-tantelementstothebusiness.x1cItx19sthatyoureallylovethebusinessthatyouwanttogopremiumx1dassertedBaenninger.x1cIyouhavepassionorityouwillbegoodautomatically.x1dTOBPuffonThisx14urbanMyThAhumorouscigarstorycirculatingintheobaccoPlusExpoaislestellsoacigarax3cionadoveryconcernedaboutcontractingswinefuyetunwillingtogiveuphisrelaxationpassion.Tisto-baccoconsumerwasallegedlyspottedinaretailerx19scigarloungewearingoneothosehospitalhealthcaremasksx14butwithaperectlygaugedcigarholecutrightthroughthecenterallowinghimtopux2awaycontentlyButisitactorx3ctionYoudecidex14andrecognizethatthehumorbehindthistaleurtheratteststotobaccooutletretailersx19growingloveocigars.