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62TOBACCOOUTLETBUSINESSMAYJUNE2010lookingtotradedowntolower-pricedbrands.Testoresusedtogiveawaycalendarsmugshatsandshirtsemblazonedwiththesmokeshopsx19logo.Teystoppedtheseprogramsatercustomersseemedtopreertheless-expensivelightersasgiveaways.CowanalsowondersitheFDAwillrestrictgiveawaysintheuture.Cowansayshepreerstoleaveloungesandotherupscaleamenitiestothecigarloungesdowntown.Hebelievesthattheindustrybenex1tsromstoresthatocusonalltypesocustomers.x1cWedonx19twanttogrowourbusinessbyputtingothersoutobusiness.Wecompeterelativelyaggressivelyonpricebutwearenotouttogrowthatway.x1dTestatesalestaxisincorporatedintothepricesatthestoreCowansaysandthetribedoesnx19thaveanunaircompetitiveadvantageoverotherretailers.x1cTatx19srequiredbythestatex1dCowansays.x1cAndwedonoInternetsaleswhatsoever.x1dAtthetimeotheTOBinterviewinearlyMarchtheU.S.SenatehadjustpassedthePreventAllCigarettex1crafckingPACx1cActwhichwouldrequireonlinetobaccomerchantstopayallapplicabletaxesoncigarettesincludingRYOandsmokelesstobaccoproductsshippedtoastatemandateage-verix1cationtechniquesandprohibitshipmentsusingtheU.S.PostalService.Cowanwashappy.x1cAsatribalentitywedonx19tbelieveinInternetsales.InactIx19mverymuchopposedtoit.Tisiswonderulnews.x1dEditorx19sNoteTePACx1cActhassincebeensignedintolaw.CowansayshisoppositionstemsromhisbeliethatInternetsalescauseproblemswithunderagesalesmisleadcustomersintothinkingthattheyarenx19tresponsibleorstatetaxesandpromotecreditcardraudinwhichcriminalsusestolencreditcardstopurchasecigarettesandresellthemontheblackmarket.STAYINGONTOPTetribehasnoplanstoexpandwithnewstores.Overalltheocusorthisyearhasbeenoncustomerserviceandmakingsureawidevarietyoproductsiskeptinstockatalltimes.x1cWewanttomaintainwhereweareatx1dCowansays.x1cWex19vehad40percentgrowthoverthelasttwoyears.Wewanttomaintainthat.x1dEmployeeeducationhelpsosterexemplarycustomerserviceCowansays.Hex19searnedhisCertix1edRetailx1cobacconistcertix1cateromx1cobacconistUniversityaneducationalandcertix1cationprogramorproessionaltobacconistsorganizedbytheInternationalPremiumCigarPipeRetailersAssociationIPCPR.x1cwentyoCowanx19semployeeshavealreadysigneduptoollowhimintheprogram.InadditionCowaniscommittedtomakingsureallemployeesattendatleastonetrainingsessionoreducationalprogrameachyear.x1cIbelieveintheeducationomyemployees.Wehavegoodtrainingprogramsx1dhesays.x1cAndthetribeisverysupportiveoeducation.x1dCowansaystheocusoneducationtrainsmanagerstohelpemployeesgetthemostoutotheircareersanddeepproductknowledgehelpsemployeesbetterservethestorex19scustomers.IacustomercomesinandasksoraMadurocigarx14adark-coloredcigarwithanagedsun-ripenedwrapperx14theemployeesknowwhatheistalkingabout.Iacustomercomesinandsayshenormallysmokesapremiumcigarettebrandbutneedstosavemoneythestorex19semployeescanpointthecustomertoacomparablevaluebrand.WhenaskedorhisviewontheutureothebusinessandtipsorotherretailersCowansaysheseesthebestgrowthopportunitiesortheindustryincigarsascigarettesalesaregoingtokeepdeclining.x1cosurviveCowanbelievesstoresshouldeithercatertohigh-endcustomersandeatureservicessuchasliquorsalesandcigarloungesorocusonaggressivepricingandvolumecombinedwithgoodcustomerservice.x1cCigarettesareapennybusinessx1dheadds.Outletownershavetostaycreativetocompetehesays.x1cTeycouldblendtheirownpipetobaccos.Teycouldthrowspecialeventsorcigarsordinnersoreventswithcigarrollers.Watchallyourcategoriesobusinesstreatthemallequallywhetheritx19scigarettesRYOcigars.Developane-maillistocustomers.Itx19sabsolutelyreeandeasytodo.Itbuildsyourloyalcustomerbase.x1dx1cx1cobaccoisashrinkingindustry....Itx19snotgoingtogrowx1dCowansays.x1cButtheindustryisnotdeadbyanymeans.x1dTOBApproximately15percentox1cthesalesfoorisdevotedtoRYO.Asatellitestoreislocated20milesnorthox1cLasVegas.