94 / 102
3.
mild, but “still pretty mild; yellow is caution, being me-
dium-to-full-bodied; and red is full-bodied,” he explains.
It’s a dot system that the store puts on the cigar labels
with a corresponding laminated information sheet made
available in-store. “There are so many variables depend-
ing on what you had to eat or drink, but these are general
guidelines and our customers love it,” he says.
The store does something similar with beer, whereby
IPAs are labeled as a particular color, Stouts are labeled
as another, etc. The wine is simply categorized according
to varietals.
PARTY STORE HIGHLIGHTS
HUMIDOR/SPIRIT TASTINGS
The Party Source is a standalone superstore in Bellevue,
Kentucky that sells all the major components needed to
throw a party, including, of course, the dynamic duo:
alcohol and cigars.
Liquor sales, which constitute 50 percent of the store’s
business, “give us the ability to do our cigar sales volume,
thanks to liquor’s pricing and volume. They feed off of
each other,” explains Josh Heaps, purchasing supervisor
and humidor manager. “We have lower prices on cigars
than the average cigar shop, thanks to the liquor. Econ-
omies of scale come into play here; we can run on lower
price points and get higher volume on cigars.”
Liquor sales definitely run on lower price points and
high volume, too, but it’s being squeezed by distributors
doing fewer deals than they used to, according to Heaps.
“Liquor gross margins are somewhere around 25 percent
here,” he reports. And that’s partly because the store lies
right up against the border of Ohio, which has gotten
more competitive lately and gotten more aggressive on
liquor pricing. Margins have also been squeezed by Kro-
ger, another force in the Cincinnati backyard putting a
lot of pricing pressure on local wine and liquor stores.
But The Party Source has a unique merchandising spin,
with the operative word being “party,” which is further
enhanced by combination liquor/cigar displays. “There’s
uncaptured business out there, which we intend to attract
somewhat with cross-merchandising,” says Heaps. As ex-
amples, the store humidor now features a facing of rotating
liquors; there’s also a tasting bar right outside the humidor.
Inside the humidor at press time, an 18-year-old $89
Don Pancho rum was being featured. “It’s an easy pair-
ing with cigars, so we put it in there so we could easily
talk to our customers about it,” Heaps explains. “Before
that, there was a lower-priced rum that in just three
weeks, myself and the other cigar guys sold about 30
bottles as add-on sales. We will leave the Don Pancho
rum in there until something else captures our attention.
We don’t just put anything in there; we put what we like
and what sits well. We will put a new private-label bour-
bon in there soon; we are definitely trying to increase the
transaction amount. They’re already typically buying
$50 worth of cigars, so adding a $30 bourbon is a win-
win. But the important thing is, we always make sure it’s
something we like and enjoy ourselves. We have never
broken that level of trust with them.”
As for the tasting bar right outside the humidor, “we
usually do higher-end liquors and crafts,” he says. “If
someone is on the fence, we grab them a half-ounce pour
of it, and that often seals the deal.” The location often
inspires cigar customers to purchase something unique
on their way out of the humidor. Tastings are allowed
any time of the day, but Kentucky law limits a total of
four half-ounce samples per customer per visit. Stores
like The Party Source used to be able to charge for big-
ger and more tastings, but not currently.
The Party Source also does weekly cigar tastings, team-
ing up with a local bar called The Beer Sellar. “Those tast-
ings account for about 10 percent of our cigar sales for the
year, and it’s only three hours of our day, once a week,”
reports Heaps. The store puts together cigar-tasting bags
ahead of time, consisting of three cigars for $15.
“We start with that; we’re basically selling the cigars at
our cost, but they get to try three cigars at a cheap price.
Then we offer them deals on everything that night, so
any full box they buy, they get five free cigars, 12 raffle
tickets and other ‘schwag.’ It reduces their risk to try ci-
gars, and our off-site partner can sell liquor.”
Heaps also partners with a local distillery in northern
Kentucky, Second Sight Spirits—the owner is a loyal cus-
tomer of The Party Source. So at the cigar events, the dis-
tillery owner samples products at the bar for free. If some-
body likes a particular sample, he sends the product to the
The Party Source, where customers can purchase it. “We
have to get creative with liquor sales like this,” says Heaps.
Cross-merchandising cigar events like this are a lot
easier to manage off-site, Heaps explains. “We basically
just show up with cigars. We get to focus on selling cigars
and not the logistics of running the event. We don’t have
to set up chairs and tables; we don’t have to clean up. So
it’s a good deal for us and a great deal for our partners
and customers.”
TB
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We start with
that; we’re
basically sell-
ing the cigars
at our cost, but
they get to try
three cigars at
a cheap price.
Then we offer
them deals on
everything that
night, so any
full box they
buy, they get
five free cigars,
12 raffle tick-
ets and other
‘schwag.’ It re-
duces their risk
to try cigars,
and our off-site
partner can
sell liquor.