Cigar Flipping Discussion (moved from La Escepcion Thread)

[Pixa]

I see what you are saying and agree that's at least highly questionable.

The type you are describing here, however, rather appears to be professional – who else would scoop a complete release from the primary market? I'd guess that would not apply to a single one of the members here. At least hardly possible in a Cuban special ed. with the average 2 to 5,000 boxes. Even in lower numbered special humidors, it would be quite an investment. I actually never happened not to be able to get my hands on a desired Cuban release from retail, irrespective of how scarce it was. Yes, sometimes you’ll have to work for it and announce early interest.

However, all that being said, there is no one else to be blamed for that kind of flipping habit than the distributors and retailers of said editions themselves, they have it in their hands:

It is certainly not in the interest of retailers allocating a disproportionately large share of the value creation chain to the odd flipper. In the end, such just drives overall prices, minimizes retailer’s profit and will eventually turn off people from the product. A very easy and really simple measure to avoid that – as is quite sensibly done in my country by many retailers – is occasionally limiting the allocation of scarce editions to only one or two boxes per client.

That way, glutton flippers are easily famished.

I don't get how it's now the retailer /distributors fault now? They have a product and they have a set price there allowed to sell it for no discounting or price increase allowed how is it in there best interest to limit the amount buyers can purchase?

[Fugu]

I don't get how it's now the retailer /distributors fault now? They have a product and they have a set price there allowed to sell it for no discounting or price increase allowed how is it in there best interest to limit the amount buyers can purchase?

Ok, then I may propose you simply re-read my post, Pixa…

But will try and explain again: I was aiming at the heavy type of flipping habit. The type that Rob so fittingly defines as type A in his post. This one can easily and only – and perhaps needs to? – be cut on retailer’s end!

If a retailer would go and sell his complete stock of a certain product item (here: a limited and sought-after product) to only one or two, or perhaps a few say even 5-10 buyers (as exemplified and rightfully criticized in the post of wabashcr), just for having their shelves cleared quickly and for immediate roi, then there is something going very, very seriously wrong!

The term “retail” implies that it is not “wholesale”. If you check up Wikipedia you will learn the term derives from the old French ‘tailler" meaning “cutting off”, “dividing”, and since the Late M.A. up until today “retail” has always been used in the meaning of “selling in small quantities”. The primary aim of a retailer therefore is caring for the single buyer. That’s his main job and that builds the added value for the client.

Therefore, a responsible merchant, interested in a sustainable and fruitful long-term relationship with his clients, will make sure that a certain release will be made available to as many customers as possible. Pixa – that is no crazy idea by myself, this is something that is actually being practised by serious merchants. And that for good reason and to their own advantage, as I tried to outline in my post above.

Paul

[Pixa]

Ok, then I may propose you simply re-read my post, Pixa…

But will try and explain again: I was aiming at the heavy type of flipping habit. The type that Rob so fittingly defines as type A in his post. This one can easily and only – and perhaps needs to? – be cut on retailer’s end!

If a retailer would go and sell his complete stock of a certain product item (here: a limited and sought-after product) to only one or two, or perhaps a few say even 5-10 buyers (as exemplified and rightfully criticized in the post of wabashcr), just for having their shelves cleared quickly and for immediate roi, then there is something going very, very seriously wrong!

The term “retail” implies that it is not “wholesale”. If you check up Wikipedia you will learn the term derives from the old French ‘tailler" meaning “cutting off”, “dividing”, and since the Late M.A. up until today “retail” has always been used in the meaning of “selling in small quantities”. The primary aim of a retailer therefore is caring for the single buyer. That’s his main job and that builds the added value for the client.

Therefore, a responsible merchant, interested in a sustainable and fruitful long-term relationship with his clients, will make sure that a certain release will be made available to as many customers as possible. Pixa – that is no crazy idea by myself, this is something that is actually being practiced by serious merchants. And that for good reason and to their own advantage, as I tried to outline in my post above.

Paul

Ok a retailer buys a hundred boxes at 200 each so they have invested 20000 in the hope to make a return of 30000 say. (Now these figures are just fiction) you are telling me it's better business sense to limit there sale to customers and have there capital tied up than to sell as quick as possible make there profit, and try and re-order more from the distributer. One brings money in quicker and gives you the potential to reinvest. The other means, he might keep a few local clients happy. The main point of a retail shop is to make money it's a business not a public service. Someone like a large flipper rob mentions is properly going to spend more in the persons shop in one go than there top customers do all year. Remember most of Europe shops can't ship and this includes inside there own country.

[Fugu]

you are telling me it's better business sense to limit there sale to customers and have there capital tied up than to sell as quick as possible make there profit

Yes, that’s what I am saying. And that’s what is actually being practised by responsibly acting merchants, believe it or not.

One brings money in quicker and gives you the potential to reinvest. The other means, he might keep a few local clients happy. The main point of a retail shop is to make money it's a business not a public service. Someone like a large flipper rob mentions is properly going to spend more in the persons shop in one go than there top customers do all year. Remember most of Europe shops can't ship and this includes inside there own country.

If you think retail is all about making quick money, then you got something seriously wrong (you may ask Rob for input here….)

Retail – apart from offering a quality product – is about making customers happy, providing information, providing access, being reliable, offering memorable experiences and establishing long-standing, mutually trusting relationships with clients (all what Rob & team are doing so successfully). And by offering rare editions also to a wider group of clients the retailer will make more people happy, and will also turn those clients to the not-so-highly-sought-after products. This will provide him a much more reliable and sustainable business basis than simply selling-off a release in one run to the single “Big-$$$”-client. Doing otherwise, he’d frustrate at the same time 99 % of his other clients. (as we can clearly take from threads like this one).

Selling the rare and hyped is easy. Selling the standard stuff is an art.

And keep in mind, I am talking about a sought-after item (the situation, as described by wabashcr). An item where scarcity is obvious and where it is clear it will sell out reasonably quickly. I am not asking the retailer has to sit on his moulding stock for the rest of his business life.

Just imagine Rob would repeatedly act like: Sorry gents, the last 12 boxes of Sir Winston that I put up on 24:24, I gave all to Fugu, because he was the quickest to ask and he sais he does like them so much (Edit: I am aware, he might be flipping but I don give a sh..)….? What would you think had you liked purchasing a very single box, too?

[Pixa]

Yes, that’s what I am saying. And that’s what is actually being practised by responsibly acting merchants, believe it or not.

If you think retail is all about making quick money, then you got something seriously wrong (you may ask Rob for input here….)

Retail – apart from offering a quality product – is about making customers happy, providing information, providing access, being reliable, offering memorable experiences and establishing long-standing, mutually trusting relationships with clients (all what Rob & team are doing so successfully). And by offering rare editions also to a wider group of clients the retailer will make more people happy, and will also turn those clients to the not-so-highly-sought-after products. This will provide him a much more reliable and sustainable business basis than simply selling-off a release in one run to the single “Big-$$$”-client. Doing otherwise, he’d frustrate at the same time 99 % of his other clients. (as we can clearly take from threads like this one).

Selling the rare and hyped is easy. Selling the standard stuff is an art.

And keep in mind, I am talking about a sought-after item (the situation, as described by wabashcr). An item where scarcity is obvious and where it is clear it will sell out reasonably quickly. I am not asking the retailer has to sit on his moulding stock for the rest of his business life.

Just imagine Rob would repeatedly act like: Sorry gents, the last 12 boxes of Sir Winston that I put up on 24:24, I gave all to Fugu, because he was the quickest to ask and he sais he does like them so much….? What would you think had you liked purchasing a very single box, too?

But that's what rob does do, If he puts up a 24 and you say give me 12 boxes of sir winnies its what he does do. lol but rob does ship and is a community not a B&M shop so different circumstances you seem to be ignoring the important points I keep pointing out to you. Like the quicker they sell them the quicker they can order more from there distributor, They cant ship inside there own country or others legally. But ha ho your opinion is yours but blaming retailers is like blaming the dog that got kicked cause it was barking and ignoring the fact its just cause the person that kicked it was scum and the dog was just hungry.

[Fugu]

you seem to be ignoring the important points I keep pointing out to you

Thanks buddy, I have the very same sentiment about your postings.

Perhaps we have to accept we don't find an intellectual basis to discuss this. Over and end.

[Pixa]

Thanks buddy, I have the very same sentiment about your postings.

Perhaps we have to accept we don't find an intellectual basis to discuss this. Over and end.

I addressed most of your points just dont think you get it though, but I would like you explain your second line.

[Puros Y Vino]

@Fuga & @Pixa

Gents, keep the discussion on the points made, not the person making them. No need for cheap shots. Like Rob likes to say. "Play he ball, not the man". This has been a very interesting thread so far. Let's keep it civil.

[Fugu]

I addressed most of your points just dont think you get it though, but I would like you explain your second line.

Meaning, with our perhaps preoccupied personal views, I don't comprehend what you are saying, and you don't comprehend what I am saying. Nothing more, nothing less.

[Pixa]

Meaning, with our perhaps preoccupied personal views, I don't comprehend what you are saying, and you don't comprehend what I am saying. Nothing more, nothing less.

yeah preconception I can accept that

[luv2fly]

If said seller let me know I could have a box for $600 and I wanted the box as well as had the $$ for it I would buy. I do not have the source so that would be my play.

I do not have the money and do not want to spend that much on a box no matter how great they are or how hard to get they are. Personal choice.

That said, I see nothing wrong with adding a bit to cover. How much is too much? Not for me to say. I would not expect my best friend to sell me a box of hard to get cigars at cost although he would. I routinely split boxes with 2 friends at cost but that is my choice. I go no further than that. Yes I take the risk and do the leg work but that is ok with me. Again, personal choice.

Very interesting discussion and I do appreciate everyone's points.

[mgravito]

We're not talking about bread here. These are cigars. They are a luxury to be enjoyed for the experience and the taste. If we don't get our hands on a certain release we will not starve. We will live another day.

I have never sold a box in my life and don't plan to at any point in the near future so I'm going from the POV of a buyer. If the cost is too high for me to buy them regardless of the seller, reseller or retail, I do not buy them. If all cigars were expensive enough that I couldn't pay my bills and feed my family I would stop smoking cigars. I'm blown away by this concept of fairness for this type of product. I'm not sitting here blaming price gaugers for the fact that I never got to smoke a CGR.

[Habana Mike]

Not just in terms of flipping but as a general consideration to pricing cigars for a private sale in the secondary market, one must keep in mind the risk of loss is removed once a box is local.

In many cases, particularly recent products from Germany and Italy, sources do not guarantee receipt so there is a risk of monetary loss.

I've paid a premium in the past for items I could have ordered on my own that were already in-country, recognizing that the risk assumed by the seller is a value-add.

I have also seen some vendors that specify they'll only sell limited amounts of the same product to an individual e.g.:

"Please note that we are selling all the products only in normal household quantities. This refers to the number of products ordered under an order as well as the object of several orders of the same product, in which the individual orders comprise a household amount."

[NSXCIGAR]

Definitely. When I think of flippers, I'm thinking more of rare/HTF Fuentes, Tat limited releases, etc. I'm talking about situations where the flippers step in either through early or other special access and buy up everything, only to turn around and sell them at >100% markups. That's what I find to be immoral. Those boxes would all sell out just fine on their own. There's no argument to be made that these flippers are providing any kind of service. They're just using their access to gouge.

I've said it many times, but I'll repeat, my comments about flipping aren't necessarily specific to the Italian RE from the original thread. I do understand the difficulties in getting those cigars out of Italy, and I understand there is an associated cost that the consumer should bear. I don't expect anyone with contacts in Italy to provide any charitable services to those who do not have access. However, I would still say that just because someone essentially has a monopoly, and the economic license to charge whatever they want, doesn't mean it's the right thing to do. Just as it's anyone's right to sell their property for whatever they want, anyone else is free to draw conclusions about that person's motivations and character based on that asking price.

This doesn't hold water. If a party can come in and buy up 100% of the manufacturer's supply and re-sell them at a significant profit a couple of things are going on there. Either the manufacturer's price is too low to begin with and/or the manufacturer doesn't have the ability to distribute or market the product themselves, and thus the service this party provides fulfills that role, allowing for profit. As long as multiple entities are able to bid on these items in the market (no state grants of special privilege), there's no issue. Companies can contract with whomever they wish for distribution rights, etc.

If I was a manufacturer and every time I put my stock on the shelves some guy came in and cleaned me out it wouldn't take me long to figure out what's going on.

The fact that a product ultimately sells at a price the market will bear in a voluntary-exchange environment (assuming little to no government-enforced barriers to entry of any kind) means value has been created for all parties in the chain of the structure of production, going all the way back to the mining of the iron ore for the machines and tools used in the early stages of production. Therefore, all of it is completely moral, or at least no one at any stage of production has benefited at another's expense.

Retailer's practices have been brought up by some others here as well. If you know anything about retail, you'll know that selling all one's stock to one person is likely not in one's self-interest. If anyone thinks Rob or anyone else in retail doesn't act in their self-interest, they need to familiarize themselves with some enlightenment philosophy. It runs counter to Rob's, or any other retailer's, long-term interests to do that. And by long term, I mean like a week +. Making one customer really happy but having all his other customers really sad, on a regular basis, is probably not the wisest success strategy, and he knows it.

This is why these flippers are very different from professional tobacconists. They are short-term business people, due to the nature of the product. A few boxes of cigars a year, if that. It's a special case. No economy of scale. Of course prices will reflect that--it's just the nature of the beast.

[Nickbarb]

Why is it always same old, same old?

What's wrong with someone obtaining and then flipping a box for a resale point if they want, and if there is a market for it? What's wrong with someone making a buck?

It's wrong because it drives up prices and creates a demand that might not otherwise exist. Secondly it's a smack in the face to the vendor that just sold it. Thankfully people notice flippers and shun them for the most part.

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[Habano]

There's no need to be paying for a premium for any new release regardless where it comes from. There are enough gentlemen in this community that will either help you acquire the box or sell one to you at cost rather than taking advantage of you. It's called relationship building and making true friends. Anyone else it's purely business, which is why you pay way more than you should for the box.

Aged or vintage boxes on the other hand are a completely different story.

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[luv2fly]

"It's called relationship building and making true friends" Habano post.

I agree very strongly. Buy if you can/want but other than that, done.

[mgravito]

In the US, buying up stock in something and then selling for a higher price because you have *created* demand by reducing availability is called SCALPING and it is a shitty, low practice by crap people.

Scalpers are on the same level as loan sharks, bail bondsmen, 24-hour check cashers, parking enforcement cops, republican congressmen, and pimps.

The demand is created by those willing to buy. If there's a buyer at any price, there's demand. If the price is too high, then the seller is now out his original investment. If this were a limited resource or something necessary for every day living, fine, I completely understand that argument, but these are CIGARS.

This happens all the time with sporting events and the secondary ticket market. The Red Sox for a while were the hottest ticket in town, they made a deal with Ace Ticket as their exclusive secondary ticket provider in which the Red Sox allotted them with a specific number of tickets even while they were "selling out" home games. I didn't go to the games often because I couldn't afford it, but guess what? I'm still here, I'm still breathing. My mortgage is paid on time. Those who could afford it, went. I couldn't so I didn't. I don't hold a grudge against the secondary ticket market, basically corporate "scalpers". The Sox have been terrible the last few years and guess what? Ace Ticket has to sit on these tickets that go unpurchased...and I go to games.

[MPS]

The worst type of person that Rob did not allude to is the con artist. He calls you brother. He tells you he is selling to you at cost. That's the bait. Just wait for it because the switch is coming sooner or later.

Where there is smoke there is fire gentleman. Don't be fooled by the brotherly love. Many people don't have good intentions. Beware because they may just be posting and advertising in this thread!

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[Nickbarb]

Oh yes...the so called "friend" is the worst of all the pieces of **** in the cigar community. You might tell by my tone that I've been affected by this type of person before.

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[Nickbarb]

I've also made the most wonderful friendships in the cigar communities so it all balances out.

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[NSXCIGAR]

In the US, buying up stock in something and then selling for a higher price because you have *created* demand by reducing availability is called SCALPING and it is a shitty, low practice by crap people.

Scalpers are on the same level as loan sharks, bail bondsmen, 24-hour check cashers, parking enforcement cops, republican congressmen, and pimps.

I know I'm going into dark waters and defending the indefensible here but on an economic basis there's nothing wrong with scalping. Buying up a pool of tickets does not increase or decrease demand. The demand is for the event itself--not for the tickets--a very important distinction. If the scalper sells tickets for higher than face value, the face value is too low. The market is bearing higher prices, indicating greater demand for the event than reflected on the tickets. Scalpers can't sell tickets for any price--only the price that the market will bear. Venues often price tickets on the low side, guaranteeing they'll all be sold but not reflecting actual demand. But what's the difference between the venue selling them for more or the scalper selling them at their price? The buyer still pays the same--what the market will bear.

This is right from Wikipedia, for goodness sake: Ticket resale [scalping] is a form of arbitrage that arises when the amount demanded at the sale price exceeds the amount supplied (that is, when event organizers charge less than the equilibrium prices for the tickets)

No one will pay more than they're willing to pay for anything. Any and all voluntary economic transactions produce value for both parties. This isn't debatable--it's economic law. You might not like it, but then you're really against mutual benefit.

And to compare high-risk lenders, that you term loan sharks, and check-cashing establishments to traffic cops and politicians is apples and oranges. I have no choice with the police and the politicians who direct them--that's a non-voluntary transaction. But I can choose to patronize lenders and check-cashers if I want, or not--voluntary transactions.

The practice of scalping is almost universally frowned upon, but there really is no economic or moral basis for why. It's just a misconception propagated by an overly emotional, irrational public sentiment.

[shlomo]

Succinctly,......thats shitty

[str8dog]

Coming out of the woodwork to comment on this one.

"Trading" at a fair and reasonable price is the thing I miss most about the old days of the Trading Forum at CA. Rarely any gouging or profiteering there. Too bad it's gone.

[forgop]

The "Wet Blanket" brigade takes many forms.....as many as "The Flipper".

Now one may not like a "Flipper" ....but in the end he/she at least brings something to the table...which one can reject.

The worst of the "Wet Blankets" bring nothing unless you consider "moaning and whining" a commodity. When pressed they invariably portray a sense of entitlement and frustration, all giftwrapped with just a touch of self appointed moral and intellectual superiority.

Zombies are harder to kill off

Exactly. I don't get the entitlement crap of people thinking they should be able to buy something from another person that he/she couldn't replace it for themselves. In many cases, you see people selling cigars on the secondary market at prices lower than they paid and there's nobody stepping in to say they'll pay the actual cost, but get bent out of shape for someone "profiteering".

I'm tired of the term "gougers" being used for luxury hobbies. You can use the term gouging for gas, groceries, medicines, etc. Booze and cigars? Hell no.