While replying to an interview with cigar blog Robustojoe, I had a chance to address a topic that’s been on our minds for the last few months — namely, the co-dependence of B&M cigar retailers with online retailers like ourselves.
If you’re coming from the B&M sector, you might disagree. There is a common perception that online cigar retailers are working cross-purpose with local shops because unlike the B&Ms, we don’t have to charge up-front tobacco taxes (in states outside of our own.) Well, we all know there is no such thing as tax-free cigars (except in Pennsylvania and Florida), and that it is the customer’s legal responsibility to pay excise taxes on tobacco purchased online. But if there is a fault, it is with the government, creating an inequity in the way these two very interrelated industry sectors do business in regards to taxation.
Many B&Ms have responded by going online to supplement sagging in-store sales. But the path toward internet success is a long and difficult one, and with a handful multi-million dollar online cigar retailers at the top of the pile, it’s a very competitive market (we should know!)
What isn’t widely acknowledged is the ways bigger online retailers are dependent on B&M shops. Shipping costs make single-stick purchases unfeasible for online retailers, so B&Ms still lead that sector. But with the widespread tobacco tax increases and public smoking bans, when a customer can’t walk into their local cigar store to try a couple new sticks, they’ll never go online and buy the box. In addition, many online retailers supply B&Ms with special wholesale pricing. When they go out of business, online retail takes a hit as well.
As you can see, internet cigar retail is not at war with B&M shops. In fact, we’re joining together like never before. We fought alongside our B&M brethren here in New York to oppose tobacco tax increases. We’re taking each other out to lunch to discuss new strategies of doing business, and how to cope with a receeding economy and shrinking cigar market. Above all, we’re still puffin’ and sellin’ cigars and won’t ever give up fighting for the freedom to smoke, the freedom to do business on a fair playing field. It’s not enough to coexist, we will work together and everyone will win.