Investing in fine tobacco

[SmokyFontaine]

55 minutes ago, El Presidente said:

I will ensure that is done from tomorrow 

Yah....I worded that very poorly...unless you're keeping those two boxes a day for me with the right of first refusal. Haa haa. What I poorly communicated was 2 boxes of the same cigar per customer. That probably fits a business model that actually works a little better.

[La_Tigre]

1 hour ago, El Presidente said:

I will ensure that is done from tomorrow 

Is that really what’s happening though, are folks buying 10 boxes at a crack on the 24:24? Maybe I’m naive buying my single boxes or two box deals and thinking others only do the same on FOH.

[El Presidente]

5 minutes ago, La_Tigre said:

Is that really what’s happening though, are folks buying 10 boxes at a crack on the 24:24? Maybe I’m naive buying my single boxes or two box deals and thinking others only do the same on FOH.

No. The vast majority purchase 1-2 boxes. It is harder through the cart however. That is what I will look at. 

[djrey]

I think a 2 box limit is very appropriate. Give more people a shot. It’s not like you’re being starved of cigars if you can only get two boxes of any one cigar every month or two they show up.

[Meklown]

14 hours ago, medzikone said:

I don't understand this hatred for people who resells cigars. I was wondering if I could invest in 20-30 boxes. HSA increases prices every year now. Why don't sell the same box with 5% in next years?

Personally I define flippers as someone who looks for immediate resell with extra. Someone who ages them for sale later is more of an investor? 

5 hours ago, SmokyFontaine said:

Part of me wishes FOH would limit numbers of boxes on 24:24. Something like 2 boxes of the same cigar max per day

Though to be fair there are some folks who really go deep for their own smoking pleasure. I understand the difficulties in balancing such sales

[ElPuro]

22 minutes ago, djrey said:

I think a 2 box limit is very appropriate. Give more people a shot. It’s not like you’re being starved of cigars if you can only get two boxes of any one cigar every month or two they show up.

I understand where you are coming from, but seems unfair to a retailer of specialty/luxury goods like cigars (in contrast to a grocer or retailer of essentials such as food or medicine) to limit the number of boxes one customer can purchase (I've never purchased more than one myself,  maybe two). Why should the retailer suffer when "a dollar is a dollar." I think economists would argue the retailer, who is in business to generate a profit, is well positioned to increase prices to balance out supply and demand and maximize profits (note: I'm not actually suggesting this, and I'm also NOT an economist, just discussing theoretically) ?.

[djrey]

33 minutes ago, ElPuro said:

I understand where you are coming from, but seems unfair to a retailer of specialty/luxury goods like cigars (in contrast to a grocer or retailer of essentials such as food or medicine) to limit the number of boxes one customer can purchase (I've never purchased more than one myself,  maybe two). Why should the retailer suffer when "a dollar is a dollar." I think economists would argue the retailer, who is in business to generate a profit, is well positioned to increase prices to balance out supply and demand and maximize profits (note: I'm not actually suggesting this, and I'm also NOT an economist, just discussing theoretically) ?.

Totally on board with what you are saying. This is a business not a charitable organization. With that said, 24:24 is an extremely popular offering that routinely sells out in minutes. I would imagine that whether Rob and the team decides to limit or not, the merchandise will sell. But yes, from a purely business point of view. Keep the demand high and supply low and do not limit. I see no problem with this. Was just exploring the other side. I don’t go after the hot big ticket stuff anyway. ?

[Bijan]

4 minutes ago, djrey said:

Totally on board with what you are saying. This is a business not a charitable organization. With that said, 24:24 is an extremely popular offering that routinely sells out in minutes. I would imagine that whether Rob and the team decides to limit or not, the merchandise will sell. But yes, from a purely business point of view. Keep the demand high and supply low and do not limit. I see no problem with this. Was just exploring the other side. I don’t go after the hot big ticket stuff anyway. ?

I'm not a business whiz, but it seems like if it's going to sell out either way, getting more satisfied customers, who might turn into repeat customers has some advantages too. Vs having one person buy all the most valuable boxes, and regularly disappointing the average member. People might then just stop checking 24:24.

[PaulPower]

12 hours ago, SmokyFontaine said:

Personally I feel like if you're a flipper, and buying in quantities that limit supply of direct customers, that kinda sucks. Doing that is actually against the ToS of many retail sites (although seldom enforced). Overlooking the obvious, that if you're flipping them to sell in the US, you're breaking the law, to me if you're trying to make cigar selling a trade or a side business, you should be purchasing through a distributor, not a retailer. You should go try to setup terms of sale with PCC, or an LCDH dealer. I'm sure it happens all the time, but especially with the current supply issues, it seems like 24:24 goes faster than it has in the 18mos I've been a member, and if a chunk of that is some dick who is purchasing 10 boxes to start their tobacco empire, that would really not be in line with how I view FOH (which admittedly is irrelevant to how it's used). Part of me wishes FOH would limit numbers of boxes on 24:24. Something like 2 boxes of the same cigar max per day.  Anyway, that's my rant. If you want to be a vendor, go through the appropriate channels and purchase upstream.  

 

This post make a lot of assumption and accusations that can’t go unanswered. A flipper buy then immediately resells a limited product for a profit. They are frowned upon because the decrease availability and increase price. I never suggested this. I suggested buying a commodity and aging, hoping it will increase in value, and sell it for a profit. I assure you, wealthy people already invest in fine cigars... and wine... and coins... and art.... and classic cars... and dozens of other fine items. I never asked about “flipping,” and it’s presumptive of you to assume.

 

I also assure you that those investing in wine, art and sports cars are not “dealers.” Why is that needed in this case? Can’t a Connoisseur buy a fine item with the hope it will appreciate without starting a business distributing said thing?

 

Secondly, my very presence on the forum shows I’m unconcerned with what US law thinks of my preferred cigar.... so who cares?

On 7/14/2020 at 10:38 AM, Edward7 said:

10% total return in 5 years is what...around 1.92% compounded return over that period. 
At least it’s more fun than rolling CD’s at last year’s rates. 
 
it would be worth selling current boxes at a premium if you could get your hands on anything you could offload immediately at a profit - things such as retail Cuba priced behikes and other limited release cigars. 

I have actually calculated some potential sales (based on current auction prices and mark at time of release) at 12% per year.

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[djrey]

19 minutes ago, Bijan said:

I'm not a business whiz, but it seems like if it's going to sell out either way, getting more satisfied customers, who might turn into repeat customers has some advantages too. Vs having one person buy all the most valuable boxes, and regularly disappointing the average member. People might then just stop checking 24:24.

Exactly. If items on 24:24 lasted for 12 hours or so then that’s one thing. But we’re talking almost every listing being gone in less than 10 minutes. 
 

Certainly cannot complain though. 24 should be seen as a privilege. We have a gracious host who doesn’t need to do what he does.  If Rob sees an issue I’m sure he will deal with it in a more than fair manner. He’ll have my business regardless.

[SmokyFontaine]

2 hours ago, PaulPower said:

This post make a lot of assumption and accusations that can’t go unanswered. A flipper buy then immediately resells a limited product for a profit. They are frowned upon because the decrease availability and increase price. I never suggested this. I suggested buying a commodity and aging, hoping it will increase in value, and sell it for a profit. I assure you, wealthy people already invest in fine cigars... and wine... and coins... and art.... and classic cars... and dozens of other fine items. I never asked about “flipping,” and it’s presumptive of you to assume.

 

I also assure you that those investing in wine, art and sports cars are not “dealers.” Why is that needed in this case? Can’t a Connoisseur buy a fine item with the hope it will appreciate without starting a business distributing said thing?

 

Secondly, my very presence on the forum shows I’m unconcerned with what US law thinks of my preferred cigar.... so who cares?

 

 

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I didn't quote you or anyone else with regards to flipping so I'm not quite following. I merely pointed out in a standalone post in the thread that if that's how someone was using FOH, for my selfish benefit, I wish they would enter the supply chain at the distributor level rather than here, a presumed consumer site.  Didn't think it was a deep enough topic to spur philosophical debate.

[Edward7]

4 hours ago, PaulPower said:

I have actually calculated some potential sales (based on current auction prices and mark at time of release) at 12% per year.


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I was just calculating what someone said that he thought he could get 10% total in 5 years. 
 

in any case, if you’re not investing or flipping or aging and selling in volume, it’s probably a better life to just smoke what you got. What’s the point of making $500 on a $500 box in years? It’s no different than hypebeasts flipping one single pair of yeezys. 
 

[GavLew79]

1 hour ago, Edward7 said:

I was just calculating what someone said that he thought he could get 10% total in 5 years. 
 

in any case, if you’re not investing or flipping or aging and selling in volume, it’s probably a better life to just smoke what you got. What’s the point of making $500 on a $500 box in years? It’s no different than hypebeasts flipping one single pair of yeezys. 
 

The point (for me who has sold a couple of boxes on BR), is that stuff I haven't got around to smoking yet is now worth a fair bit more than I paid. Selling provides immediate cash flow to a) finance the purchase of more smoking stock and maybe another box for ageing, or b) pay for other stuff that you may not necessarily have had the cash for...unforseen repairs to an old Mercedes for example. 

Smoking them would have provided enjoyment. Selling them provided profit, for very little effort other than having held on to them, to be distributed as seen fit. 

I see nothing wrong with ageing and selling if not to your liking or the value has increased to a point where the free cash flow becomes attractive. 

I've always been an advocate of investing in things you like and understand. On here I've likened cigar investing akin to the old "Buy two cases, sell one, drink one for free" regarding fine wine investment. Easier in earlier climes but not impossible these days, with the drinking windows of something like Bordeaux, Burgundy or certain whiskies. 

That said, "investing" in my case is not to derive an income or large sum from it. Merely to speculate on a few boxes, then either smoke them or sell them as per my whim.

It's a free market. You can do what you like. 

[JohnnyO]

In my experience cigars that have increased in value greatly in the past 20 years are ones in the ceramic jars. Were talking 3-4:1 ROI in 10 years. John

[La_Tigre]

14 hours ago, El Presidente said:

No. The vast majority purchase 1-2 boxes. It is harder through the cart however. That is what I will look at. 

That is what I suspected. I have better success with the carts myself. I would say half of my purchases over the past year have come from the cart days. I’m too slow on the decision making on the quick fire, direct to Di’s eardrums days...?

I also do not see the need to change your 24:24 method. Any retailer that puts up a sale has “once it’s gone it’s gone....“ and some folks left out. It is part of the deal. We’ve discussed this before in other threads along the topic. It ain’t broke and it also helps to move your stock effectively as well as promote interest.