Cigar Flipping Discussion (moved from La Escepcion Thread)

[Lotusguy]

Keith - the legality point is kind of moot since we are talking about Cuban cigars in US from a country where it is illegal to ship tobacco.

[Puros Y Vino]

The bottom line is, in countries like Italy you need to have a contact there who can purchase in person from an LCDH and coordinate distribution privately. And as we're discussing here in this thread, that can be costly.

Yes you do need a contact. But it does not need to be costly. Many have provided the goods at cost to other B/SOTL's out of sheer goodwill and future reciprocity. I've always appreciated the effort made by friends to hunt down and relay RE's to me without the bump. AFAIC, that's a lot of work and deserving of a good bomb as a thank you vs a price hike. Either way, it's restitution, only one method "feels" better. Though I don't expect someone to be a complete saint I hope they don't be a sinner either. Bottom line? It's my choice to take or leave the terms presented.

[NSXCIGAR]

Yes you do need a contact. But it does not need to be costly. Many have provided the goods at cost to other B/SOTL's out of sheer goodwill and future reciprocity. I've always appreciated the effort made by friends to hunt down and relay RE's to me without the bump. AFAIC, that's a lot of work and deserving of a good bomb as a thank you vs a price hike. Either way, it's restitution, only one method "feels" better. Though I don't expect someone to be a complete saint I hope they don't be a sinner either. Bottom line? It's my choice to take or leave the terms presented.

Sure, and of course everyone would like to pay lower prices. But there's obviously some expense involved for these re-sellers. With little or no markup it's basically charity at that point, which I certainly admire. But these re-sellers are few and far between and we're essentially at their mercy. If the price is too high, they won't be able to flip them, and prices will come down. It's that simple.

Again, I admire charity but I can't hold it against anyone to do something they're not obligated to do, particularly in business. I'd like to think the cigar community is a bit more considerate than others but at the end of the day, business is business. If anyone's to blame, it's HSA and Diadema. Their policies and decisions have made it difficult for them to sell product. If a seller's dumb enough to shoot themselves in the foot the consumer has no chance.

[wabashcr]

The existence of these artificial barriers are not the free market. Anything that stands in the way of free exchange isn't the free market. In fact, it's the opposite. I think our definitions may be different here. I do think you're confused on the geography issue, however. Geography has nothing to do with the process of voluntary exchange. It's simply an additional factor to contend with for all parties in the decision-making process of exchange.

As far as ethical, disregarding all that's occurred prior to the point of exchange (which can certainly be important and have ethical implications), no voluntary exchange in and of itself can be exploitative. That has been understood since the time of Adam Smith.

If unethical or non-free market factors have resulted in unfavorable conditions at the point of sale, blame the prior conditions--not the final seller of the good.

Free market economics teaches that the concept of price-gouging is actually a pretty baseless idea. As long as there are no special privileges or laws favoring certain parties in play price-gouging as a concept just has no validity and certainly no ethical implications. The only way to counter so-called price-gouging are price controls, and as the Soviets, et al. discovered that brings with it a host of other issues.

I think you misunderstood my point about the barriers to entry. That's exactly why this isn't a free market. I think we're on the same page there. But the entirety of your argument assumes that this is a free market, when it very clearly is not, specifically due to the aforementioned barriers. The price gouging that doesn't exist in a truly free market is rampant in situations like what we're discussing.

Geography can absolutely restrict potential buyers and sellers from interacting freely. If the Italian government is strict about not allowing retailers to ship tobacco to other countries, that's a barrier to free trade.

Just because two people agree on a transaction doesn't mean both parties are acting in good faith. That presumes everyone has all the same information, which is rarely the case.

[wabashcr]

Seems someone learned his economics lessons...

Indeed, I think that is the key sentence. That’s the important part. It is too easily overlooked by people that there is of course a value added by the second seller to the purchaser: It is accessibility of otherwise - to him - inaccessible goods. Be it a new RE or rare vintage stuff. If it were easily accessible to the buyer, he could have purchased it by himself at release price. But he didn’t. There will be a reason why he didn’t: Geographic restrictions – no one to blame for that, he found out three years after release that he indeed liked the 1966 much more than he initially thought, or he simply wasn’t born at the time a Davidoff Ch. Margaux was still in production. And there is a price to it. Therefore, in a voluntary negotiation with a secondary market provider (I will avoid the expression ‘flipper’), it is to the benefit of both parties. If it weren’t so, the transaction simply would not materialize.

That being said, granted, there is always the possibility of overreaching. And there then finally also comes an ethical component into play that cannot be dismissed. But again that relates to all kind of business.

I don't disagree with this, but sometimes there are scenarios where the secondary sellers (flippers) are the precise reason a product may be scarce or difficult to attain for others. I'm not saying this is the case with this Italian RE. But there are plenty of limited cigars that are scooped up by people whose sole intent is to make money. The same is true of concert or sporting tickets, and many other scarce commodities.

[Puros Y Vino]

Just to level set. Are people here discussing markups by licensed tobacconists on RE's that are not in their region, or other cigar smokers who buy to flip their boxes at a profit?

The former isn't too surprising. The latter is what I believe most people take issue with.

[Habano]

Just to level set. Are people here discussing markups by licensed tobacconists on RE's that are not in their region, or other cigar smokers who buy to flip their boxes at a profit?

The former isn't too surprising. The latter is what I believe most people take issue with.

Bingo.

Yes you do need a contact. But it does not need to be costly. Many have provided the goods at cost to other B/SOTL's out of sheer goodwill and future reciprocity. I've always appreciated the effort made by friends to hunt down and relay RE's to me without the bump. AFAIC, that's a lot of work and deserving of a good bomb as a thank you vs a price hike. Either way, it's restitution, only one method "feels" better. Though I don't expect someone to be a complete saint I hope they don't be a sinner either. Bottom line? It's my choice to take or leave the terms presented.

....and bingo.

Good to see others getting the boxes at 375 euros rather than 500 euros which is roughly $600 and the going flipping rate I believe.

Since there are clearly two topics in this thread, perhaps it would be best to split out the discussion on the cigar and flippers.

[MooseAMuffin]

Many countries/regions sell online and/or are willing to ship worldwide. In this case, Diadema (Italian Habanos distributor) is only distributing their REs to Italian LCDHs who do not sell online or ship worldwide. Italian regional releases are among the most difficult to obtain because of this. Also, prices are set by HSA which may or may not accurately reflect actual demand. This is the case here with La Escepcion.

Ability to acquire REs is mostly dependent on the region in question and their distributor. That's why Asia Pacific, UK and Swiss releases are typically the easiest to come by--they're the leaders in online/wordwide sales. Also, their distributors don't limit the distribution exclusively to LCDHs like some others do.

The bottom line is, in countries like Italy you need to have a contact there who can purchase in person from an LCDH and coordinate distribution privately. And as we're discussing here in this thread, that can be costly.

Yes you do need a contact. But it does not need to be costly. Many have provided the goods at cost to other B/SOTL's out of sheer goodwill and future reciprocity. I've always appreciated the effort made by friends to hunt down and relay RE's to me without the bump. AFAIC, that's a lot of work and deserving of a good bomb as a thank you vs a price hike. Either way, it's restitution, only one method "feels" better. Though I don't expect someone to be a complete saint I hope they don't be a sinner either. Bottom line? It's my choice to take or leave the terms presented.

As for contacts, I'm guessing people are meeting these LCDH owners while traveling and then establishing relationships with them which allows them to call in orders like this? As for the contacts that get these and pass um on to you, I agree it would be nice to find people that don't bump up the price as long as you can show some respect in return. Unfortunately, being in the US, I probably don't have much value (at the moment anyway) to a B/SOTL who have access to REs or CCs in general...until the US RE comes out....70rg and all lol

[NSXCIGAR]

I don't disagree with this, but sometimes there are scenarios where the secondary sellers (flippers) are the precise reason a product may be scarce or difficult to attain for others. I'm not saying this is the case with this Italian RE. But there are plenty of limited cigars that are scooped up by people whose sole intent is to make money. The same is true of concert or sporting tickets, and many other scarce commodities.

I think you're contradicting yourself on the concept of scarcity. The good is scarce and therefore it gets scooped up. Scarcity is the state of things prior to anyone deciding to get involved. If nothing was scarce it wouldn't be an economic good. In fact, scarcity is the reason economics exists.

In this case, these cigars are scarce for anyone outside of Italy, and therefore, they're scooped up by those able to sell them to those for whom they are scarce.

[NSXCIGAR]

Just to level set. Are people here discussing markups by licensed tobacconists on RE's that are not in their region, or other cigar smokers who buy to flip their boxes at a profit?

The former isn't too surprising. The latter is what I believe most people take issue with.

Right. To clarify, I'm referring to non-professional secondary (black-market) sellers. But in my mind, there is no fundamental difference although I see how it may appear that way and people could take issue, although I disagree with that logic.

Again, I would be quite grateful and appreciative of someone who re-sold these to me or anyone else with as little markup as possible but in the end, the name for that is charity. And no one has an ethical obligation to be charitable, just like anyone has a right to be a mean person. I can just choose not to do business with them. But if they're the only game in town, our only recourse is to fly to Italy and buy them ourselves for our friends, and I don't see anyone here doing that.

[wabashcr]

I think you're contradicting yourself on the concept of scarcity. The good is scarce and therefore it gets scooped up. Scarcity is the state of things prior to anyone deciding to get involved. If nothing was scarce it wouldn't be an economic good. In fact, scarcity is the reason economics exists.

In this case, these cigars are scarce for anyone outside of Italy, and therefore, they're scooped up by those able to sell them to those for whom they are scarce.

Technically anything that isn't 100% replenishable is scarce. But scarcity can also refer to a condition where demand for a good exceeds supply. Resellers (flippers) can affect both the supply and demand side.

[CanuckSARTech]

Keith - the legality point is kind of moot since we are talking about Cuban cigars in US from a country where it is illegal to ship tobacco.

Agreed. Hard as it was, I was kinda trying to beat around the bush of the obvious on that one! LOL.

[NSXCIGAR]

I think you misunderstood my point about the barriers to entry. That's exactly why this isn't a free market. I think we're on the same page there. But the entirety of your argument assumes that this is a free market, when it very clearly is not, specifically due to the aforementioned barriers. The price gouging that doesn't exist in a truly free market is rampant in situations like what we're discussing.

Geography can absolutely restrict potential buyers and sellers from interacting freely. If the Italian government is strict about not allowing retailers to ship tobacco to other countries, that's a barrier to free trade.

Just because two people agree on a transaction doesn't mean both parties are acting in good faith. That presumes everyone has all the same information, which is rarely the case.

I think we're understanding each other for the most part. I don't claim that free market conditions led to the conditions that face us now, but the final act in the chain is essentially a free market transaction. Just like black markets in the Soviet Union were essentially free markets but that situation came about because of a lack of free markets in general.

And symmetric information is never required for successful voluntary exchange. Prices themselves and competition do a good job of narrowing that gap. However, if there is fraud or misrepresentation that should be remedied by enforcement of basic property rights. Courts, insurance etc.

[CanuckSARTech]

Right. To clarify, I'm referring to non-professional secondary (black-market) sellers. But in my mind, there is no fundamental difference although I see how it may appear that way and people could take issue, although I disagree with that logic.

Again, I would be quite grateful and appreciative of someone who re-sold these to me or anyone else with as little markup as possible but in the end, the name for that is charity. And no one has an ethical obligation to be charitable, just like anyone has a right to be a mean person. I can just choose not to do business with them. But if they're the only game in town, our only recourse is to fly to Italy and buy them ourselves for our friends, and I don't see anyone here doing that.

Ooooh.

I think you could be in trouble with that one.

By your definition / generality up there, you're saying cigars are "black market" by being re-sold by non-professional secondary sellers.

So...

Say I choose to go down to Havana, and buy an additional 4 or 5 bundles of Monsdales on top of my usual. I then take said additional bundles, bought by me, from Jorgito, pictures and receipts in hand, and choose to sell them on a place separate from FOH, any of the typical auction / secondary-sales sites. Those Monsdales now become "black market"?

Or similar - if I went down, went to see Reynaldo at Conde de Villanueva, picked up a dozen boxes of the Diplomaticos RE Cuba sticks, and did the same in using a re-sale online site to sell off four boxes. Factura and photos in hand (aside from my word, which I would HOPE would be good enough for some). Those are now "black market".

Makes no sense.

Black market are specifically stuff taking out of back-/side-door channels, and avoid the initial sales avenues to begin with, with unsure provenance, etc., etc. Hell, what I'm giving an example of above is barely even "grey market".

Be cautious - I think some people's definitions and understanding of some terms and standards within the cigar world may be skewing their perception of what's kosher and "brotherly" or not.

[NSXCIGAR]

Ooooh.

I think you could be in trouble with that one.

By your definition / generality up there, you're saying cigars are "black market" by being re-sold by non-professional secondary sellers.

So...

Say I choose to go down to Havana, and buy an additional 4 or 5 bundles of Monsdales on top of my usual. I then take said additional bundles, bought by me, from Jorgito, pictures and receipts in hand, and choose to sell them on a place separate from FOH, any of the typical auction / secondary-sales sites. Those Monsdales now become "black market"?

Or similar - if I went down, went to see Reynaldo at Conde de Villanueva, picked up a dozen boxes of the Diplomaticos RE Cuba sticks, and did the same in using a re-sale online site to sell off four boxes. Factura and photos in hand (aside from my word, which I would HOPE would be good enough for some). Those are now "black market".

Makes no sense.

Black market are specifically stuff taking out of back-/side-door channels, and avoid the initial sales avenues to begin with, with unsure provenance, etc., etc. Hell, what I'm giving an example of above is barely even "grey market".

Be cautious - I think some people's definitions and understanding of some terms and standards within the cigar world may be skewing their perception of what's kosher and "brotherly" or not.

Sure, point taken. "Black market" might be a little vague but I'm only referring to secondary, non-professional sellers here. I think there are clear terms in the cigar world for gray-market and black market so I used black market but I personally don't see it as a pejorative term.

[wabashcr]

I think we're understanding each other for the most part. I don't claim that free market conditions led to the conditions that face us now, but the final act in the chain is essentially a free market transaction. Just like black markets in the Soviet Union were essentially free markets but that situation came about because of a lack of free markets in general.

And symmetric information is never required for successful voluntary exchange. Prices themselves and competition do a good job of narrowing that gap. However, if there is fraud or misrepresentation that should be remedied by enforcement of basic property rights. Courts, insurance etc.

Yes, I agree with the first part. As far as information, I'd argue it doesn't have to rise to the level of fraud or misrepresentation to be unethical. I think again of flippers of popular NC releases, and many times the buyers are just ignorant of the fact that they're being gouged. Buyer beware, of course. But I don't think it's justification for the sellers that they're able to find an ignorant buyer. That's nothing for the courts or anything, and really not my business. But if you spend time on exchange or auction sites, you see it frequently. Again, not speaking directly to this Italian RE.

[Fugu]

Can we perhaps keep this thread to about the actual cigar, instead of the morality of flipping??

I find this discussion more intriguing than the showing-off of stacks of boxes, I have to say.

But, admitted, perhaps a different topic

[Pixa]

Sure, and of course everyone would like to pay lower prices. But there's obviously some expense involved for these re-sellers. With little or no markup it's basically charity at that point, which I certainly admire. But these re-sellers are few and far between and we're essentially at their mercy. If the price is too high, they won't be able to flip them, and prices will come down. It's that simple.

Again, I admire charity but I can't hold it against anyone to do something they're not obligated to do, particularly in business. I'd like to think the cigar community is a bit more considerate than others but at the end of the day, business is business. If anyone's to blame, it's HSA and Diadema. Their policies and decisions have made it difficult for them to sell product. If a seller's dumb enough to shoot themselves in the foot the consumer has no chance.

I think the majority of people (now I am just one person so may be wrong) who take the view that flipping is wrong is down to the fact that most people who are doing it have not built up relationships themselves to procure them, but been kindly introduced by someone else only for that person to go back 6 months later to find out the flipper had cleared out the last boxes so they could make themselves some money. It's these people flipping who make it less likely for people to share sources. So the free market/people who are just making what's rightfully there for offering a service are the people who are making it harder to get cigars for others. There diadema policy's are not there's its the LAW in Italy that you can't ship. Same in a lot of European countries.

Can we perhaps keep this thread to about the actual cigar, instead of the morality of flipping??

Is it your collar that's rubbing and making your neck red

[oliverdst]

For me the idea of flipping cigars for profit just goes against everything I enjoy about the cigar smoking lifestyle. The friendships, the sharing...etc. It is definitely not for me and I would feel very uncomfortable trying to flip and or buying a flip.

Saying that, I don't think there is anything wrong with it if that's what you do....it's a free country as they say. But you probably just wouldn't be the kind of person I would enjoy sharing this hobby with on a personal/friendship level.

I think something like that too.

I do enjoy sending cigars to botl's and I dont expect anything in return.

Maybe I am a sucker.

[Puros Y Vino]

Moving all the "flipping" related posts here in case people want to continue the discussion.

[RijkdeGooier]

Interesting posts and very revealing too.

[LGC]

Flippers will also buy larger quantities to obtain discounts, additionally increasing profits. It also provides more leverage for obtaining rare and limited cigars offered only to select clients. Posting pics of boxes will draw inquiries from buyers. Some sellers will approach those who show interest in certain items in auctions or posts. It's basically a way to draw large profit margins and avoid taxes. This is why many folks shy away from public boards after some time. I prefer to buy for smoking and sharing. The cigar world will always consist of smokers, chasers, flippers, and collectors...

[Pixa]

It's just a matter of sour grapes IMO. "I can't get a product at the price I want, so the people marking up their PERSONAL PROPERTY are evil". MiamiWhatever put it well. Just because you have a pastime in common doesn't make you someone who is ENTITLED to a price you approve of. If you live in the U.S. you are a "victim" of flipping every time you make a retail purchase. If a seller sets a price, and a buyer agrees to and pays that price, it's really none of your business, other than you're not getting your way

I think that the main ERRONIOUS thought among the whiners is that they believe themselves to be part of a fraternity where goods are shared at cost. Wake up. Just because you smoke cigars doesn't make you part of anything that ENTITLES you to anything. Among friends cigars are bought and traded at cost. Just being a person who smokes cigars doesn't make that the case.

Just as when you peruse our host's site and see an item you'd like to buy. If the price is acceptable, place an order. If it's more than you'd like to spend, pass. Nobody berates vendors for setting there prices...why berate an individual ? The principle is still the same...buy low, sell high...a commerce principle out dating the very existence of cigars.

Nothing to do with sour grapes on my part, have the opportunity to get most boxes that are getting flipped at retail. I dont see how you can try and see peoples objections to this practice as a failing on there part, the world really is going to ****. You really think people dont moan about vendors who buy other regional cigars and put large mark ups on there sites.

[NSXCIGAR]

I think the majority of people (now I am just one person so may be wrong) who take the view that flipping is wrong is down to the fact that most people who are doing it have not built up relationships themselves to procure them, but been kindly introduced by someone else only for that person to go back 6 months later to find out the flipper had cleared out the last boxes so they could make themselves some money. It's these people flipping who make it less likely for people to share sources. So the free market/people who are just making what's rightfully there for offering a service are the people who are making it harder to get cigars for others. There diadema policy's are not there's its the LAW in Italy that you can't ship. Same in a lot of European countries.

Is it your collar that's rubbing and making your neck red

I completely understand why people aren't happy about it, but the bottom line is that unless one is prepared to go to Italy or has a personal contact in Italy (both of which have value) then there can be no possible basis for complaining about the price that one has to pay for something that there is no way they could get at any price otherwise.

I fail to see how any of these flippers are reducing supply to the point where the price is being driven up for all boxes everywhere. I could be wrong, but as far as I'm aware, as of this moment there are still plenty of boxes available on the LCDH shelves in Italy for any Joe to go in and buy at the HSA price. I've not heard any evidence supporting the claim that these flippers are buying up enough stock to reduce supply for our personal contacts right now. Has anyone's personal contacts here been having difficulty locating these in Italian LCDHs?

In addition, the more flippers there are, the more competition between flippers which would tend to lower prices.

I wasn't sure if Italian law itself prohibited exporting of cigars but you and others have confirmed this for me. So while not mostly HSA & Diadema's fault, I think Diadema, knowing this, possibly could have increased allotment to non-LCDH retailers that would have allowed better product movement at lower prices for those outside Italy. Limiting these to LCDHs was just a poor and unnecessary decision that virtually guarantees these things are going to be difficult to move and that those who want them are stuck with higher prices via flippers/middlemen. They obviously didn't learn their lesson with the Selectos Finos.

[El Presidente]

A. There are professional "flippers". They do it on a large scale for significant profit.

B. There are amateur/recrational "flippers". they do it on a small scale to recover costs* + maybe end up with their own purchases being dollar neutral or near enough.

* costs being the expense and trouble of acquiring those cigars.

C. There are people who will do it out of the generosity of their hearts and charge shipping costs. These are not flippers. Just beautiful souls. You will generally need to have a personal relationship with them.

I don't begrudge A although personally I wouldn't buy from them for something I would love to have personally. I have yet to come across a cigar that I "must" have.

B is providing a decent service. I am happy to wear a reasonable mark up on a box of something I would like personally. The fact that they have the box or boxes I want is the end result of time and effort in acquiring them (effort that I did not or could not make).

C is just Gold. However I have only reached out maybe three times in 20 years.

While many will decry A and B. More disturbing to me are the people who will contact C becasue he lives in the region that something is released (or has acquired a number of boxes for himself/herself) and "ask or even insist" that they go out of their way to supply a box or two......without any personal relationship having been established prior. Naturally they want it at cost.

This is why C's become B's who often migrate to A's