Grey market vendor NC cigar prices

[djrey]

As we have seen there are numerous grey market vendors who have increased their NC inventory with the shortage of CC and price increases. One thing I noticed is that these vendors are often selling at a massive discount compared to US based sites. One site in particular (that is legit for CC) is selling Ilusione boxes at nearly half the price of what you would pay in the US. How are they doing this? Is it because they aren't paying US tobacco taxes? 

[BrightonCorgi]

31 minutes ago, djrey said:

Is it because they aren't paying US tobacco taxes? 

For sure and some other reasons too.

[KCCubano]

Yes some are well below US prices and others above. Don't have an answer. I did buy a box of Illusione from the vendor you are referring to. Crazy low prices on them

[GVan]

I've bought both Illusiones and Warped in bulk - better prices and so far very good NC's.  Will allow these to rest for > 30 days and then gather some age just like my NC collection.

[MrBirdman]

11 hours ago, djrey said:

As we have seen there are numerous grey market vendors who have increased their NC inventory with the shortage of CC and price increases. One thing I noticed is that these vendors are often selling at a massive discount compared to US based sites. One site in particular (that is legit for CC) is selling Ilusione boxes at nearly half the price of what you would pay in the US. How are they doing this? Is it because they aren't paying US tobacco taxes? 

Yes. I think they also purchase excess stock, warehouse clear-out, going out of business, etc. You’ll occasionally see non-Cuban special editions from 5-6 years ago pop up, and the Illusione boxes I’ve gotten on the grey market are always at least 4-5 years old. I don’t see that as a problem with most cigars (and with many I appreciate it). Plus, you can easily get boxes that old from domestic retailers depending on how popular the cigar is. 

[Bagman]

Retailers in the US sell cigars at 100%+ margin. There is a vendor in the US that regularly has 40% off.  And it is just across the board not just cheapys (a few exceptions due to manufacture restrictions)  I just bought a ton of Melanios at 40% off.  Lot of wiggle room to sell those cigars at reduced prices.

[eggtimer]

5 minutes ago, Monterey said:

Retailers in the US sell cigars at 100%+ margin. There is a vendor in the US that regularly has 40% off.  And it is just across the board not just cheapys (a few exceptions due to manufacture restrictions)  I just bought a ton of Melanios at 40% off.  Lot of wiggle room to sell those cigars at reduced prices.

100% does not seem an unusual retail margin for low cost products? But I wouls have assumed that cigars are high turnover consumer goods and the margin would be more in the 30% range - how do they do that? Little competition?

[Bagman]

On 2/13/2023 at 5:27 PM, eggtimer said:

100% does not seem an unusual retail margin for low cost products? But I wouls have assumed that cigars are high turnover consumer goods and the margin would be more in the 30% range - how do they do that? Little competition?

Why would they sell me a top tier product at 40% off if they were going to lose money?  The fact that the OP mentioned it was half the price just further proves the point.  That and I was buddy with a retailer So I know a few insider things.  Most retailers don't sell multiple boxes a day, so while the profit is high per box, they still struggle due to the volume.  But go online, or better yet, go international without taxes and regulations, and you can move volume and cut those prices down.

[JustDave]

Does the international shipping cancel out?

 

I get a lot of spirits from overseas and unless buying in bulk, the shipping kills me.  Just got a LE Scotch for ~$200 and $60 in shipping.

[MrBirdman]

2 hours ago, JustDave said:

Does the international shipping cancel out?

 

I get a lot of spirits from overseas and unless buying in bulk, the shipping kills me.  Just got a LE Scotch for ~$200 and $60 in shipping.

Many, perhaps even most, grey market retailers offer free shipping.

[Lamboinee]

15 hours ago, djrey said:

vendors are often selling at a massive discount compared to US based sites.

I've also seen plenty of instances where there is little, if any, advantage in price.  A few times it actually would have cost me more to buy from the grey vendor.  I'll also give props to the solid B&M retailers out there....they deserve saving!

[BrightonCorgi]

11 hours ago, JustDave said:

Does the international shipping cancel out?

Cigars are light and compact.

[Namisgr11]

You folks must frequent different grey market vendors than I do.  To me, it seems the non-US/non-Dominican vendors offer non-Cubans for much higher prices than can be found in the US or D Republic.  But I mostly buy Fuente, Oliva, Davidoff, and My Father, so that could well have something to do with it.