What Is Too Much Markup?

av8scuba · Oct 7, 2013

Just curious... What is to much markup? I visited my B&M today and prices are 125% or more compared to what I can get the same product online. I understand they have more overhead, and I like to patronize my local provider when I can. But I'm thinking this is a bit much for what disposable income I have.
Thoughts?

allan · Oct 7, 2013

Av8scuba
This subject has been brought up several times in the past, but just to mention a few points:
What state are you in?
In NY State the tobacco tax is 75% over the cost of the tin.
I hear that in Florida the tax is 95%.
So, even before the proprieter starts to price the item, he cannot possibly compete with online sales where tax is 0 if you order out of state.
Not even to mention the cost of running a business in any state of the union. Rent, salaries, taxes, fees, fines, new regulations, postings-the list goes on and on.
It is no wonder at all why we see so many fine tobacco shops going out of business.
Sorry if I sound like I'm preaching, but I am a B&M and I feel it every time a client walks in with a watch that they saw online for x dollars, no tax. Tbey may buy from me anyway because I am a brick and morter, but the margin is so thin sometimes it hardly pays anymore.

cigrmaster · Oct 7, 2013

I refuse to buy tobacco at my local b/m because of the 85% tax on the wholesale price of pipe tobacco here in Florida. A tin that costs me 8.95 online costs 22.95 plus 7% sales tax at my local b/m. It is not his fault the state decided to screw pipe smokers( no cigar tax at all) but I will not pay it. He once had a great selection of tobacco but now has about 10% of what he used to and only sells it to tourists from Europe and other places that are used to insane prices.
It could very well be the state you are in has high taxes. You can check here.

http://www.tobaccofreekids.org/research/factsheets/pdf/0169.pdf

av8scuba · Oct 7, 2013

I'm in MO. 10% according to the chart.
Like I said, I like using mom and pop stores of all kinds. But there comes a point it just doesn't make sense.

teufelhund · Oct 7, 2013

Which tobacconist? I'm in MO myself. I know all of them in St. Louis and some in Springfield.

allan · Oct 7, 2013

But there comes a point it just doesn't make sense.

Av
I am in total agreement with you, and although occaisionally I purchase from a B&M, I online shop just like the rest of us.
Very sad for the local retailers.

av8scuba · Oct 7, 2013

@teufelhund - Jon's in Clayton. The staff was very nice and helpful and offered to order anything I needed that they didn't carry, and offered suggestions on other blends I might like based on my purchases. I did buy a few tins as I believe in supporting them, and will probably do so when I'm in the area every few months. But most of my orders will likely be from the PM site sponsors. It's just sad that most B&Ms are going away due to their overhead.
And I stand corrected on the 125% figure. I was basing it on my last purchase of my selected blends, not today's online prices. It is more like 60%. I don't want to be unfair to them.

av8scuba · Oct 7, 2013

@rothnh - 10% is the tax rate. The difference in price is much more.

rmason · Oct 7, 2013

If I have any B&Ms in my area, I would definitely support them at least to some degree.

That is what I do, I only buy all my bulks and cleaning accessories from my B&M, when it comes to tins and pipes it's usually a split if I want a tin they have I will buy it there, now if I'm buying many tins then I go online.

~Ron

shaintiques · Oct 7, 2013

And talk to them about their prices, explain the situation. Sort of like price shopping at grocery stores. For instance I was at a B&M that was selling Sutliff cans for $20 a pop, which is crazy. I asked them how many they had sold, not too many, Tell them you want to support the Brick and mortar, but they need to meet you in the middle. I want to support the B&M as much as the next guy, but I worked hard for my money too and I've got to stretch it as far as it can go.

wyfbane · Oct 7, 2013

I agree. I support my B&M as much as I can. I paid $111 for my Dracula Pete (Pics shall be forthcoming) instead of $96 shipped from SP.com. I will also buy random oz's of bulk tobacco from them as well. I draw the line at tobacco tins. The tax rate here in WA is 95% of MSRP. That means that Sutliffs with a msrp of $10 will have $9.50 in excise tax even if the venders want's to sell it at the going online rate of $6.10-6.50. And then of course there is the 9.8 sales tax. For our B&M guys here there really isn't much they can do.
It's so silly.

mso489 · Oct 7, 2013

I can't resist online prices on tobacco, and variety in pipes, but I buy a tin of tobacco, pipe cleaners, and occasionally a pipe

at my local independent shop, to keep it in business. It's pleasing to walk in, find an old favorite tobacco or something new

to try, and walk out with it in my pocket. Sometimes it's worth the extra four or five bucks.

northernneil · Oct 8, 2013

I try to support my loacal tobacconist as much as possible. And you think your tin prices are high, try $50 for 50grams, bulk is $0.75 per gram. This is all government and has nothing to do with the shop owner. However, going to a tobacconist is an experience that you cannot get online. The knowledgeable staff and ability to handle the products makes decesions much simpler!

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