My Little Inventory

Inventory is everything to a retail Tobacconist. As we wrap up the fiscal year and analyze our inventory, it is hard to imagine that something so important, precious, and vital can be articulated on a few sheets of paper. The final printout for the year is 61 pages of SKUs, descriptions, costs, and more numbers. There are some oddball figures like 23,000 matches, 740 logo guillotine cutters, 111 pipe filters, 201 pipe screens, -927 waters, and probably $20,000 (retail value) worth of stolen products - this is something the public rarely realizes, but shoplifting is a brutal reality inside walk-in humidors; plus damaged cigars! I smoke so many damaged cigars I think I could play the flute professionally since my finger muscles are so well developed.... but I digress.....

What strikes me every time I do inventory is just how amazing the breadth and depth of our inventory is. In my little 680 sq/ft store the (Certified) Tobacconists have to be familiar with 100+ pipe tobaccos, 300+ cigars, 22 brands of rolling papers, dozens of pipes, humidifiers, humidors.... its even too daunting to summarize; but somehow we do it. Of course, we try to have specialists for every department, but it is still an overwhelming amount of knowledge to retain.

Currently, TU is working with companies who realize the unique challenges Tobacconists face, and together we are researching and developing new ways to help Tobacconists stay educated about their products. While TU teaches consumers and Tobacconists directly through the University, we are also trying to influence the way the industry teaches Tobacconists and customers. Getting manufacturers and distributors proactively involved will dramatically improve the amount of knowledge Tobacconists impart on our customers and society, thereby improving customer service and satisfaction. Just imagine, if it's hard for Tobacconists..... what are our customers thinking? Well, .... don't worry, we are on it.... but if you have any suggestions, please let us know!

Humidor Etiquette: FAQ content preview

Retail walk-in humidors must be rigorously maintained. Their temperature, humidity, air quality, and sanitary standards must be perfectly kept to preserve the cigars and protect the customers that smoke them. People walking in and out of retail walk-in humidors bring germs, dirt, and debris into the environment, so many steps must be followed to protect the cigars. Firstly, Tobacconists must regularly dust, sweep, mop, and vacuum their humidors. But it takes both customers’ and Tobacconists’ efforts to maintain the integrity of the cigars in a walk-in. Ultimately, Humidor Etiquette is about following the ‘golden rule’ and doing unto others as you would have done unto you. The following etiquette rules apply to both consumers and Tobacconists who use a retail walk-in humidor.

NO SMOKE
The natural aromas of a walk-in humidor are a subtle co-mingling of different tobaccos from all over the world. Part of the reason Tobacconists make their walk-ins accessible to customers is so that they can enjoy the smell of aging tobaccos. Lit tobaccos will overwhelm the natural aroma of a walk-in and excessive smoke can taint the flavor of the cigars. Not smoking in a walk-in is part courtesy to the next customer and a way to protect the cigars themselves.

TOUCHING CIGARS
Ultimately, the head of a cigar will enter your mouth, so cigars must be treated with the same care and respect as food. Maintaining clean hands when touching cigars is imperative. It is important for Tobacconists to have sanitary soap and hand sanitizer on hand for personal and customer use. In addition, when inspecting cigars you should only touch the foot and shaft area. Never touch the cigar above the band (head and shoulders) since someone will eventually put that cigar in their mouth.

SMELLING CIGARS
As consumers, we all have the right to smell the wrapper and foot of a cigar. In fact, that is part of the enjoyment of picking a great cigar. While smelling cigars can be part of the pre-selection process in a walk-in, it must be done in a sanitary and respectful way; as the nose contains germs and mucous that must be kept off cigars. If the cigar is wrapped in cellophane, push the cigar half-way out of the cellophane. Cellophane smells like cellophane so there is no point in sniffing it: when finished, you can push the cigar back in. Whether smelling just the wrapper or the foot of the cigar, always keep the cigar at least one inch from your nose and/or facial hair. One inch is close enough to sample the aroma of the tobacco yet far enough to minimize contamination.

SELECTING CIGARS
Now that we have covered the proper techniques to touch and smell cigars, we can address the more general process of picking one out. Some customers take the first cigar out from on top of a box, while others like to scrutinize every single cigar. To each his own method; there is no right or wrong. But, when pulling cigars out of a box, one must be very careful not to tear the wrapper or damage the head: in particular, the cigar foot is highly susceptible to damage. If you take cigars out of a box, lay them in a safe place and return them carefully when you have found your perfect cigar.

DAMAGED CIGARS
One of the biggest economic challenges for retail Tobacconists with walk-in humidors is minimizing the amount damaged cigars: it is a massive expense unique to our business. While some cigars come damaged from the manufacturers/distributors, most damage occurs because of consumer mishandling. Retail Tobacconists absorb the cost of damaged cigars since they cannot be sold at standard retail margins. If you see damaged cigars in your retail Tobacconist’s walk-in, let them know: they will thank you for it.

RETURNING CIGARS
Sometimes you take a cigar all the way to the cash register and then decide that you don’t want it - that’s ok. As long as you're handling the cigar properly, you can return it to the walk-in. When returning a cigar to the humidor, it is always best to place it in the proper box with the head up and cigar band facing forward. This is called “facing” and retail Tobacconists do it every day to honor the brand, cigar maker, and our customers.

Most retail Tobacconists will not allow customers to buy a cigar, take it out of the shop and return it at a later date. Due to cigars’ precise humidification and temperature requirements, plus the fact that they will end up in your mouth, cigars must be treated like perishable food.

OFF THE FLOOR
Keeping cigars off the floor is obvious, but it is also important not to place boxes on the floor, either. Placing cigar boxes on the floor contaminates them with the same dirt, debris, and germs that people’s shoes have been tracking in. This piece of humidor etiquette is particularly important for Tobacconists to heed since it is easy to forget when stocking and organizing the walk-in.

New Customers: Car Dealers

The New Customer:

Customers are defined by their Values.

Tobacconists are defined by the Value they Add!

Some of our best customers are car salesman and dealership owners. I can count hundreds of thousands of dollars in income from car salesmen and dealers since I have been a Tobacconist - their business has more than paid for every car I have owned over the years. These are truly special customers, for many reasons.

Firstly, dealership owners tend to be the embodiment of the products they sell. They are freedom loving, individualistic, and quintessentially American businessmen. This is also a pretty good description of the average cigar smoker too!

I have had several dealership owners who regularly purchased large quantities of cigars for themselves and their staffs.

Many owners and salesmen shop with us when they want to thank a [shared] customer who just purchased a car. - Maybe we should encourage our customers to tell their car salesmen that they love cigars from 'put your store name here'.

Another benefit of the car salesman/dealer customer is the great deals. Both my customers and I have benefited greatly from these special customers - as always, cigar smokers share a special bond.

Perhaps the most interesting benefit of the car dealer customer is the event potential. I once had a formal cocktail party/cigar tasting event in the service garage of the Land Rover dealership. I must qualify that the garage was beautiful, spotless, and oddly elegant when filled with luxurious automobiles. In addition to this type of event, there are many other opportunities for marketing, promoting, and co-branding with car dealerships and clubs. Some ideas include:

• share mailing lists
• car club meetings at your shop
• outdoor booth at dealer and club events
• showcase luxury automobiles at your shop
• offer gift certificates or coupons to a dealership's customers
• give a free cigar to new car buyers, like when a baby is born
• negotiate special offers for your customers from a dealership
• advertise in a dealership or car club brochure, internet site, or newsletter

So the lesson is.... get to know the car dealers and salesmen in your area. Find out if you can work together to better service your customers. And treat them well, as they will you.

New Customers: Motorcyclists

See New Customers: Car Dealers and substitute the word "Car" with "Motorcyclist" - this will save on redundancy..... you will get the point.

Tough Times = Better Business

I have been getting lots of emails from Tobacconists worrying about, and struggling with, the current economic downturn; not to mention innumerable conversations on the topic. Overall, I would say half of the retailers I have spoken to say business is down significantly. The other half are either flat, or [claim to be] growing - but much of the growth is from newer stores. Either way, these are difficult economic times and many people are hurting.

My retail businesses are down a few percentage points. To me, this is a significant problem: if it wasn't for [some of the annual vendor] price increases, we might be down 8 to 10%! And of course there is the rising cost of freight, energy, rent, and everything else. Ultimately, if you're not growing, you're declining.

Now we must do some things to CUT COSTS:

• Re-negotiate our CC* processing fees
• Re-assess our phone line(s) usage
• Tighten up Labor
• Look for more profitable products
• Start charging for freebies, like water, shipping, etc...
• Buy more generic packaging materials: zip-top bags, shopping bags, etc... (in fact, we have cut back to just one size zip-top bag for cigars - I really miss the 4x8 but the 5x10 fits everything)
• Clean & Organize! This process will help you find dead weight, inefficiencies, and opportunities

*The credit card processing fees, in particular, are a great place to start: get a quote from their competitors and ask your company to match the price - last year we saved over $500 per store!

While cost cutting is important, I am much more fond of re-investing, making improvements, and enhancing service. I have been through tough times before and always made money. The only way I know how to get through them is to be proactive; not to shrink in fear - don't make decisions rooted in fear. Already this year, my shops have seen new computers, cabinets, furniture, products, and more. Keeping the shops fresh and invigorated is imperative during tough economic times: Customers Will Notice! Even if customers don't say something about your proactive efforts, they will notice both consciously and subconsciously.

I think the worst thing you can do during difficult times is:

• Shrink Inventory Noticeably
• Change Your Vision (i.e. get rid of great cigars and replace with bundles)
• Decline Service Standards (Step It Up!)
• Complain to Your Customers (Don't Lie & Don't Whine)
• Make Decisions Based on Fear

If anything, this is the time to be grateful for your existing customers: say hello, please, and thank you; fulfill special orders; ask them what they want and exceed their expectations! Frankly, a great cigar is just what we need during difficult economic times. We are in the business of selling relaxation, quality of life, decompression, escapism, and camaraderie - the cigars are consumable but the value is priceless. I see many new and old faces coming through the shop lately and they look like they need a cigar! This is a great time to provide a sanctuary to your customers - they will be grateful for it.

** If you need help, suggestions, advice, ideas, or would like to contribute some, please send us an email.

Price Everything: content preview

In retail, it is imperative to price all of your products. There are countless stories from customers who have asked for prices and received different answers (on different occasions) from their Tobacconists. This leads to a lack of trust, loyalty, and eventually a declining business. Not pricing products can also lead to selling them for less than our standard markups, so pricing everything protects our margins.

Ultimately, we owe our customers a clearly articulated price on every item in our store: it is one of the fundamentals of professionalism. While every Tobacconist knows that pricing the hundreds or thousands of products in our store is a challenge, it must be done.

The pictures in this section show a myriad of pricing techniques and styles: some products are priced discreetly to avoid 'cluttering' the display, while other products, like cigars, have very prominent labels. Labeling decisions are up to the individual Tobacconist, but every product should still be priced.

Certified Tobacconists have committed to Price Everything when they accept the Code of Ethics & Standards.

Default Positions: content preview

According to the CRT Code of Ethics & Standards, a CRT must:

Merchandise all Luxury Tobacco Products with the same care and respect it took to create them.

Merchandising is the physical and visual language with which our products communicate with the customer; and it should be commensurate with the quality of the product and your store.

Special Merchandising involves creating a new display/arrangement which will capture the customer's eye and generate a sale. Other times the effects of merchandising are more subtle, but it will convey that you have an organized, clean, and thoughtful approach to your products and profession. This type of Day-To-Day Merchandising has a powerful impact on your customers even if they do not consciously respond to it or acknowledge it. Good, Clean Merchandising projects professionalism. Haphazard and less-than-clean merchandising says 'we don't care enough'. I stress the word clean here with the intention of conveying two meanings; Clean can refer to uncluttered as well as not-dirty. Every Tobacconist knows that our stores are practically dust factories so it is imperative to keep lighters, cases, humidors, and other products polished and clean.

With these fundamentals already established, we can get to the heart of Default Positions and Retail Theater. In every store, every product, display, machine, chair, ashtray, and instrument has a home; a default position. Events, Receiving Inventory, Customers, and sales will all 'disrupt' organizational equilibrium. In fact, the unique nature of our business creates customers that 'feel at home' when they are in our shops. While this may be our customer service goal, it can also lead to messy stores. Customers move furniture, ashtrays, products, and anything else in order to accommodate themselves; but the 'inmates cannot run the asylum'. So Tobacconists must be thoughtful and proactive about RESTORING DEFAULT POSITIONS. Without this attention to organization a Retail Tobacconist will degenerate into a flea market-like booth instead of the professional luxury retailer that it is.

In the theater, every actor and prop has a 'mark': a physical location where they must be at any given point in time. And Retail Tobacconists are no different. We must have predetermined strategies and layouts for our facilities to keep them from falling apart and running amok. This may seem like a small or frivolous point to a novice or inexperienced Tobacconist, but it is critical to Retail Theater. As a Retail Tobacconist with two stores, I can tell you that a big part of my job is teaching and enforcing Default Positions. If we did not do this successfully, the stores would begin to look like disheveled war zones.

Be disciplined about Restoring Default Positions, and if you don't know where something belongs, ask someone who does. Put things where they belong and then you and your customers will know how to find them. Organization can really be the key to success, and with a little discipline, even disorganized people can become functional retailers. Otherwise, you might as well just sell stuff out of the back of a van*.

*No disrespect was meant to people who sell things out of their vans. In my teens I sold clothes and swimwear out of my van and found it to be fun and profitable. But, this guerrilla style approach to business was not nearly as fulfilling as being a Retail Tobacconist.

5 Keys To Retail Tobacconist Success

by: Jose Blanco, Marketing Director, La Aurora Cigars

1. Customer Service
2. Product Availability
3. Store Image
4. Pricing
5. Product Knowledge

*Supplemental Contribution by Jorge Luis Armenteros, CMT: Blanco's 5 keys are short and to the point. We will see if he ever wants to elaborate on these... I have audio tape of him talking about them as he drove me through the streets of Santiago, but the car horns and cursing obfuscate the academic lesson. It really is that simple: Focus on Service, Products, Image, Pricing, and Product Knowledge!!!! That is all it takes.

TRUST, TRUST, TRUST

"Trust is the cornerstone of Tobacconist credibility. Trust is earned through honest and diligent efforts, not once, but consistently, over long periods of time. In general, consumers are wary of advice, opinions, and salespeople. Tobacconists earn the Trust of consumers one cigar or pipe recommendation at a time. Eventually, Trust will emerge and be the irrevocable glue that bonds a customer to their Tobacconist." - TU Code of Ethics & Standards

Trust is the foundation of every relationship....

If you take the bands off of the cigars in your humidor, or the labels off of your pipe tobaccos, pretty much everything looks like generic or commodity products. In fact, without smoking the products, our senses tell us relatively little about the true qualities of luxury tobacco. Consumers are influenced by aesthetics (cigar band & box attractiveness), their peers, and most surprisingly, consumers often believe advertising and internet copy. But the best advice in a retail humidor comes from a retail Tobacconist.

Retail Tobacconists are the only members of our industry who must be accountable to our customers in a face-to-face environment. In fact, retail Tobacconist survival depends on building and maintaining Trust. Just like you trust your attorney and accountant when they give you advice, your butcher to not sell you rotten meat, you Trust your Tobacconist to understand your needs and respect your time and money.

Building Trust takes time, commitment, and consistency. This is not a fly by night, get rich quick business. It takes many years to become a good Tobacconist, and decades to become the best. In that journey a retail Tobacconist cannot be afraid to say "I don't know" or sell a less expensive product when it suits their customers' needs. Retail Tobacconists must do the right thing every time to keep our customers coming back.

Build Trust, and everything else will follow.

Planning A Future (part II)

I employ about a dozen retail Tobacconists, most of whom are Certified and the others are apprenticing. I provide health insurance for those who need it and I consider it my responsibility to help my Tobacconists develop as people and professionals. An organization is only as good as its people, so this is an easy investment to make. The best reward for this is that my turnover is 3 years, so I keep happy employees for a long time: that pays for itself! Additionally, I have had many employees move on in the industry and go to work for prestigious companies, so I sometimes feel like we are making a positive contribution to the industry. But, when Tobacconists ask me what I think about them opening up a retail store, I tell them they are CRAZY!!! Now let me qualify, 9 out of 10 people want to own their own business, but probably 1 out of 10 are capable. So I am partly trying to filter out 'talkers' from 'doers'. Running a normal business is hard enough; running a retail tobacco business can feel like guerrilla warfare.

But recently I felt a little guilty about my position on the matter. Isn't it two-faced to do all that I can to "Preserve Luxury Tobacco for Generations to Come", and then discourage talented individuals from becoming retail Tobacconists? Perhaps... I just want to make sure there is a bonafide future in it for them. There are many retail Tobacconists that are semi-retired with plenty of money in the bank that don't care if the industry succeeds or not, they just want to partake in their hobby. And there are plenty of wealthy hobbyists in the industry as well. In fact, most of the industry is made up of middle aged, affluent men. This is no surprise, but it does not bode well for our future. We need young blood. We need more passionate men and women in their 20s and 30s coming into the industry.

So on Saturday morning I am sitting in the shop, talking with a cigar salesman who I like and respect. I'm looking at him thinking "thank God for young guys like you coming into the industry". But danger lurks in the shadows. I have seen this before. Will he leave in six months to go sell HP printers or telecommunication services, or whatever? I have seen them leave us before. How do we keep young talent? How do we inject enough innovation and credibility back into this industry to preserve it for generations to come? If we can't keep our best and brightest, we will certainly fail.

There is far too much taxation and legislative uncertainty in our world to promise anyone a bright future. This must change. The industry must rally behind a plan to promote our acceptance and credibility in society. We must stabilize the hemorrhaging and strengthen our foundation while projecting our credibility. We must focus on getting young, innovative, passionate souls into this industry NOW!!! And work on giving them a future with hope and promise instead of fear and uncertainty.

I'm on it. Are you?

PS: remember, retail Tobacconist Certification is free.

I Love Tobacconists

I feel remiss in not having written in a couple of weeks..... but I would like to follow up and say that the Tobacconist University Certified Lapel Pins finally arrived and they ARE Spectacular!!!!

But that is not why I am inspired to write today. I just came from a meeting of our State Retailers association. It is a unique group filled with retailers from all walks of life. Our members are Retail Tobacconists with different specialties and stores that serve very different markets. To put it mildly, it is a diverse group. I'm amazed at the diversity of opinions in our meetings. While we are all essentially in the same profession, you would think we weren't. It is amazing to see so much disagreement and lack of consensus. But that is par for the course in the tobacco industry: cigarettes pitted against cigars, retail against mail order, etc.... We are severely fractionalized, divided, and constantly on the defensive: fighting legislators, taxation, oppression, and sometimes ourselves. Even with all of the different opinions floating around in that room, and different agendas, there are some underlying commonalities, which I admire and respect greatly. I didn't start writing this to complain about my fellow Tobacconists. In fact, I leave these regular meetings a little frustrated at the state of our State and Nation, but I also leave rejuvenated. I'm not rejuvenated because we came to any sound conclusions or had any great ideas. I'm invigorated because I'm reminded of why I choose to stay in this industry. Stay and fight for what I believe in; both in terms of freedoms and values. Above all, most Tobacconists I meet are GREAT people. Sometimes I think they are the only people left who actually care about the products they sell. We are Customers, first and foremost. And we are committed to what we love, no matter the challenges, because our passion is undeniable. I can't think of any other profession facing so many obstacles. Yet I have never seen so many fine people so committed to fighting the good fight and doing the right thing. Sure I'm biased, but that doesn't change the fact that I Love Tobacconists... and you should too. Don't let this part of our culture, this venerable profession, die. Support your local Retail Tobacconist, and tell your friends to do so as well. I would argue that nobody works harder to satisfy their customers, than Retail Tobacconists.... and I promise you, they aren't doing it just for the money.

THE LITTLE PIN THAT COULD

In almost a decade we have certified dozens of Tobacconists in Princeton, NJ and in Pennsylvania. By the end of this year we will complete the first generation of our four college Academic Curriculum. In addition we will, in all probability, have over one hundred Certified Retail Tobacconist individuals (CRT) throughout the country by the end of 2008. This is a small, but historic step, in a long and uphill journey. This generation of Certified Tobacconists will wear the first ever Tobacconist University Certified pins (see Certified logo in sidebar). These are the same antique brass type pins that U.S. Senators and Congressman wear on their lapels, and to me they are equally special.

I am writing today because I just approved the proof for the pin and it prompted me to think a little about its significance. I know that the pin is a reflection of academic achievement, our adherence to the Code of Ethics & Standards, and also a symbol of pride, sacrifice, and accomplishment. We are proud because we work in an industry filled with generous and extraordinary people (both producers and consumers) as well as with special products. We sacrifice income, honor, and public credibility every day because tobacco has become ‘anathema to our modern society’. Now, through our bona fide accomplishments, luxury Tobacconists can take back their integrity and place in society as esteemed professionals; no less than sommeliers and chefs. Above all, we are individuals who have chosen to work at what we love and to follow our passions.

This brings me back to the pin. The pin is for Retail Tobacconists; those who serve their customers in ‘Brick and Mortar’ tobacco shops. Frankly, we may be a dying breed. Over the last decade we have seen the proliferation of Internet mail order and anti-smoking laws: both of these are formidable forces. As if the anti-smoking laws weren’t enough, the Internet threatens to commoditize the products we sell, and Retailers are challenged to provide increasing value to our customers: a challenge we can live up to. When a customer sees the pin, they will learn that their Tobacconist goes to great lengths to serve them. Customers will then realize the same educational resources their Tobacconist used are freely available to them. If we can educate and enhance appreciation then we can change the culture we live in: one Tobacconist at a time, one Customer at a time.

Soooo…. Look for the Pin.