New here-Cuban ?'s

[CoventryCat86]

Jaguars cost more to make than many cars, far less cars produced per year is one reason there are others too but mostly the fact that they're English.

I'll be the first to admit they're not very "practical" cars, that's for sure......

[craig]

Of course it is a simplification - development /storage/carrying costs are not included, for example, nor is the price of the packaging/band/marketing. However, if one looks at what farmers are paid for tobacco and what workers get paid to process - then Lew's point that the cost doesn't vary that much is pretty close to the truth.

The main point is that the price you pay for a high-end luxury good has little to do with the actual cost of production. A Cohiba costs more to make than a Quintero, but the difference is closer to pennies than to 10's of dollars. I grew up in the garment industry and the same is true there. If one likes reading more on the web, then I found the cost comparisons of an iPad vs. Kindle quite entertaining, as were (to me) the comparisons between a pickup vs. an SUV based on that pickup.

[ggiese]

Of course it is a simplification - development /storage/carrying costs are not included, for example, nor is the price of the packaging/band/marketing. However, if one looks at what farmers are paid for tobacco and what workers get paid to process - then Lew's point that the cost doesn't vary that much is pretty close to the truth.

The main point is that the price you pay for a high-end luxury good has little to do with the actual cost of production. A Cohiba costs more to make than a Quintero, but the difference is closer to pennies than to 10's of dollars. I grew up in the garment industry and the same is true there. If one likes reading more on the web, then I found the cost comparisons of an iPad vs. Kindle quite entertaining, as were (to me) the comparisons between a pickup vs. an SUV based on that pickup.

...the price you pay for a high-end luxury good has little to do with the actual cost of production

That, my friend, is the textbook example of a "sweeping generalization". I wholeheartedly disagree with that statement. And - I think you'd find it very difficult to defend.

A Cohiba costs more to make than a Quintero, but the difference is closer to pennies than to 10's of dollars.

You're suggesting it is within a few "pennies" to make a short filler (left over scraps) machine made cigar, versus a long filler hand made cigar? And (more importantly) a low-end machine made cigar versus a handmade cigar that is made by the best cigar rollers Cuba has to offer? Seriously?!?

Rather than quoting Lew Rothman, I'd suggest you quote someone within the Cuban tobacco industry that is in "the know" about actual cost of production. The manufacturer really can give a better cost gauge than someone who is known for buying truck loads of "leftovers" from production runs the manufacturers are trying to close out. It's rather like inferring Trader Joe's is the expert on the cost of producing wine because they can give a good price point for "two-buck Chuck".

[ggiese]

Before you get all defensive on me Craig, please consider this...

...the price you pay for a high-end luxury good has little to do with the actual cost of production

Your overall statements (including Lew Rothman's observations) suggest:



should be only "pennies" in production cost difference with this:




Or...

This:



vs.

[ggiese]

...and the price differences in the "garment industry" for "high-end" versus regular production (with which you say you have some knowledge). I'm grasping here (because I don't work in or around the garment industry), but as a consumer that has "experienced" garments trhoughout my life I'm seeking to understand your rationale here...

Are you suggesting that generic winter coats made for Walmart or Kmart are only "pennies" difference in comparison with winter coats made by/for North Face or Columbia?!? ...shirts made by companies supplying Walmart or Kmart being "pennies" different than shirts made for Ralph Lauren or Nautica?!?

...or purses made for JC Penney or Wackenhut are only "pennies" difference with purses made by/for Coach or Louis Vuitton?!?

And further following your logic - cars made by General Motors or Ford are only "pennies" difference with cars made by Porsche or Lamborghini?!?

There are clear reasons why I would choose a Mont Blanc pen over a Bic - or a DuPont Lighter over a Zippo - and a Ralph Lauren shirt over a Walmart brand. It really has nothing generally to do with the name that's on it (though it is a "promise" through their brand that I'm receiving a high quality product) - but actually much more for me to do with the durability and value I'm receiving for the money I'm spending.

With cigars - While I do enjoy a Quinteros from time to time, there truly is no comparison to a Cohiba or a Davidoff. And - in that - even more mind boggling - could a Quinteros possibly be only "pennies" difference to produce than a Cohiba or a Davidoff?

I think you'd find it far easier arguing that lead can be turned into gold...

[badwhale]

wow. Someone just pressed George's button.

[buzz]

A Cohiba costs more to make than a Quintero, but the difference is closer to pennies than to 10's of dollars.

You're suggesting it is within a few "pennies" to make a short filler (left over scraps) machine made cigar, versus a long filler hand made cigar? And (more importantly) a low-end machine made cigar versus a handmade cigar that is made by the best cigar rollers Cuba has to offer? Seriously?!?

I didn't read this as Craig saying it was within a few pennies, but that it was closer to pennies than 10's of dollars... half way between a few pennies (max 4 cents?) and 10's of dollars (min $11?) would be $5.48, so "closer" would mean anything lower than $5.48, right?

[craig]

I just spent the last 90 minutes writing a better explanation of my points and the damn system froze and rebooted when I pressed submit.

I am off to smoke a cigar.

Reply over the weekend if the thread hasn't been beaten to death by then.

[badwhale]

I just spent the last 90 minutes writing a better explanation of my points and the damn system froze and rebooted when I pressed submit.

I am off to smoke a cigar.

Reply over the weekend if the thread hasn't been beaten to death by then.

[kingbeefy]

I work full time in retail mattress sales (not the most romantic product, though lots of romance happens on them), and part time in marketing. When learning how to sell, then when learning how to market a product I had to learn what motivated people to buy. With the possible exception of some very basic needs people buy emotionally then reinforce it logically. Especially with luxury items, which really is anything we buy that we don't really need, or a nicer, more expensive version of a product when there is a less expensive option for the same product available. Most of what we buy we don't need and while we will work on the back end to justify it (logical reinforcement), the buying process on all these items begins with emotion. A Honda would get the job done, but it just feels better to drive a Mercedes or Jaguar.

Cigar smoking as a whole is a luxury. We all do it just because we like it. It makes us feel good to sit back and light one up. If it was just about smoking we would all be stocked up on the cheapest gas station cigars available. It's not just about smoking, it's about the experience, the taste, smell, draw, construction, but also about the presentation and the stories behind the products. It all works together to create that experience. It takes a better product to create a better experience, but also better presentations and better stories. All of those things cost dollars to create and the ones who are good enough to put it all together and convince me to spend $20 plus dollars on something I will turn to ash deserve more profits than someone who can only convince me to spend $5 on this soon to be ash product. If it were easy to do we would all be selling $20 cigars for insane profits.

My point basically is that as long as you are taking comparable products that have a difference in price and working to justify that difference by the matterial difference alone, you will be left scratching your head. And as long as you are only making practical, logical purchases that are void of emotion, you will likely not ever own much that you truly enjoy.