New here-Cuban ?'s

[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.

[ggiese]

wow. Someone just pressed George's button.

Yeah - I'll admit it - I am a bit "rattled" by Craig's thoughts. I'm really trying my damndest to get my head around Craig's thinking.

Cigar pricing seems to me to be pretty objective, although it's hard to argue that there might not be some subjectiveness to it. Maybe it's overkill, I just keep coming to the same place no matter how I slice and dice it. Maybe I'm missing something, (not withstanding Lew Rothman's opinions) there's no way it's logical to conclude that a cheap cigar is only "pennies" difference to produce than a high-end, top of the line premium.

Bottom line - while "opinions" are mostly okay, I think whomever reads our forum is entitled to the RIGHT information. So, for example, if a member writes a cigar review suggesting that a La Flor Dominicana Chisel is the mildest cigar they've ever tasted - you can confidently bet your next paycheck I'll be asking some "clarifying" questions!!!

But yes, Will, I am anxiously awaiting understanding of what I may have missed here...

[badwhale]

Maybe "pennies" is the exaggeration.

On the other hand, is a Padron 80th ($30) really $26 more expensive to produce than a 3000 ($4)?

[badwhale]

Also, the examples you give of Zippo vs. St. Dupont (or however the hell I just typed that wrong... cue CC)
or a Bic vs. a Mont Blanc...I can't really get behind either.

Both lighters do the same thing, ultimately. Excluding the diamond encrusted versions, they both comprise basically the same amounts & types of materials. And the pens, well, I never understood the allure of a fancy pen. I've had some shitty pens too, don't get me wrong, but the Bic, although cheap, has always done it's job. Because the cigar experience is subjective (unlike a lighter or a pen) I CAN justify an occasional Padron 80th.

My neighbor has been enjoying cigars with me for the last year or so. He honsestly prefers Padron maduro londres over a PAM corona.

I'm not saying that a cheap short filler cigar is virtually the quality / cost to produce as a high end cigar, just that as you move into "high end" cigars, they are making considerably more of a profit. How much more? I don't know.

[ggiese]

Also, the examples you give of Zippo vs. St. Dupont (or however the hell I just typed that wrong... cue CC)
or a Bic vs. a Mont Blanc...I can't really get behind either.

Both lighters do the same thing, ultimately. Excluding the diamond encrusted versions, they both comprise basically the same amounts & types of materials. And the pens, well, I never understood the allure of a fancy pen. I've had some shitty pens too, don't get me wrong, but the Bic, although cheap, has always done it's job. Because the cigar experience is subjective (unlike a lighter or a pen) I CAN justify an occasional Padron 80th.

My neighbor has been enjoying cigars with me for the last year or so. He honsestly prefers Padron maduro londres over a PAM corona.

I'm not saying that a cheap short filler cigar is virtually the quality / cost to produce as a high end cigar, just that as you move into "high end" cigars, they are making considerably more of a profit. How much more? I don't know.

Wow... Interesting. You might not understand why you'd sign your name with a Mont Blanc or light your cigars with a S.T. Dupont when there are suitable alternatives (BTW - purposefully chose not to represent a "diamond encrusted" S.T. DuPont lighter against the Zippo - I chose a "low-end" DuPont to be more fair in the comparison. It's very hard to argue that a Mont Blanc or S.T. DuPont is the exactly the same as a Bic or Zippo except for the price. And even more incredible to argue that production costs are even in the same ballpark...

So if I'm following what you (and Craig) are saying - cigars made in one of the many shops in Guatemala cost within "pennies" of the cigars made at the Arturo Fuente factory in the DR?

Take it one step further to put this in better perspective... I get it - the neighbor would rather spend his money on a Padron Maduro Londres over a PAM Corona, but if it's just "pennies" (or even a few dollars) difference, why does a PAM Corona cost signficantly more? If they're both created from the same process using the same materials with the same craftsman both cigars and equal in every way, why, then, the difference in price? Is it because Padron is looking to make absolute maximum profits on their PAM Corona - versus just blowing out the Padron Maduro Londres? There would have to be a better explanation....

One of my biggest personal mistakes I've made was to buy my first "luxury" car. Some would argue that a car is a car is a car - so why would it be a "mistake"? It was significantly more expensive that what I'd previously driven, and was truly a dream to drive compared to what I was used to. I must admit - it will now be quite an adjustment for me to go back to my Yugo. But - bottom line - it was not manufactured to the same standards with the same materials and production costs within a "few dollars" of what I'd previously driven.

Same with cigars. It's impossible to imagine, having smoked a number of them, that a Padron 80th is manufactured to the same standards with the same materials and production costs within a "few pennies" (or even dollars) of a Thousand series cigar. I would argue, my friends, the Padron 80th does cost hard dollars to create versus the mass production of the Thousand series. If not - EVERY cigar Padron made would be very much the same and there would be no difference in cost.

Perhaps we can get a Padron rep to give us the backstory on production costs. What I'm hearing from you and Craig is very much contrary to the explantions I've been given in various conversation with cigar factory reps...

[badwhale]

One of my biggest personal mistakes I've made was to buy my first "luxury" car. Some would argue that a car is a car is a car - so why would it be a "mistake"? It was significantly more expensive that what I'd previously driven, and was truly a dream to drive compared to what I was used to. I must admit - it will now be quite an adjustment for me to go back to my Yugo. But - bottom line - it was not manufactured to the same standards with the same materials and production costs within a "few dollars" of what I'd previously driven.

Perhaps we can get a Padron rep to give us the backstory on production costs. What I'm hearing from you and Craig is very much contrary to the explantions I've been given in various conversation with cigar factory reps...

For the record, I specifically avoided a car comparison so as not to bring up the painful Yugo memory.

Of course a Padron rep would be able to "justify" a 26 dollar disparity...

[ggiese]

For the record, I specifically avoided a car comparison so as not to bring up the painful Yugo memory.

Of course a Padron rep would be able to "justify" a 26 dollar disparity...

Maybe I'm reading into this, but I'm sensing (because you put justify into quotation marks) that you think the Padron rep would not be able to adequately "justify" a 26 dollar disparity for you, no matter what the "facts" were. (...other than, perhaps, "...because we can charge that much". Right?!?)

...and just so you know - I also had to "justify" buying a "luxury" car when I coulda bought a Chevy Impala. (Please don't tell the spousal unit - but I used the fact that they no longer manufacture Yugo's as a justification for my "eccentric" purchase).

I know Lew Rothman is a poster child for justifying "cheap" - but I do believe there's more to the story than Lew tells it...

[badwhale]

Maybe I'm reading into this, but I'm sensing (because you put justify into quotation marks) that you think the Padron rep would not be able to adequately "justify" a 26 dollar disparity for you, no matter what the "facts" were. (...other than, perhaps, "...because we can charge that much". Right?!?)

...and just so you know - I also had to "justify" buying a "luxury" car when I coulda bought a Chevy Impala. (Please don't tell the spousal unit - but I used the fact that they no longer manufacture Yugo's as a justification for my "eccentric" purchase).

I know Lew Rothman is a poster child for justifying "cheap" - but I do believe there's more to the story than Lew tells it...

Yes, you're right, I would take anything a cigar rep says with a grain of salt.

I don't like to use words like "cheap" or "luxury", but rather "value."

PS, I knew I typed S.T. Dupont wrong on the fly.

[badwhale]

Oh, and when I was mowing the lawn, I thought of an example that hits closer to home for me, and maybe is a good comparison. Craftsman wrenches vs. Snap-on wrenches.

Both are forged steel with chrome finish. Both have lifetime guarantees, but a Craftsman is significantly less than the Snap-on. Why is this?

They both will tighten, or loosen nuts / bolts. This is not subjective, so why is Snap-on or Matco the "professionals" choice over the weekend warrior Craftsman?

[Devil Doc]

I'll tell you a story, Will. I don't know how germane it is, but I like telling stories. When I decided I wanted to take up sporting clays, I bought a $2000 Beretta. I won a lot of tournaments with it and shot myself into AA. I then thought I could justify purchasing a Perazzi SC3, Considerably more money. Actually, a lot more money. I never again won a shoot, but a day on the course doesn't go by when someone asks to just hold the gun.

Doc

[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?

[badwhale]

I'll tell you a story, Will. I don't know how germane it is, but I like telling stories. When I decided I wanted to take up sporting clays, I bought a $2000 Beretta. I won a lot of tournaments with it and shot myself into AA. I then thought I could justify purchasing a Perazzi SC3, Considerably more money. Actually, a lot more money. I never again won a shoot, but a day on the course doesn't go by when someone asks to just hold the gun.

Doc

True. I've hit more claybirds with my Remington 870 express than my Silver Pidgeon. I don't look up or down at what people decide to spend their money on. Some stuff I can relate to, others not so much.

The real question here is in the secret dark vaults of manufacturing overhead & marketing voodoo, how much more does it take to make a Padron 80th than a 3000, or a Snappy ratcheting wrench than a Craftsman, or a Lexus over an Avalon, or a Perazzi over a Beretta.

I suspect as consumers, we'll never know.

[kevin7]

As long as my clothes are made by 3 rd world forced child labor I'm happy

[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.

[TheGreekTitan]

Lack of cigar knowledge is part of why I joined here, so I will leave that to you gents. However, like it or not, here is my 2 cents on the discussion. It's not comparing Bics' to Mont Blancs'. Is Acura that much better than Honda?...or...Infiniti over Nissan?...Lexus over Toyota?...the list goes on and on. Will made a good point earlier about the difference between Craftsman and Snap-On...What is it, really? In my humble opinion...a HUGE part of it is marketing and perceived value. What can we get for it? What is this "perceived value"?

In my business, I can charge X amount of dollars on one side of town and Y amount of dollars on the other side of town for the exact same job. When I first started in business for myself I DID NOT do this. I felt it was cheating, and taking advantage of one side or the other. The funny thing is, I got very few jobs where I was the lowest bid in A town, but got over 40% in B where I was typically upper middle. It wasn't until I upped my bids considerably in A town until I started landing deals. Even though I had an proven record all over the metro area, because I was the lowest bid in their part of town they didn't trust me. Fine, I'm happy to make more money for the same amount of labor and material. Thank you very much, tell your neighbors...PLEASE.

That said, even though I'm a newb at cigars, I can tell the difference between an good stick and a not so good. I don't know what all goes into them, nor what it costs. I can tell you that I believe the difference between an $5 stick and an $20 stick from a manufacturing standpoint is NOT $15.

BTW I'll take my Uniball Jetstream over my Mont Blanc any day.

[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......