CAO Vision

[Shelby07]

I just had one and I agree that they are overpriced. I liked it though. It got me thinking how do they determine the price of cigars ? I wonder if the high price on these is because of the box. I wonder if the high price of the Sopranos is because of the box, the show and the commitment to HBO.

There's no doubt about it. They are paying for the licensing of the logo and the name recognition.

Over the Xmas holidays I helped out a friend who works for Brunswick. We sold billiard balls for a particular price. We also had billiard balls with NFL, MLB and NBA team logos available. Exact same product... double the price.

Keep in mind that the retailer's markup is usually a percentage of their cost, not a fixed dollar amount. So if a box of cigars costs a retailer $50 and his markup is 100%, he'll sell that box for $100. However, if the same box comes in with a well known logo and the licensing fee is an additional $25, then his cost goes up to $75 and he sells them for $150 -- $25 more than the licensing fee.

Edit: Before I get accused of anything (like spreading misinformation) let me clarify that the dollar figures used above are strictly for ease of explanation and do not reflect actual costs or mark-up percentages.