Am I Doing the Math Right? Pricing Strategies for Retailers and Brand Owners

Pricing isn’t just about numbers—it’s about strategy, positioning, and long-term viability. Get it right, and your business thrives. Get it wrong, and you’ll either bleed profit or lose customers. Whether you’re a retailer managing inventory or a brand owner setting an MSRP, the way you price your product has direct consequences on how your business is perceived and how sustainable it really is. Many in the premium cigar industry treat pricing as an afterthought, but in reality, it’s one of the most powerful tools you have to establish credibility, create demand, and drive profitability.

For retailers, pricing is more than just applying a standard markup. Taxes, operating costs, consumer buying behavior, and competitive landscape all come into play. Too many retailers fail to account for the real cost of doing business, leading to margins that don’t justify the investment. A strong pricing structure means knowing exactly where every dollar is going—from wholesale cost and excise tax to shrinkage and operational expenses. More importantly, it means knowing how your pricing influences consumer perception—because in a world of countless options, perception is often more powerful than reality.

For brand owners, setting an MSRP isn’t just about covering production costs. It determines where your product sits in the market, how retailers perceive your brand, and whether consumers view your cigars as an everyday smoke or a special occasion indulgence. Price too low, and you might struggle to be taken seriously. Price too high, and you’ll have to justify that premium in every touchpoint—from packaging and storytelling to quality control and brand presence. Smart pricing isn’t just about ensuring profitability—it’s about reinforcing your brand identity and securing your place in the humidor.

At its core, pricing is about understanding your market and your customer. Are you positioned for volume, or are you crafting exclusivity? Are you competing on price, or are you defining a category where price becomes secondary to brand loyalty? The most successful cigar businesses don’t let the market dictate their pricing—they control the narrative by knowing exactly what their pricing says about them. If your strategy is just to be a few cents cheaper than the competition, you’ve already lost.

Most businesses assume they’ve got their pricing right—until they realize they don’t. There’s a science to it, but there’s also an art. The difference between a business that survives and one that thrives often comes down to knowing when to adjust, how to position, and how to create value beyond just the tobacco inside the cigar. The Cigar Profit knows what works. Do you?