How Are Pipes Marked Up?

[Winslow]

Is there anyone that can explain how the pipe is priced from carver to purchaser?
That $100 pipe you buy at a B&M,what % does the carver get,the distributor,the retailer?

Winslow :sunny:

 

[gkhanna74]

Good question. I used to work at a tobacco shop in DC 10 years ago -- back then, the retail mark-up was 100%. Not sure how much the distrubutor made

 

[Dock]

I'm pretty sure that most shops nearly double the price on the lower end pipes. I can't comment on details but I have a friend who was a pipe distributor for a major Italian brand. He would take 40% off the sticker price on any of the pipes that I wanted to buy. He was obviously still making SOMETHING for himself even with offering me that discount. Rest assured that pipe dealers aren't just in it for the fun of it...

 

[kilted1]

I think it can be assumed that the first rule of capitalism applies here:

1. Take 1 dollar (or any other currency)
2. Convert it to 2

That said, I'm sure that the carver realizes a 'profit' and that every step between that carver and you the consumer 'steps on' that product to realize a profit as well.

 

[Guanxi88]

I think it can be assumed that the first rule of capitalism applies here:

1. Take 1 dollar (or any other currency)
2. Convert it to 2

That said, I'm sure that the carver realizes a 'profit' and that every step between that carver and you the consumer 'steps on' that product to realize a profit as well.

I'm in the import business a bit myself, and can tell you that your figures are about right. The importer takes 20% to 50% mark-up for his trouble; the wholesaler, probably about the same, and then it gets to the retailer, who takes his own rates of mark-up in about the same range.

These days, though, the import business, to survive and thrive, must either haul in prodigious quantities of highly-desirable crap at low prices, or very small quantities of otherwise unobtainable stuff.

For pipes, the few times I've filled wholesale purchase requests for the Turkish ones, let me assure you the carvers do quite well for themselves.

 

[Anonymous]

I don't remember whether I was discussing this with a shop owner or carver, but I recall something about pipe makers that sell to a shop for resale, doing so for less than they would sell directly to a customer.

I think it's for this reason that many sell from their own stores.

 

[Guanxi88]

I don't remember whether I was discussing this with a shop owner or carver, but I recall something about pipe makers that sell to a shop for resale, doing so for less than they would sell directly to a customer.

I think it's for this reason that many sell from their own stores.

Yes, and this is why the Web is wonderful, as it allows artisans to bring their works to market at a price and in a way that lets the customer have the best price, and the maker the best price. Eliminating the go-between (who was needed, at one time, to facilitate these transactions) has made the whole thing cheaper and more profitable.

The free market in action.

 

[raevans]

Is there anyone that can explain how the pipe is priced from carver to purchaser?
That $100 pipe you buy at a B&M,what % does the carver get,the distributor,the retailer?

From what I can recall from working at a shop..Depending on the carver or company selling the pipes to the B&M - the mark-up would vary between 80% and 125%.

If the pipes came from a company that machine turned the pipes and produced them in mass, the company making the pipes would get $20.00 per pipe, the distributor would double that and sell them to the shop for $40.00 and then the B&M would double that and charge $80.00. If the shop bought a large number of pipes, they would get a discount from the distributor, say $30.00 per pipe and still sell them for $80.00 (I'm pretty sure that if the distributor bought a large number of pipes from the company, they would get a discount as well)

If the pipes came from an individual carver - mark-up was usually around the 80% mark. (There were exceptions to this, depending on the artisan)

Randy

 

[beaupipe]

I don't remember whether I was discussing this with a shop owner or carver, but I recall something about pipe makers that sell to a shop for resale, doing so for less than they would sell directly to a customer.

I think it's for this reason that many sell from their own stores.

Yes, and this is why the Web is wonderful, as it allows artisans to bring their works to market at a price and in a way that lets the customer have the best price, and the maker the best price. Eliminating the go-between (who was needed, at one time, to facilitate these transactions) has made the whole thing cheaper and more profitable.

The free market in action.

Which brings up an interesting question: how many of us buy direct from carvers in the interest of supporting carvers. Pipes are a lot like wine (my business): many (most, perhaps, though I can't defend that) of the finest never see the light of retail. They are tiny production products and if you don't have an in...a relationship with the right person...well forget it. No pipe for you.

Did ya' know that the traditional barrels that Port was sold in are called pipes? I know. Who cares?

 

[raevans]

Yes, and this is why the Web is wonderful, as it allows artisans to bring their works to market at a price and in a way that lets the customer have the best price, and the maker the best price. Eliminating the go-between (who was needed, at one time, to facilitate these transactions) has made the whole thing cheaper and more profitable.

The free market in action.

Yes and no or maybe kinda....

For some of the Artisans, definintely yes, they are getting the best price by selling over the net. For the customer, (if you take out the taxes), not really. If a maker is selling pipes for $400.00 - $500.00 a pipe on the net, that's pretty much the same price that it is going to sell for in the B&M, if it were to go to a B&M. The store is not going to buy something that it cannot sell and if a maker is selling for a certain price over the net, it would not make sense for the B&M to buy at the same price and then mark it up. So the maker is going to sell the pipe to the store for $200.00 - $300.00 and the store will mark it up from that price to bring it up to the $400.00 - $500.00 range. Either way, the customer is still paying roughly the same price.

The other reason you really don't see to much, if any, work from some of the artisans who sell on the net is due to the lack of quantity and consistency they can offer. They just can't produce enough pipes every year to make it profitable for either party. You may have a maker go through a number of blocks just to turn out that one piece that sells for $500.00 plus. It may take them days to turn out that one piece instead of hours. It may be a one of a kind that they will never be able to reproduce. In that case, yes both the maker and the customer benefit from that particular piece, but if that maker could reproduce the piece at will, turn out a couple of hundred pipes a year instead of just fifty or so and still charged $500.00 plus for the pipes, then does the customer benefit? (Maybe yes maybe no) :scratch:

Distributors are still needed in this country. Good luck picking up a Dunhill, Costello or any other European pipe in this country without them. You may be able to buy them on the net from a European seller, but the taxes will make it painful. (Unless you are buying grey market, in which case that will hurt the maker) When those pipes come into the country, the distributors sell them to the B&M's, (Usually at the RTDA show). Dunhills, Charatans, Petersons, Castellos, etc. all come with a MSRP price list. Depending on grade, size, shape and finish of the pipe, the price is pretty much set for the B&M. If they increase to much over MSRP, the pipe won't sell because the customer can get the same pipe for a cheaper price at another B&M.

I completely agree that the WEB is indeed wonderful and has allowed a lot of makers to get their name out their and market their pipes, tampers etc. that they would not normally be able to do. It has also opened up a whole new world for the buyer, bring a much larger selection right into their living room. Is it cheaper? Yes and No or Kinda sometimes

Randy

 

[Anonymous]

For the most part, the pipes I buy directly from the maker rather than the distributor are about the same price. What it does is make more money for the maker since they are not having to lower the price to sell wholesale.

I've bought enough that I will get discounts on occasions (which are appreciated). I make every attempt to check with a maker first before looking at a shop though.