Habana Premium Cigar Shoppe’s Scott Bendett uses unique techniques to expand his Albany, NY, business
By Stephen A. Ross
Six customers sit in the smoking lounge on the second story of Albany, N.Y.’s Habana Premium Cigar Shoppe. They puff on cigars and discuss local issues and sports while keeping their eyes on the hockey game that’s being aired on a television mounted on the wall in the corner. Smoking a bent pipe, Scott Bendett, Habana premium Cigar Shoppe’s owner, sits in a chair in the lounge. He watches his customers and glances up at the game. After a few minutes of watching the game, Bendett again looks at the room and watches his customers. he then looks down at the floor and slowly shakes his head and says, “I’m such a lucky guy.”
“I’m a lucky guy” is a phrase that often comes from Bendett’s lips when he discusses Habana Premium Cigar Shoppe, but his natural modesty masks the business acumen the 37-year-old Bendett has used since he first entered the tobacco industry with a mail-order cigar-of-the-month club in 1996. Certainly luck has had something to do with Bendett’s success, but, more often than not, luck is made. Bendett has put himself in the position of reaping fortune’s sweet rewards by working hard, modeling his store after other successful tobacconists, and adopting a slow-growth approach.
From a young age Bendett has been interested in cigars and pipes. His dad smoked, and Bendett occasionally joined his father on trips to the local cigar shop. He remembers getting bubble-gum cigars and using his father’s empty cigar boxes to store baseball cards. “I was very enamored by these products,” he says.
After leaving the State University of New York at Albany (SUNY-Albany), Bendett accepted a job in financial public relations in New York City. “I got all the stockbrokers’ and financial analysts’ fax numbers,” he says. “I wrote reports about companies and faxed them to everybody. I bought ads in different periodicals to create leads and then I gave the leads to the stockbrokers.”
A few years after starting his job, Bendett noticed that cigars were becoming more popular than he had ever seen before. Early on, he rcognized the cigar boom. He liked cigars and tried new ones all the time. A friend of his also smoked cigars, and the two of them started a cigar-of-the-month club, which allowed them to try different cigars and talk about them together. Soon other friends and friends of friends wanted to join the club, and Bendett and his partner sold memberships. “It was mainly a social thing, but we made a little money,” he says.
Bendett’s partnership with his friend lasted for a couple of years, but it ended when the friend left new York City to pursue a master’s degree in 1996. Bendett also decided it was time to leave the city. “I had a neat job, but I didn’t love it. My wife wanted to move back to Albany, so we left.”
Having built the cigar-of-the-month club into a moneymaker in New York City, Bendett wanted to know how far he could take it. He approached an existing Albany tobacconist about selling memberships to the club for commission, but was turned down. “I was very naive and I didn’t know anything about the cigar business back then,” he says.
Undeterred, Bendett opened a kiosk in Albany’s Colonie Center Mall and stocked it with 15 boxes of cigars – the club had become a full-fledged business. With his wife working full-time and without any children, Bendett put every bit of money he made back into the kiosk. Within three months, he could afford to rent a narrow store space in the mall.
Bendett remained in the mall for seven years, slowly building his business. In 2003, Bendett bought a house that had been converted into a retail space. In his store’s basement, Bendett houses his Internet and mail-order business, Pipesandcigars.com, and the stock room. The first floor is the show room. The second floor is the smoking lounge.
Even with 3,000 square feet, the inventory Bendett stocks makes the store seem too small. Racks and glass counters containing tobacco and smoking accoutrements are arranged across the first floor. Pipes and tobaccos are mounted on the walls. A 200-square-foot humidor is located in the far corner.
“I need to have the product because I don’t want to tell someone that I can’t sell him something because I don’t have it,” Bendett says as he walks down the stairs to the basement, where Pipesandcigars.com is operated.
“You could say that I’ve been in mail-order ever since the cigar-of-the-month days,” Bendett says. “It wasn’t until I figured out the Internet a couple of years ago that it really took off.”
According to Bendett, having a successful INternet and mail-order business requires as much effort as having a successful retail operation. “You’ve got to give it 100 percent,” he says. “Too many people give it half an effort and then complain that it didn’t work out. It worked for me only after I worked extra hours at night and hired people who could devote extra hours to it too.”
In many ways, the success of Pipesandcigars.com fueled the success of the Habana Premium Cigar Shoppe. “When the mail-order and Internet business took off, it made our overall business that much better,” Bendett says. He made more money, which allowed him to buy more inventory. Because he bought so much product, he became a volume business and got products that hadn’t been available to him before at a discount, which attracted even more customers.
The activity in the basement is testimony to Bendett’s success. Three employees – Gwen Hood, Sean Petrie and Eric Nicholas – fill orders, and boxes are stacked from floor to ceiling, waiting to be shipped to customers. Bendett employs eight people, none of whom had previous experience in the tobacco industry.
“I’m really lucky,” Bendett says. “I have such great people working for me and we have such a great atmosphere here.”
Almost all of Bendett’s employees were college students looking for part-time work. After graduating from college, many of them stayed at Habana Premium Cigar Shoppe and Pipesandcigars.com. “This crew is great. Any tobacconist would love to have them working for him, and I’m lucky to have them.”
Bendett also credits Steve Gates, who has been with Habana Premium for four years, for much of his success. “Steve is the controller,” Bendett says. “He’s been with me for four years and he keeps me in check. I wouldn’t have been able to do what I’ve done without him.”
Customer service is more important to Bendett than product knowledge. “I can teach my employees about tobacco,” he says as he climbs the stairs. “I’m looking for people with innate customer service skills. Finding new customers is so hard, and by providing good customer service we give ourselves a good chance at having repeat business.”
Bendett walks into the humidor and grabs two Padron Anniversario 1964 cigars. “It’s interesting that cigars are very strong in my retail business, but pipes and tobaccos are the best sellers in my mail-order and Internet business.”
Bendett reports that Padron, Ashton, and his private-label brands are the best-selling cigars at Habana Premium Cigar Shoppe. “We have four private-label brands,” he says. “Habana Premium, Governor’s Choice, Saratoga, and Para Siempre, which means ‘For Always’ in Spanish.”
Having so many private-label brands might seem odd to most people, but Bendett believes it makes perfect sense. “You learn from people who do well. Lew Rothmann does well and he has a lot of different private-label brands. So does Robby Levine from Ashton. I model myself after them. For Lew, the customer is always right. He takes care of any problems his customers have, and I feel the same way. I admire Robby because he took a nice retail store, Holt’s, and added a successful mail-order and Internet division that has an excellent reputation for customer service and quality products.”
Bendett also has University pipes, which amount to his private-label pipe brand. Howard Schulte, a former tobacconist and Dunhill pipe repairman in New Jersey, told Bendett about the pipes, which were carved in 1958 from Algerian briar. Bendett is not sure where the pipes were made, but he suspects they were made in the same factory as Weber pipes. Bendett bought a couple of the pipes from Schulte and asked some of his pipe-smoking customers what they thought of them. After getting good reviews, Bendett bought the whole lot-approximately 2,500 pipes in six basic shapes-and asked Schulte to stamp “University” on them.
“I took some ads out and I’ve sold a bunch of them,” he says. “They’re a really good value because they’re inexpensive and they’re made with such great briar. I sell them as starter pipes because they’re dry smokers and they’re perfect for beginning pipe smokers, but I could sell them as mid-level pipes because of the quality of the Algerian briar and the workmanship.”
In addition to selling University pipes, Bendett also sells a host of other new and estate pipes. “I didn’t know anything about pipes when I first got into the business, so I didn’t sell them,” he says. “A customer complained about my pipe selection and I started to learn about them. Cem Muckenbrun from James Norman Limited taught me a lot. I’m now one of the largest pipe dealers in the country, and he’s really the one that got me into the business. I have great relationships with all the vendors.”
Building good relationships with his vendors has been important to Bendett, but building good relationships with his customers has been the most rewarding aspect of his job. Habana Premium Cigar Shoppe attracts a tremendous cross-section of customers, Doctors and judges sit and talk to carpenters and plumbers in the smoking lounge, and Bendett is proud that he’s been able to become friends with almost everyone who comes into his store.
Bendett admits that he puts in a lot of hours at the store, but he insists he does it because the store is a fun place to hang out. “My customers have become my buddies. I have a great staff working for me and I know that they can do the job, but why would I want to miss out on the fun? I don’t know what I would do if I didn’t have this store.”
To reward his customers, Bendett hosts approximately 12 special events a year. For Bendett, customer appreciation is the sole reason to host such events. “I hate having an event where a customer has to buy something to get something. I want to give stuff away as a reward for coming into the store. I love my customers. Theyr’e so nice and they’ve become such great friends. I really am a lucky guy.”