Attention RYO Filling Station Owners
I am new to the forums but would love a place we could share success stories and what works and what doesn't (as far as marketing) with each other as well as discuss the future of the industry! Is anyone else interested in this? We recently purchased our first machine and should be opening in the next few weeks! If you're ever in the Portales New Mexico area, stop by Dry Leaf Tobacco and say hello!
Everyone who has replied up to this point, are all of you using the RYOfillingstation machine, and if you're a business owner, is this the machine only that you have purchased in terms of the larger ATM sized ones?
I am doing my due dilligence before opening a shop of my own, so I have 2 concerns at the moment:
Are all of you RYOfillingstation owners being charged royalties? I am ok with to have to, but wanted to know if it's across the board or just me.
2nd, my biggest concerns is the laws that may or maynot be passed down that will start taxing us. I think there should be a separate forum for this so that people can keep up to date and educated.
As far as the idea of having another thread for success stories, or a separate forum, heck ya! I'm all for it and will be on there sharing my success stories.
Bottom line it sounds like if I opened a shop right now, I should be safe from the taxes for about 2 years? And even then, chances are I may get grandfathered in?
I visited the TTB website, and saw this
As a result of this preliminary injunction, TTB is not taking enforcement action at this time under the Internal Revenue Code of 1986 (IRC), relative to the TTB Ruling and all requirements set forth therein. TTB has alerted all Bureau employees of the preliminary injunction that, at this time, TTB is enjoined from enforcing the TTB Ruling or authorizing others to enforce the TTB Ruling. Please note that the preliminary injunction does not rescind the TTB Ruling, but enjoins TTB from enforcing it. Accordingly, the preliminary injunction does not waive any valid tax liability or other IRC obligations that may arise during the pendency of this litigation and which would be resolved at such time as TTB is no longer subject to a court-ordered restraint or completion of the litigation.
The biggest concern for me to open a new RYO shop is that if TTB wins the case, you are not only required to have manufacture permit going forward but also need to pay tax that arises during the pendency of this litigation. In that case, all your past profits would be gone.
Last edited by Chief Smoker; 07-17-2012 at 02:02 PM.
I use my powermatic 2 and can make a whole carton of perfect rolled cigs in 40 minutes. My hand crank takes me about an hour a carton but I have an A/C separation in my right shoulder so I can only do about a carton a week with my hand crank.
RYO Start Up Questions
Looking for information on starting up a RYO Fillingstation store, can someone who has opened a store let what the costs they have encountered?
I was talking to a distributor about what percentage they wanted and I was shocked.....
I know the machines are $32,000 but what other fee's do the distributors charge? What percentage does RYO get?
ssgbull - looking for more information on the filling stations from someone in the game.
I spoke to a group that controls an entire state and they wanted a HUGE percentage of the net profit...do you pay any?
I do Business Consulting for a living. A serious and wealthy Client asked me to look into this for him. I have Private Investigation assets that I use in large Merger/Acquisitions. What I determined is that the current models of the folks engaged in manufacture of RYO machines are simply in this for a quick buck. That is the "Simple"....now for some drill down on their Game.
First understand that my focus was for the Florida Market, but almost identical information can be used for ANY State.
You have probably identified the current "Players" in the equipment to use to be RYO Filling Station, Quick Draw, and if you dug a little further you found Freedom Filler, and the little $400 prox box on the West Coast.
First understand that RYO Filling Station and Quick Draw have same ownership and same legal council. They are for practical purposes the same folks. The Flagship product is indeed the $32K machine, that requires payment of Royalties of $3.50 Prox on every carton. Their latest venture is the Quick Draw at $7k (Or whatever the market will bear) to produce one cig at a time, Commercial Grade with similar $3 per Carton Royalty
The third entry into the frey is Freedom Filler which makes cartons at a time and is $12k with minimum 2 per location and $10K for the market (A Zip code prox), and same $3 per carton Royalty. Freedom Filler has had numerous false starts and are "Once Again" stating they can 'Now" deliver.
Before you enter this, understand to be successful you will have to mislead the retail customer, and/or Sell Each Customer on the Truth which is:
By rolling their own with PIPE TOBACCO rather than cigar or cigarette tobacco they can have "Cigarettes" for about half of the price of premium brand cigarettes. The Core to the Game is that rolling own avoids State and Federal Tax Manufacturing Taxes, AND using Pipe Tobacco rather than Cigarette Tobacco is far cheaper tobacco.
There "May" be room for a quick buck in this opportunity, but it will Close and is Closing VERY FAST. All three companies suggest you will be able to get in the $25 to $30 Retail Price per Carton, using this retail price for comparison to Premium Brand (eg Marlboro, Newport) at $60 per carton prox.
95% of the Retail Market are PRICE SHOPPERS.....the business is based upon lowering PRICE.....the other crap is just so much gibberish regarding better tobacco.....
While the Regs will ultimately close the tax loopholes....and that may take a year or two more...the real problem is the Business Plans of the Equipment Manufactureres themselves.....Not to mention questionable ethics regarding the hiding of co ownership of RYO and Quick Draw....it is even more shady.
I live in Florida. The major PRICE player for Cigs down here is Dosal Manufacturing out of Miami. They sell Cheap actual Cigarettes called 305's that are about $45 per Carton...already legal, already packed in 20 Unit Packs and/or Cartons. The RYO's made a dent in their business, so they reacted and WILL END THE GAME OF RYO MANUFACTURERS in Florida.
They are now selling a pack of 20 cigarette sized "cigars" for .99 per pack and $8.99 oer carton. What they are is nothing but same Pipe tobacco used in RYO machines (three flavors Lite, Full, and Menthol), in 100's. Soon to be just plain Kings. They are tearing up market with a carton of cigs for under $10 per Carton. This spells the doom of RYO in Florida.
The other problem that WILL be addressed soon has to do with RYO advertsing a Carton of "Cigarettes" for the price. They are Pipe Tobacco not Cigarette Tobacco...thus a question of "False and Misleading Marketing and Advertising" is just a matter of time. But the real problem is that the idiot who spend the bucks expecting a $25+ Retail price for the RYO is in for a rude awakening. Only a MORON price shopper will roll his own, when he can get same exact product for $10 per carton.....
Game Set Match....Hope this assists you.
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