About the Company

Scotty's Cigars started as an extension of Scott's physical retail shops specializing in cigars, pipe tobacco, and accessories. Originally launched in 1999, the business evolved over two decades, expanding from pipes to premium cigars and dominating the pipe tobacco market.

The online venture initially thrived through SEO dominance and innovative product offerings, such as custom pipe blends. In 2013, Scott sold the tobacco portion of the business while retaining the ability to sell non-tobacco products. Recently, following the expiration of a non-compete clause and COVID-19 disruptions, he reintroduced premium cigars and rebranded as Scotty's Cigars.

Scott employs six people and targets both hobbyists and occasional cigar smokers. His wide product selection and personalized customer service help ensure repeat business despite a competitive, niche market.

Idea Behind Company

Scott’s entrepreneurial journey began at a small mall kiosk, where he cleverly displayed empty cigar boxes to appear well-stocked. Recognizing the limitations of retail, he sought to break free from geography and embraced e-commerce in 1999. Seeing the success of companies like Amazon, Scott seized the opportunity to sell pipe tobacco and accessories online.

The early days of e-commerce offered little competition, allowing him to thrive with minimal SEO knowledge. His pipe tobacco business stood out due to unique blends crafted by a "Master Blender" and his team’s niche expertise. Scott leveraged connections to hire a marketing expert, propelling his online premium cigar sales by over 500% in a single year.

Despite setbacks like the PACT Act, which restricted online RYO tobacco sales, Scott adapted by pivoting toward premium cigars. His ability to find opportunity during industry challenges has been a hallmark of his success.

Creating the Company

As a retailer, Scott considers his website and service as his “product.” Building his e-commerce business required constant trial and error, adapting to customer demands and advancing technology. Early websites were rudimentary, but improvements were driven by customer feedback, innovative staff ideas, and Scott’s intuition for what would succeed.

One of the company’s key strengths lies in anticipating regulatory challenges. Scott complies with all laws, such as age verification, while maintaining ethical practices. Premium cigars and pipe tobacco have naturally limited appeal to underage users, reducing regulatory risks.

The stability of Scott's physical retail stores also played a crucial role. Profits from his lounges funded online operations, providing a safety net as he expanded into e-commerce. Scott credits his success to a willingness to pivot quickly, test new strategies, and adapt when necessary.

Launching the Business

Scott has launched his online business three times, with each iteration presenting unique challenges. The first launch focused on making products visible and priced correctly, allowing organic SEO growth to drive sales. As demand increased, Scott reinvested profits into staff and infrastructure to scale operations.

By bootstrapping his retail business and reinvesting profits, Scott avoided financial strain while expanding online. His second launch, after selling the tobacco segment, focused on RYO supplies to comply with the non-compete agreement. Most recently, in response to COVID-19, Scott re-entered the premium cigar market with modernized tools and strategies.

Attracting customers in a highly regulated industry requires creativity. Scott focuses on SEO, word-of-mouth referrals, and organic social media engagement to overcome restrictions on paid advertising. His customer-centric approach—offering selection, value, and service—has been critical to retaining loyal buyers.

Earnings

Currently, Scotty’s Cigars earns $6.5K per month through online sales. The business is experiencing steady growth but has yet to return to its peak performance before Scott’s 2013 sale. Despite uncertainties like potential regulations, Scott remains optimistic and confident in his team’s ability to adapt and succeed.

His focus on long-term growth ensures the business operates effectively regardless of short-term setbacks. Scott's financial success stems from reinvesting profits into both physical and online operations, which provided stability during uncertain times.

Future earnings rely on maintaining exceptional customer service, expanding the product line, and leveraging e-commerce innovations. With a talented team and Scott's proven resilience, Scotty's Cigars is well-positioned for continued growth in the niche cigar market.