I think the idea of cigar futures is brilliant. It has worked with wine for centuries and the coffee industry for decades. I was very excited to hear Tatuaje was doing this and I put my pre-order in as fast as possible.
With any other futures the whole point is to "pre-order," otherwise it would not be a "future" it would be stock. The process is simple. Let's use wine as the example because that is the most common commodity as relates to cigars. The wine company will determine the portion of a harvest it wants to sell as a future and then it will typically enlist a brokerage company to sell the futures or will handle it themselves. They will put an initial sampling of what they think the wine will be for ratings. This is all done before bottling, but once the bottling takes place the number of bottles purchased through futures are held aside. There is tremendous upside and some risk in purchasing futures due to the fact you have no idea how the wine will turn out, but you are typically purchasing it at the lowest price it will ever be. So you can be lucky and get a great wine at a low price or you can get a wine that turns out bad but you didn't pay retail for it.
My issue, as it was in the second post of this thread is the fact the ordering process has been screwed up.
I know this scenario is different because Tatuaje is introducing the concept and is back selling the prior "future." As Pete said he can not make more 08 with 09 vintage. What I don't understand is how the pre-orders were more than expected since the amount of cigars available has been know for well over a year. My thought would be that Tatuaje would offer a specific allotment to retailers and they could take that amount or less, but would guarantee the sale of the product. It just seems odd to me that retailers would be given a "wishlist" for a limited commodity.
It is what it is and nothing can be done about it now. Some of you may not see this as an issue and for this year maybe it isn't, but moving forward I am concerned how this will go. Are you going to be able to pre-order a box only to find out months later that the retailer that held your money will not get the box for you? The whole point to purchasing the future is that you guarantee you get that commodity at that price, thus the risk is did you overpay, not am I going to get it)?
Love the info though.
