Non-Smoker Cigarettes

John,

I'm negotiating with a Chinese manufacturer to distribute his product
here in the U.S. It's a smoking deterrent "cigarette", an aid to quit
smoking. You "puff" on this non-smoker cigarette for 10 or 15 minutes
(it doesn't require lighting) in lieu of firing up a regular
cigarette—over a months use, your craving for nicotine diminishes
somewhat.
This eight pack of non-smokers is essentially ginseng—wrapped as a
cigarette—and qualifies as an herbal supplement or homeopathic remedy.
It is not a pharmaceutical grade substance, and simply carries the
FDA disclaimer, like all herbal remedies and supplements. I planned
to place it initially in health stores, whole food stores etc.

I asked the company to add caffeine, as that would be a selling point.
They agreed to add caffeine to the ciggy. I redesigned the package
for sale over hear —they (the Chinese) liked the design and agreed to
package the product in my Americanized wrap.

But they want $5 a pack for up to 10,000 packs. Of course, the
manufacturer isn't divulging his costs but really, what can a pack of
eight (8) rolled ginseng smokes cost when you consider that a pack of
twenty (20) tobacco cigarettes here would sell for $2.50 and still see
a profit (barring excise taxes.) I don't feel this product can
sustain a markup from me, then one from the retailer—and sell at $15.


John, I quote you: "There is always someone willing to pay outrageous
prices for something-anything." But even considering that these
"non-smokers" have been sleekly re-packaged to strengthen perceived
value, this product is pretty much defined by its presented form—as a
pack of cigarettes (albeit "quit smoking" ones.) Is not the price
already established by the price of cigarettes? A pack of cigarettes
is around $5.

The manufacturer is saying "No, price them the same as smoking
deterrents; price them the same as the withdrawal products on the
market." I quote the manufacturer:

"Wren, I understand what you mean, the price of the common
cigarette(20) is much more lower than our No-smoking Cigarette(8)in
our country, too. But the effect is completely different, the common
cigarette(20) is bad for their health while they will benefit from the
No-smoking Cigarette. No-smoking Cigarette is a health care product
although its package and some presentation like any other kind of
cigarette.
Now you are worried because you haven't operate the marketing and know
the product completely. Our products are not only well sold
throughout the big cities in China but also received by vast customers
all over the world; well sold in the international market."

If I pay this manufacturer $5, add my cost, then sell them to the
retailer for $10 (hopefully); the retailer would have to sell them for
$15—a non medicinal cigarette, not endorsed by a doctor's
prescription, not pills or capsules—like most smoking deterrents.
I don't feel that people will pay $15 for a pack of eight (8) (though
one can be "puffed" on for up to 45 minutes.)

Before quitting negotiations, I wanted your input.

Wren

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