“But that is called cannibalism, my dear children, and is in fact frowned upon in most societies.” -Willy Wonka
As related in this excellent article on puffingcigars.com, Gene Arganese of Arganese cigars is running a pyramid scheme which preys directly on his most valuable commodity- his customers. From time to time, we’ve all seen various “Cigar of the Month” type deals of dubious distinction. Usually, these types of things amount to little more than an autoship program for overstock cigars. The customer pays a slightly discounted price for a few lackluster cigars and the process is repeated on a monthly basis until he or she absolutely could not stand to see another Rocky Patel Fusion robusto hit the mailbox. Unsteady moral ground is crossed when a contract is involved and the customer is locked into these purchases for a time that exceeds his or her interest.
What Gene has done here crosses the boundaries of taste, morality, the ethic of the cigar smoking community, and infringes upon what many of us view to be an unspoken trust between cigar smokers and cigar producers. Essentially, Gene’s pyramid scheme runs as such: an entrance fee of $89.99 is charged. For this no doubt hard-earned ninety bucks, the victim purchases the ability to purchase a fiver of six dollar cigars for $29.99 monthly. Each year, the entrance fee is exacted again- albeit at the generously discounted price of $59.99. While this is going on, said victim is expected to recruit other “members” for this “club”. If the quota of new recruits is not met, the unfortunate participant in this scheme is booted from the “club”. This arrangement differs slightly from a classic pyramid scheme which typically lacks an actual product. This difference, however, does little to ease the nausea that should arise in the pit of an intelligent cigar smoker’s (my apologies for the redundancy) stomach, as it is a fairly insignificant product that is in question. The real meat of this scheme exists in the multi-level-marketing approach to membership. Perched precariously atop this pyramid is our pal Gene of the likely soon to be defunct Arganese Cigar Company.
During a time in which cigar smokers are virtually pinned in a corner by unfair taxes, undemocratic freedom-restricting legislation, and increasingly hostile public sentiment toward cigars; Gene has decided to prey on the very people who helped to elevate his name from a place of total obscurity to gracing the pages of important industry periodicals. This is no ordinary widget wielding, catalog carrying, pink Cadillac driving pyramid scheme which provides equal opportunity to be taken advantage of across all demographics of the willing population. This scheme is directed toward a group of consumers who place their trust in the manufacturers of their chosen product. We place this trust in cigar companies and other related concerns to use their resources to defend our ability to exercise the freedom to enjoy a cigar. When those resources are instead used to extract money, like blood from a stone, for no other purpose than to pad the pockets of a failed cigar magnate; there can be no other response than to take great offense.
Because personal freedom is necessarily a hallmark of our community, I cannot call for any response other than for that community to come together to remove this type of behavior from our midst. Parasitism will always have its place in the natural order, loathsome as it is. We must respond to this type of leechery in kind. I am advocating a boycott of Arganese cigars until such time as Gene Arganese publicly acknowledges and apologizes for violating the trust of his community with his pyramid scheme. While I suspect that market forces and other economic factors might act to remove this tick from the collective belly of the cigar smoking community before any such boycott makes an impact; I hope to set a precedent that will prevent this type of predation from recurring in the future.
-Anejomofo
While I agree with your general breakdown of this situation, I kind of get sick and tired of hearing about all the “unwritten rules” in the cigar world. Some guys take this hobby a little too far like it’s a strange brotherhood. I just about got crucified once for daring to sell a box of cigars on Ebay. I’m a huge cigar consumer and lover of the “sport”, but I’m not a collector…so last time I checked, I thought I could do whatever the hell I wanted with something I bought. Same with Gene…it’s his company and maybe Gene didn’t think this through, but the man loves cigars and makes his living and has put his whole fortune into making cigars. If you’ve ever met him, you can see his genuine love and excitement when talking about his products. I honestly think he wanted to come up with an idea to sell more cigars, and there’s nothing wrong with that…but also a way for regular guys out there to make some money as well and use their love of cigars to make a little side money. Trust me, he’s not in the cigar business to make money….he’s lost his ass trying to pursue this love and turn it into a family business.
If you want to talk about “unwritten rules” why don’t you hammer on the guys out there like Gurkha and Rocky, who are the biggest offenders, selling all their premium lines to the online websites….basically selling out…..and destroying the brick and mortar shops at the same time. I live in Minnesota where Gurkhas in the shops range from $12-$40 a stick depending on what blend you buy. Online, Gurkhas are sometime in the $1.50 range! Now why the hell are your customers going to spend that $12 for a stick they can get online for 1-tenth of that cost?
Gene’s idea might be very flawed, especially the part about kicking you out if you don’t recruit enough players….but his little idea isn’t going to bring down the cigar shops we all love to hang out in, like the continuing selling out of the national brands to the online guys at a ridiculous discount that the shops can’t compete with.
And to my breaking of an unwritten rule, maybe cigar companies shouldn’t make a limited release of something if they don’t want to create an after market for it on Ebay and elsewhere and create a lot of buzz and excitement about it.
Oh wait…they do….because that’s marketing.
Great comment, Joe. I hear your frustration with the idea of “unwritten rules”. There are a number of times when I’ve come up against an “unwritten rule” situation in other settings and have been perplexed by others’ expectations.
I think your point about big boys like Rocky and K. Hansotia essentially pillaging the customer base of B&Ms with online sales carries a lot of weight. Hell, I might even pen a vitriolic post decrying that very practice.
Thanks very much for being a part of this discussion. Let’s get some more comments in here, guys!
-Anejomofo
Are you spouting off or reporting fact? Do you have an axe to grind? and with whom?
Well, a little of both. Gene’s pyramid scheme is something that actually exists; so yes, we’re reporting fact.
I am also absolutely spouting off. Our tagline is “News and opinion…”. The judgments I’ve made in the post are quite clearly my opinion.
The axe I have to grind is explained very well in the post. Its title and body contain the name of the person with whom I wish to “grind it” (that’s what she said).
My apologies if any of this wasn’t patently obvious.
-Anejomofo
Not that I want add any link weight to CEO-MLM, but in case anyone wants to investigate it for themselves.
CEO – MLM website.
http://www.ceomlm.com
Link to the CEO – MLM enrollment page that lists “Gene Arganese” as the referrer
https://do5.com/qcigar/enroller.dhtml?sponsor=&jfree=&origs=&startp=index.html&startu=&language=&requri=www.ceomlm.com/join.dhtml
The problem I have with this scheme is in its predatory nature. The company wants me to sell my “friends” into the pyramid all the while giving me “money for nothing”. Don’t get me wrong, free money is great, but MLM schemes exploit people in desperate situations while encouraging laziness.
The whole concept leaves a bad taste in my mouth.
Though I would not participate in any MLM, I was not offended when I heard about the CEO program.
Why not try something different? I would not hold it against a manufacturer to try different ideas to help the hobby of smoking cigars as well as make some money. Cigar companies don’t make cigars to lose money. Joe noted the constant flooding of the online market by Rocky Patel and Gurkha with subpar quality cigars and no one raises an eyebrow.
Why call for a boycott of Arganese cigars when you note earlier in your post the high taxation and limits on where we can smoke cigars? Why damage someone’s bottom line in the industry that is struggling under high taxation? We as a cigar smoking community should be more supportive to the companies that try new ideas.
Though I’m not saying we should support this idea, but its a new idea to an industry that has been around for many years. Will it work, probably not…but let the free market work it out. Gene is a guy that will think outside the box and I give him kudos for trying at least. What do other cigar companies try to do? What are they doing to try and ease the pain of paying higher taxes in states that are crippled with overbearing legislators. This should be our concern, not boycotting a cigar company.
Gene Arganese has gone from bad to totally tasteless in his recent actions. I am not a cigar manufacturer and never will be, but I would never stoop as low as to scheme money out of my supporters. This guy has reached an all time low. There has to be a bigger problem in the “behind the scenes” which we cannot begin to guess what it is. It sounds like he needs money and he needs it fast. Why else would he go so low? I had some of his cigars in my humidor which are now used for kindling in the fireplace. Great job Gene! Keep it up and you will lose even the stupid guy who supports his scheme at the top of the page!!
John
Anejo I do agree with your comments about Rocky and Kazid you need to put him in the same boat as those guys if not worse. Gene is also guilty of selling his cigars to consumers at near factory cost Direct without going to the B&M thus hurting the B&M’s also.
I’ve got problems with Gene Arganese for totally unrelated reasons, but this scheme doesn’t surprise me one bit. Mike Everyday’s comment of “…leaves a bad taste in my mouth.” is exactly right. This scheme to me is the same as if Gene started a program to get you to start telemarketing his cigars by calling houses from phone book listings, and required that you recruit your friends to do the same. I have no doubt this scheme will fail, not because Gene is sleazy, but because the program is just a bad idea.
I think that the simplest way to view this whole mess is that it is not MLM. It is a pyramid scam that sends out blind packages of merchandise. A point that needs to be considered is that this is an entirely independent business entity that sends its profits to an individual, and after the proper hoops have been jumped through, white elephants to the dues paying member.
$100 initiation fee, $60 annual dues, $30 monthly dues, and a mandatory “sacrifice” of 5 people whom you can scam into this thing.
To legitimize his venture, at least in his own judgement, he will send out “samplers” every month upon receipt of the monthly dues.
If the product in question was books, ceramic figurines, canned soup, or even kitty litter, would such a fee structure be tolerated by anyone on this planet?
I would feel a lot better about this if the man hadn’t loudly and publicly denied any connection, when the connections were clear enough that a person could confirm them with nothing but his keyboard and his brains.
I call it a scam, that is my opinion. The facts and actions support that. Over years, I have found reasons to not particularly care for the Arganese company; this is the last of my trust.
Before you guys start throwing cigars into a woodchipper, please email and I’ll send you my address and I’ll give your cigars a home.
Yea I’m going to defend Gene, I may not defend the CEO program but I will defend the guy. I’ve been down to the Dominican and checked out his operation and it was amazing to see what a person can do with the investment and care that goes into creating the cigars you are using as kindling.
His farms are near the same cigar manufacturers that you all gush over every day and there are not many cigar companies that can say they have their own farms!
I don’t know if he needs money and that may be the reason we’re seeing his cigars on CI, but look at the rest of the cigars that are on that site and you’ll see pretty much every cigar company hocking their sticks and have been doing it alot longer then Gene has been in business. Gene is probably seeing the advantage of having CI drive a dumptruck filled money to his place and say give us cigars to sell.
I don’t see people complaining about cigar companies that release ‘limited’ quantities of a cigar and charge a lot more for that cigar just because they say its ‘limited’. This is the oldest trick in the book and I see it every day reading forums where guys jump over each other because a cigar company is releasing a new line in a cool box and charges a premium price. Gene is just getting his money a different way and others are fleecing the cigar smoker behind a ‘limited’ cigar.
Please guys back up your reasons not to ‘particularly care for the Arganese Company’ or why you have ‘problems with Gene Arganese for totally unrelated reason’. What is it before this came to light that you had issue with Gene and his cigars?
Gene is a fast talking habitual lier. All of his lies are comming back to haunt him. I can’t wait for his doors to close for good.
Not all multilevel marketing plans are pyramid schemes. If the products being offered are legitimate and the company is paying commissions on the goods you sell as well as on those sold by people you have recruited, it is a legitimate plan.