Walter frequently earns an income by selling cigarettes at a bus stop on Chicago’s South Side, a business opportunity that has been created by sizable differences between states in the retail price of cigarettes.
Illinois is one of only two states with an average price per pack of more than $10. At an average selling price of $11.50 per pack, individual cigarettes in Illinois cost 57.5 cents. In the city of Chicago, retail prices at convenience stores may be $14 to $15 per pack (70 to 75 cents each), or higher. Cigarette prices in neighboring states, on the other hand, are considerably lower. In Indiana, for example, a pack sells for an average of $5.97 (30cents each), while in Missouri it sells for an average of $5.25 (26 cents each).
Walter typically purchases “bootleg” cigarettes from a West Side retailer. These packs are initially purchased in states such as Indiana and Missouri, resold to retailers in Chicago, and then re-sold again to street vendors such as Walter.“ When you are selling cigarettes you never sell the whole pack because your profit won’t be that much—you try to sell them loose.” By purchasing packs for $8 and then reselling individual cigarettes for 50 cents, Walter is able to earn 10 cents per cigarette sold, or $2 per pack. Occasionally, cigarettes that have been purchased on the Internet become available. Although the quality of “Internet cigarettes” is poor (some cigarettes burn too quickly, while others just stop burning), the price is right. At $6 per pack, selling loose Internet cigarettes generates twice as much income (20 cents each, or $4 per pack), “but they don’t have a lot of them and when they’re gone, they’re gone.”
Demand for loose cigarettes is strong, owing both to their addictive properties and to the high cost of packs sold by conventional retailers. “I’d get up at six in the morning every day and I’d see people going to work. I was like a regular to them,” Walter explains. He would sell to his regulars at the bus stop regardless of whether it was cold, snowing, or raining.Many customers are unable to afford the full retail price of a pack of cigarettes, so they satisfy their craving by purchasing a few “loosies” for a dollar or two, about a quarter less than store-bought cigarettes. Demand is high but so is the com-petition. His regular spot is at the inter-section of two bus routes but he couldn’t even wander “a block down because there is another guy over there. Same if I go in the other direction.” If Walter works all day selling cigarettes, he can earn $20 to $30.