Pelikan is in Trouble

[sirgilbert357]

  On 8/8/2021 at 11:00 PM, N1003U said:

Can you cancel your order?

I do read/speak German, but I believe there is an English-language side to the website (click on the Union Jack at the upper right corner of the site), and the navigation and webshop is pretty straightforward.

 

365.55€ for and M805 Stresemann (without VAT)

403.36€ for an EF,

 

so yea, about US$430 at current exchange rates, plus shipping.

 

The folks I have dealt with directly have been efficient in processing my order, and in one case did a great job of working out a glitch in the payment processing system.

 

If I remember correctly, on my last order I paid maybe 25€ for shipping to the US.

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I probably could, but it's probably being shipped out today or already has been...

 

I might just have to file this one under "Lesson Learned -- ask first, buy only after FPN has collectively advised."

 

I got a little impatient and decided to just buy the pen before I missed out entirely.

[A Smug Dill]

  On 8/9/2021 at 4:17 PM, N1003U said:

your expectations may well, in at least the near term, be dashed... 😛 

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Just to clarify, because I think two slightly different things are being conflated:

1. In reply to @Ron Z, as a customer I indeed want the retailer to own the responsibility of delivering — to my nominated and valid delivery address — what I ordered to me. Amazon gives me that; any time there was an issue with failure to deliver, it always resolved the issue such that I was not out of pocket, at the very least. Cult Pens, Fontoplumo, LCdC, etc. never expressed either a policy or the desire to wash their hands of all responsibility once an package containing a customer order has been handed off to the parties they engaged locally to handle (at least the first leg of) order delivery, even when it is offering brand-wide and/or site-wide discounts. Whether I have to pay expressly or additionally for delivery, perhaps for a specific method or courier of my choice, is a different matter.
   
   Obviously I'd prefer ‘free’ delivery past a given threshold order value; and I almost always reach that threshold with my orders. How the retailer does the sums and is able to maintain sufficient profitability should not be my concern as the paying customer; although, either as a friend of the business, or a happy repeat customer who wants the retailer to continue to operate in the industry so that I can buy from it again, sometimes I'm mindful of such things, and proactively work with retailers to (re)structure my orders into combined shipments where possible to minimise the shipping costs they have to wear, or even decline the offer to have half an order sent ahead of the other half if some not-in-stock item is holding up the order by a number of weeks. However, sometimes I'm OK with paying delivery charges, especially for expedited delivery — but certainly not when the retailer patently wants nothing more to do with the order once it's physically out the door.
    
2. On the issue of expectations, my expectation is that a retailer operating out of the US is no inherent advantage from the global consumer's perspective. There is no more inherent goodwill owed on that account, compared to retailers operating out of China, the EU, Japan, Malaysia, or the UK, and I don't particular care in which country's pockets the consumer spending ultimately ends up. So, furthermore, I expect that US-based retailers either compete with retailers based in Europe and the Far East, and have to make comparable if not better offers, or simply accept they cannot afford to be competitive for custom originating from outside North America, and therefore choose to largely withdraw from that but only stay focus on trawling for custom and consumer spending locally. Not wanting to compete on the terms dictated to them in the global market means exactly that; either do what they don't want to, in order to compete because they need the business, or elect to effectively limit themselves. They're not in any position to steer practices in the global market today, especially with European (e.g. Pelikan) and Japanese brands of products. That is my expectation.

Dan Smith's nib work is a value-add to me, whereas where his business is domiciled doesn't add value or make me think of buying from him more favourably. Since he packaged nib work into his prices for the higher-end pens he sells, I was happy to buy a Pelikan M600 from him and pay ~US$35 additionally for shipping and insurance; to me that's no different from paying for the nib work expressly but get free delivery. The second time around, the shipping charges and insurance went up to ~US$65; I still agreed to order an Aurora from him, out of the same consideration, but that was reaching the limit of what I was prepared to pay for nib work, and (sad to say, but) as I've mentioned earlier, I wasn't as delighted by the outcome of the nib work on the Aurora, even though it effectively cost me more. Now that the delivery charges he quotes has gone up again (by several steps) to a minimum of ~US$95, even the inclusion of nib work as a trade is not sufficient to make the value proposition palatable to me.

[N1003U]

  On 8/9/2021 at 6:30 PM, A Smug Dill said:

Just to clarify, because I think two slightly different things are being conflated:

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I'll address 2. first, as that is relevant to my comment about dashed expectations.

 

My point was that: given the distribution channel that Pelikan has chosen to use for North America (both in terms of form and the specific parties involved), I would not expect a US retailer to be, as a general rule, a competitive seller of Pelikan products against global competition.

 

As for 1.), it was not really what I had in mind with my comment, but since @A Smug Dill took the time and effort to expound on the subject, I figured I could throw in my bit as well.

 

As to delivery responsibility, my impressions there are pretty simple.

Whichever party dictates the transport terms and conditions, essentially takes possession of the goods while in transit. If the supplier wants absolve itself of responsibility for delivery and have me pay, then it should be prepared to hand the goods over to whatever shipping I agent I choose to show up and take possession at its door. If the supplier wants to tell me how and by whom the shipping will happen, then to me the supplier is taking responsibility to put the goods into the hands of my receiving agent at my end in good order.

 

Of course the reality is a bit more complex, especially at the retail level, but the supplier who doesn't understand the difference in responsibility under various scenarios is one I would prefer not to deal with.

[Parker51]

  On 8/9/2021 at 3:23 PM, N1003U said:

Speaking at least for the USA, in the last tariff schedule I looked at, the import duty on fountain pens was something like 1.56%. I can’t imagine Mexico or Canada being much different. I am not sure tariffs are contributing in any great way to North American retail pricing or any other major financial issues for fountain pens being sold in North America. I am quite sure shipping costs are not.

 

Pelikan’s current issues may well be rooted elsewhere. From what I have seen so far, it is not even clear (at least not to me) that the root of Pelikan’s problem lies in the fine writing instruments division, or with production location.

 

What is unfortunate is that the fine writing instruments division does seem to be suffering as a result of Pelikan’s corporate problems, which is disappointing for us FP fans.

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I am curious, do you know what the import duties are for the other products Pelikan sells? As you pointed out, the problem area may be those other items. I do not know what portion of Pelikan’s sales and revenue is derived from fine writing instruments, nor what other products beyond them, ink and school pens they sell. 
 

Perhaps by restructuring and producing those items which Pelikan has difficulty making a profit on are made I n Mexico or some other lower cost production location that has a free trade agreement with North America might make financial success, and then perhaps fine pen production could stay in Germany. 

[Parker51]

  On 8/9/2021 at 6:30 PM, A Smug Dill said:

 

Just to clarify, because I think two slightly different things are being conflated:

1. In reply to @Ron Z, as a customer I indeed want the retailer to own the responsibility of delivering — to my nominated and valid delivery address — what I ordered to me. Amazon gives me that; any time there was an issue with failure to deliver, it always resolved the issue such that I was not out of pocket, at the very least. Cult Pens, Fontoplumo, LCdC, etc. never expressed either a policy or the desire to wash their hands of all responsibility once an package containing a customer order has been handed off to the parties they engaged locally to handle (at least the first leg of) order delivery, even when it is offering brand-wide and/or site-wide discounts. Whether I have to pay expressly or additionally for delivery, perhaps for a specific method or courier of my choice, is a different matter.
   
   Obviously I'd prefer ‘free’ delivery past a given threshold order value; and I almost always reach that threshold with my orders. How the retailer does the sums and is able to maintain sufficient profitability should not be my concern as the paying customer; although, either as a friend of the business, or a happy repeat customer who wants the retailer to continue to operate in the industry so that I can buy from it again, sometimes I'm mindful of such things, and proactively work with retailers to (re)structure my orders into combined shipments where possible to minimise the shipping costs they have to wear, or even decline the offer to have half an order sent ahead of the other half if some not-in-stock item is holding up the order by a number of weeks. However, sometimes I'm OK with paying delivery charges, especially for expedited delivery — but certainly not when the retailer patently wants nothing more to do with the order once it's physically out the door.
    
2. On the issue of expectations, my expectation is that a retailer operating out of the US is no inherent advantage from the global consumer's perspective. There is no more inherent goodwill owed on that account, compared to retailers operating out of China, the EU, Japan, Malaysia, or the UK, and I don't particular care in which country's pockets the consumer spending ultimately ends up. So, furthermore, I expect that US-based retailers either compete with retailers based in Europe and the Far East, and have to make comparable if not better offers, or simply accept they cannot afford to be competitive for custom originating from outside North America, and therefore choose to largely withdraw from that but only stay focus on trawling for custom and consumer spending locally. Not wanting to compete on the terms dictated to them in the global market means exactly that; either do what they don't want to, in order to compete because they need the business, or elect to effectively limit themselves. They're not in any position to steer practices in the global market today, especially with European (e.g. Pelikan) and Japanese brands of products. That is my expectation.

Dan Smith's nib work is a value-add to me, whereas where his business is domiciled doesn't add value or make me think of buying from him more favourably. Since he packaged nib work into his prices for the higher-end pens he sells, I was happy to buy a Pelikan M600 from him and pay ~US$35 additionally for shipping and insurance; to me that's no different from paying for the nib work expressly but get free delivery. The second time around, the shipping charges and insurance went up to ~US$65; I still agreed to order an Aurora from him, out of the same consideration, but that was reaching the limit of what I was prepared to pay for nib work, and (sad to say, but) as I've mentioned earlier, I wasn't as delighted by the outcome of the nib work on the Aurora, even though it effectively cost me more. Now that the delivery charges he quotes has gone up again (by several steps) to a minimum of ~US$95, even the inclusion of nib work as a trade is not sufficient to make the value proposition palatable to me.

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I find your honesty both refreshing and scary, especially since we are talking about Fountain Pens, a hobby in which all funds expended upon are discretionary and thus subject to our personal predilections. 

As we are not allowed to talk politics I will go no further.

[N1003U]

 

  On 8/10/2021 at 2:25 AM, Parker51 said:

I am curious, do you know what the import duties are for the other products Pelikan sells? As you pointed out, the problem area may be those other items. I do not know what portion of Pelikan’s sales and revenue is derived from fine writing instruments, nor what other products beyond them, ink and school pens they sell. 
 

Perhaps by restructuring and producing those items which Pelikan has difficulty making a profit on are made I n Mexico or some other lower cost production location that has a free trade agreement with North America might make financial success, and then perhaps fine pen production could stay in Germany. 

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Pelikan sells thousands of products. The US tariff schedules are here. They are painfully detailed. One needs to read the general notes to decipher the country codes, but it isn’t rocket science. Canada and Mexico have similar schedules in their respective countries.

 

Fountain pens are in Chapter 96, code 9608.3. It looks like the tariffs have increased since I last looked, now 2.7%, the same as ballpoint refills. Ballpoint pens (9608.1) are at present a fairly steep 5.4%, and I didn’t dig too deeply, but it looks like product out of China is currently subject to additional supplemental tariffs (buried in the footnotes in Chapter 99).

 

So yea, in principle, I suppose a European-based manufacturer could spend time buying/leasing and setting up a factory in North America, establishing new supply chains, relocating critical infrastructure and personnel, figuring out the new distribution logistics, finding and training employees, wading though the local legal and tax environment, enduring the pain of the learning curve and re-establishing quality control, and, if they are lucky, they will shave a few percent off their production cost margins. Remember, too, even in factories with only modest automation, the direct labor costs are not a large portion of overall costs.

 

And all this is assuming that somewhere in N. America has lower costs than whereever they are producing now (worldwide), and ignoring the costs of shutting down the existing production and terminating or relocating existing supply sources.

 

and I am sure I am forgetting other issues.

 

Seems like a no brainer to me. 😉

[sirgilbert357]

I'm guessing there is no easy fix for whatever is causing Pelikan's financial troubles. I hope they get it figured out though. I would be sad to see their fine writing products disappear from the marketplace.

 

I need to get an IB nib before those become impossible to find...

[TSherbs]

  On 8/10/2021 at 2:36 AM, Parker51 said:

I find your honesty both refreshing and scary....

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That's Dill for you! I don't always read every word he writes (there's lots of them), but I always check him out cuz he writes with sincerity and precision nonpareil. 

[TSherbs]

  On 8/10/2021 at 12:43 PM, sirgilbert357 said:

I'm guessing there is no easy fix for whatever is causing Pelikan's financial troubles.

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Have these "troubles" been verified? I lost track of the thread. Or has speculation drifted into presumed fact?

[sirgilbert357]

  On 8/10/2021 at 1:21 PM, TSherbs said:

 

Have these "troubles" been verified? I lost track of the thread. Or has speculation drifted into presumed fact?

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I'm going by the links at the beginning of the thread, one of which is from the Pelikan's Perch:

 

"A look at the company’s annual report for the year ending December 31, 2020, shows that revenue and profit have been on a steady decline since 2017. Last year’s revenue was down 8.1% when compared with the year prior (RM1.0 billion in 2020 vs RM1.06 billion in 2019) as sales shrunk when the global economy contracted. Keep in mind, these numbers are reflective of Pelikan International as a whole whose global business encompasses many product lines that go well beyond just the fine writing instruments division."

 

I guess the annual report could be fake, but I kind of doubt it. There is plenty of other information in the same post on the Pelikan's Perch that signals trouble, but the annual report is very black and white (for me, at least -- I'm in accounting, so...). Declining revenue since 2017 is indicative of a very big problem -- one that predates Covid.

[N1003U]

  On 8/10/2021 at 1:21 PM, TSherbs said:

 

Have these "troubles" been verified? I lost track of the thread. Or has speculation drifted into presumed fact?

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What can be verified is that Pelikan's global parent has declining revenue and earnings in the past few years (they are still making money, but declining revenue is typically not a good sign unless there has been some intentional retrenchment, which may, in fact, be the case, though even that is in some ways often an admission that things did not go as planned/ are not going as planned. At the fine writing instruments division level (where the nice pens are made in Hannover/Peine-Vöhrum) there have been documented labor/management issues, apparently related to payment of promised bonuses. Some special-edition product releases have been delayed.

 

These points seem to lead to more speculative comments about operational cash flow problems. Combine with the current global supply chain and operational chaos which, predominantly attributed to pandemic-related issues, and throw in a mix of anecdotes of product stock-outs, and yes the speculation tends to build about whether Pelikan (in the context of this forum, with focus on the fine writing instruments operations) has above-average, or even life-threatening problems.

[TSherbs]

Thanks for both these replies.

[TSherbs]

  On 7/7/2021 at 6:49 PM, IThinkIHaveAProblem said:

 

If they move to China, then the name is better off dead.

Better to have no new Pelikans than bad pens with the Pelikan name on them.

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I don't really see how either of these is true, except for sentimental or nationalistic reasons. Why would it ever be better to have a brand/manufacturer go out of business (except for collectors, who value rarity)? The more pens, the better for the commoners around the world. 

[1nkulus]

  On 8/10/2021 at 3:28 PM, N1003U said:

What can be verified is that Pelikan's global parent has declining revenue and earnings in the past few years (they are still making money, but declining revenue is typically not a good sign unless there has been some intentional retrenchment, which may, in fact, be the case, though even that is in some ways often an admission that things did not go as planned/ are not going as planned. At the fine writing instruments division level (where the nice pens are made in Hannover/Peine-Vöhrum) there have been documented labor/management issues, apparently related to payment of promised bonuses. Some special-edition product releases have been delayed.

 

These points seem to lead to more speculative comments about operational cash flow problems. Combine with the current global supply chain and operational chaos which, predominantly attributed to pandemic-related issues, and throw in a mix of anecdotes of product stock-outs, and yes the speculation tends to build about whether Pelikan (in the context of this forum, with focus on the fine writing instruments operations) has above-average, or even life-threatening problems.

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If a company can't/won't pay the employees, that is alarm bells and the worse signal you can send out to the market.

 

As a layman playing devil's advocate, the parent company sells assets and pays shareholders to make them look good.

Let Pelikan decline and eventually exit/bankruptcy.

The revenues are unlikely to improve considering the present global downturn that is due to continue in the short term.

 

The growth potential is greater in Asia and being a Malaysian company it would be easier/profitable to invest in that region.

 

Shifting production to another country would lose value IMO.

People still value/collect pens with 'W.Germany' marking.

How many people would pay MB prices if they were solely manufactured elsewhere?

 

  On 8/9/2021 at 6:30 PM, A Smug Dill said:

Dan Smith's nib work is a value-add to me, whereas where his business is domiciled doesn't add value or make me think of buying from him more favourably. Since he packaged nib work into his prices for the higher-end pens he sells, I was happy to buy a Pelikan M600 from him and pay ~US$35 additionally for shipping and insurance; to me that's no different from paying for the nib work expressly but get free delivery. The second time around, the shipping charges and insurance went up to ~US$65; I still agreed to order an Aurora from him, out of the same consideration, but that was reaching the limit of what I was prepared to pay for nib work, and (sad to say, but) as I've mentioned earlier, I wasn't as delighted by the outcome of the nib work on the Aurora, even though it effectively cost me more. Now that the delivery charges he quotes has gone up again (by several steps) to a minimum of ~US$95, even the inclusion of nib work as a trade is not sufficient to make the value proposition palatable to me.

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An approach followed by any sensible buyer. 

 

OTOH, the threshold at which a price point stops offering value differs among buyers.

[sirgilbert357]

China is perfectly capable of producing high quality products -- if the parent company is willing to pay for the quality control and the production costs to get their product to that level.

 

So few companies are willing to do that, though...

 

And I think Pelikan would have to SPEND money to move production there -- money they may not have...so the initial outlay could potentially cost more than the immediate savings.

[1nkulus]

  On 8/10/2021 at 4:21 PM, sirgilbert357 said:

China is perfectly capable of producing high quality products -- if the parent company is willing to pay for the quality control and the production costs to get their product to that level.

 

So few companies are willing to do that, though...

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An unfortunate truth. 

Apart from automotive and electronics, I am unaware of any company that shifted base to China to improve/maintain quality.

 

[Vladpu]

The troubles are real, and they are presently losing money.

See Malaysian financial data:

https://www.macroaxis.com/invest/ratio/5231.KL/Probability-Of-Bankruptcy

 

 I have a T-shirt my daughter gave to me ... it says "Elvis is dead, Sinatra is dead, and me I don't feel so good either."   I suppose that tends become true of everything as one gets old.  Even pen companies.

[sirgilbert357]

  On 8/8/2021 at 11:00 PM, N1003U said:

Can you cancel your order?

I do read/speak German, but I believe there is an English-language side to the website (click on the Union Jack at the upper right corner of the site), and the navigation and webshop is pretty straightforward.

 

365.55€ for and M805 Stresemann (without VAT)

403.36€ for an EF,

 

so yea, about US$430 at current exchange rates, plus shipping.

 

The folks I have dealt with directly have been efficient in processing my order, and in one case did a great job of working out a glitch in the payment processing system.

 

If I remember correctly, on my last order I paid maybe 25€ for shipping to the US.

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Well, I actually just got an email from them saying they actually DO NOT have the pen in stock and they estimate it would be the end of September before it arrived on special order. I notified them immediately I wished to cancel the order.

 

Why do retailers show something in stock when it isn't? Very frustrating.

 

I placed an order with the other vendor (zc77.de). We'll see how that goes...

[sirgilbert357]

  On 8/10/2021 at 7:27 PM, sirgilbert357 said:

 

Well, I actually just got an email from them saying they actually DO NOT have the pen in stock and they estimate it would be the end of September before it arrived on special order. I notified them immediately I wished to cancel the order.

 

Why do retailers show something in stock when it isn't? Very frustrating.

 

I placed an order with the other vendor (zc77.de). We'll see how that goes...

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zc77.de is refusing to ship to the USA because of Covid. They canceled my order. LOL.

 

Alrighty then...maybe I'm not supposed to get a Stresemann after all.

[TSherbs]

  On 8/11/2021 at 12:38 PM, sirgilbert357 said:

 

zc77.de is refusing to ship to the USA because of Covid. They canceled my order. LOL.

 

Alrighty then...maybe I'm not supposed to get a Stresemann after all.

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Because of Covid? What can that possibly mean?