Pelikan is in Trouble

[Vladpu]

On 8/9/2021 at 10:32 AM, Ron Z said:

 

So you want the vendor to cover all of the shipping costs, insurance charges and risks, and the cost of paying someone to package the item (at a minimum wage of at least $15/hr), while selling the pen at a significantly discounted price?  

 

On 8/9/2021 at 12:23 PM, 1nkulus said:

You snooze, you lose and it applies to both buyers and retailers. 

 

Look hard enough and you will eventually find what you want at a price you are willing to pay.

Patience, sadly, seems to be a dwindling virtue.

Not pushing one over another, but there are EU vendors who DO have free shipping (even 2nd day air!), competitive prices, and no VAT or US taxes.  I mostly buy within US, just "because", but I won't avoid a good deal from Europe.  

[Vladpu]

On 8/9/2021 at 11:17 AM, N1003U said:

 

When one considers the 21st century sales environment, combined with the 19th century distribution methods being employed in some parts of the world (somehow perhaps quaintly appropriate for fountain pens), your expectations may well, in at least the near term, be dashed... 😛 

Don't knock the Pony Express.  Or 19th century next-day transcontinental via-railway delivery.  (They actually ran overnight trains with a post office car and sorters working through the night.  Even letters to Kris Kringle got to NYC from LA next day.) Twenty first century brought us Postmaster De Joyless, with next-year rush delivery 50% of the time (the other 50% getting tossed into a ditch).

[1nkulus]

13 minutes ago, Doctox57 said:

Don't knock the Pony Express.  Or 19th century next-day transcontinental via-railway delivery.  (They actually ran overnight trains with a post office car and sorters working through the night.  Even letters to Kris Kringle got to NYC from LA next day.) Twenty first century brought us Postmaster De Joyless, with next-year rush delivery 50% of the time (the other 50% getting tossed into a ditch).

😆 👍

[sciumbasci]

On 8/12/2021 at 12:39 AM, brokenclay said:

When I highlight a price in a foreign currency on a web page, my browser (Opera) shows the USD equivalent. Other browsers may provide this functionality as well.

 

Oh yes.

Been using Opera ever since it was a paid for software (you had to buy the license in order to use it. I received it for free, can't remember if it came along the new computer or some software in a CD). It is equally good as mobile browser. 

[N1003U]

2 hours ago, Doctox57 said:

Don't knock the Pony Express.  Or 19th century next-day transcontinental via-railway delivery.  (They actually ran overnight trains with a post office car and sorters working through the night.  Even letters to Kris Kringle got to NYC from LA next day.) Twenty first century brought us Postmaster De Joyless, with next-year rush delivery 50% of the time (the other 50% getting tossed into a ditch).

The Pony Express was never really a sustainable business, but yes, the railroads did bring a whole new level of logistics performance.

 

I was actually alluding to Pelikan’s ongoing decision to supply a market of almost 500 millon people via a sole distributor who is screwing their retailers. I find their attitude incredibly lazy.

[Parker51]

4 hours ago, N1003U said:

The Pony Express was never really a sustainable business, but yes, the railroads did bring a whole new level of logistics performance.

 

I was actually alluding to Pelikan’s ongoing decision to supply a market of almost 500 millon people via a sole distributor who is screwing their retailers. I find their attitude incredibly 

 

Pelikan may be using price as a signal to help set its identity as a fine writing instrument maker and maintain its profitability and we cannot assume the difference in price demanded in North America is going to the distributor. It may be going in large part to Pelikan.
 

Different pen companies take different approaches to selling their pens.

 

I know one pen company that handles their own distribution and limits who can be their retail sellers and limits their production to maintain their brand identity, value and margins and produce Limited Editions sold through specific retail channels that have hard low production numbers.  

 

Another one requires the purchasing of certain cases and signage as well as exclusive use of those cases and an area with specific minimum square footage requirements for the exclusive sale of their pens along with no discounting, again to maintain their identity and margins and they produce many very expensive but truly limited in number Limited Editions.
 

Pelikan on the other hand appears to have a history of a willingness to not limit production at all, having a low threshold for retailers to sell their pens and to sell as many as they can, at ever increasing prices with Limited Editions which sometimes turn out to only be limited to how many they can sell even after indicating how many were supposed to be made. They also have their products selling for significantly different prices in different areas. This is based in the theory of separate markets an idea which works well for large heavy items which are difficult to ship, but clearly not for Fountain Pens.
 

 

[N1003U]

1 minute ago, Parker51 said:

 we cannot assume the difference in price demanded in North America is going to the distributor. It may be going in large part to Pelikan.

 

I am not sure who “we” is in this statement, but it clearly does not include me.

[1nkulus]

4 hours ago, N1003U said:

I was actually alluding to Pelikan’s ongoing decision to supply a market of almost 500 millon people via a sole distributor who is screwing their retailers. I find their attitude incredibly lazy.

I don't get it either.

 

Pelikan can't be unaware that their products have a minimal chance of developing a problem if checked prior to dispatch.

 

Plenty of members, as a result, import from Europe as do AUS buyers and rightly so.

[Parker51]

10 hours ago, N1003U said:

 

I am not sure who “we” is in this statement, but it clearly does not include me.

Some people are complaining about the price of Pelikan pens in the North American markets and are blaming it on Chartpack, the distributor and Pelikan for using Chartpack. I am suggesting that the price Chartpack is paying for Pelikan pens to sell in the market they have been authorized to sell in may be higher than what Pelikan charges in other markets. It is also possible it is the same , but Chartpack may have had to agree to pay significant fees to Pelikan to get the contract that distributors in other markets have not agreed to and may not be required to pay. We, meaning you who reads this and I do not know the nature of and terms of the contract between Chartpack and Pelikan and it is wrong to assume Chartpack is simply being greedy and Pelikan is being stupid. 
 

Licensing fees are common in business and vary from place to place. Manufacturers are free to sell the same item to different parties at different prices and do so frequently. 
 

This does distort the market and some would say it is unfair, but unless and until there is a legal framework prohibiting it, this practice will continue. 
 

This is most in your face when buying refreshments in a place which restricts bringing in your own and sells them at highly inflated prices.

 

Why these market manipulations are allowed to continue is the subject of what we are not allowed to talk about, politics. And so I will not.

[1nkulus]

36 minutes ago, Parker51 said:

it is wrong to assume Chartpack is simply being greedy and Pelikan is being stupid.

IMO, it would be fair to assume either or both.

 

The smart buyers are simply importing it from Europe.

 

A non-US sale is entirely Chartpak's loss.

OTOH, the % could be insignificant for Chartpak because irrespective of where you buy it; Pelikan still wins.

 

Companies fail to realize that with cheaper logistics, greater access to info. and increase in foreign travel, buying from abroad is a lot easier/viable.

[Parker51]

3 hours ago, 1nkulus said:

IMO, it would be fair to assume either or both.

 

The smart buyers are simply importing it from Europe.

 

A non-US sale is entirely Chartpak's loss.

OTOH, the % could be insignificant for Chartpak because irrespective of where you buy it; Pelikan still wins.

 

Companies fail to realize that with cheaper logistics, greater access to info. and increase in foreign travel, buying from abroad is a lot easier/viable.

Oh, they realize it. “ Grey market “ of such as watches have been imported into the USA for decades and “duty free” stores have been a mainstay of border crossing points from Canada into the USA for many such items, notably perfumes and the like, were a lack of import duties plus lower gray market origins of the goods make them very attractive.

 

What companies are not going to do is make it easier for any potential buyer to buy any product for a lower price than the maximum they can get and maintain sales volume and profit margins. Market segmentation helps maintain profitability. Take a look at Amazon, it is actually quite surprising that in many product categories they are the most expensive supplier, sometimes at over 10% higher than specialty retailers. It all has to do with market segmentation.

 

[inkstainedruth]

And sometimes, on the other hand, it's cheaper to get stuff via Amazon than directly from the retailer (something I found to be INCREDIBLY stupid).

As for the Chartpak/Pelikan arrangement, I have on occasion bought pens from US retailers, but am more likely to look on eBay.  When it came to the M400 Stresemann, a few years ago, I saved about $60 US buying from Rolf Thiel's eBay store -- I didn't have to pay the Chartpak markup, and Rolf didn't have to charge me VAT since I'm in the US.  Ended up being a win for him as well as for me, because I said, "Hmmm, wonder what else he's got at the moment, and ended up also buying the M405 Blue-Black from him.  And he's a good guy to deal with.

Ruth Morrisson aka inkstainedruth

 

[Parker51]

5 hours ago, inkstainedruth said:

And sometimes, on the other hand, it's cheaper to get stuff via Amazon than directly from the retailer (something I found to be INCREDIBLY stupid).

As for the Chartpak/Pelikan arrangement, I have on occasion bought pens from US retailers, but am more likely to look on eBay.  When it came to the M400 Stresemann, a few years ago, I saved about $60 US buying from Rolf Thiel's eBay store -- I didn't have to pay the Chartpak markup, and Rolf didn't have to charge me VAT since I'm in the US.  Ended up being a win for him as well as for me, because I said, "Hmmm, wonder what else he's got at the moment, and ended up also buying the M405 Blue-Black from him.  And he's a good guy to deal with.

Ruth Morrisson aka inkstainedruth

 

It may not be Chartpack which is marking up Pelikan pens. It may be Pelikan which is selling them to Chartpack at a higher price than they are selling them to the equivalent of Chartpack in other markets. 
 

Only Pelikan knows what price they are selling their pens at in the different markets.
 

Chartpack may be making very little on their agreement with Pelikan, but doing so that they can use this relationship to get their sales staff an entry to retailers so as to sell other items to those retailers and to decrease some of their fixed costs. 

 

Historically different organizations than what one would first think of are who actually profits the most from the sale of those products. It depends on many different complicating factors. 
 

Also, the the lower prices for Pelikan pens in the EU may be due to agreements that Pelikan has made related to its acquisitions. The EU has some strong consumer protection rules related to mergers and acquisitions and increasing prices to EU consumers, even if not formally prohibited by an earlier agreement may not be looked upon favorably.

 

Another possible reason for not raising prices in Germany is they have some very interesting customs and laws regarding business relationships and I can easily imagine them being sued if by raising prices beyond a customary or agreed on amount a retailer ascribes that rise in prices as a cause for financial difficulties for the retailer and demands compensation from Pelikan.

Also, if a German company officer simply does the best they can and demonstrates market forces have caused them to fail they are in a better position than if they take drastic actions such as raising prices in their home market and it fails because they will be held personally responsible by shareholders for any losses due to what are considered incompetent or bad decisions, per German law. No, it is not a crime in Germany for management to run a Company into the ground, stupidity and incompetence are not illegal, but there is personal liability.

[TSherbs]

I read these kinds of threads with interest because I am ignorant of how distributorships, etc, work. 

[1nkulus]

19 hours ago, Parker51 said:

What companies are not going to do is make it easier for any potential buyer to buy any product for a lower price than the maximum they can get and maintain sales volume and profit margins. Market segmentation helps maintain profitability.

 

They don't have to, globalization and cheaper logistics will take care of it.

It takes the same time to order from a US retailer as it does from anywhere in the world.

 

The strategy would work for large/complex items but not for small/simple items.

IMO, the basis of the strategy is simply 'Ignorance is bliss'.

 

How risk averse does an individual have to be, to refrain from importing something as simple as a pen? 

[A Smug Dill]

2 minutes ago, 1nkulus said:

How risk averse does an individual have to be, to refrain from importing something as simple as a pen? 

 

Not specifically with regard to Pelikan, but I've certainly read in hobbyist forums — such as FPN — comments by more than one, two or even dozen of would-be buyers of (say, gold-nibbed, irrespective of whether they're entry-level) Pilot, Platinum, and/or Sailor pens not being comfortable importing from Japanese sellers, either via marketplaces such as eBay or Rakuten (Ichiba, or even the now-defunct, English-language Rakuten Global Market back when it was operating) or independent online shops (e.g. Pensachi, Nagasawa Stationery Center).

 

From what little I know of prevalent European consumer law (i.e. what retailers tell me, through their policy statements or otherwise) and seen of American retail practices, I suppose one thing that can make European and/or US-based buyers wary — where Australian consumers generally wouldn't be, due the ‘limitations’ of our consumer law — is that no-questions-asked returns may not be an entitlement, and, ”I just don't like the pen,” ”it writes but writes too dryly for my tastes,” ”I'm not happy with the pen's performance even though I cannot specifically pinpoint where it doesn't deliver on the published product specifications and guarantees,” aren't automatically accepted as valid reasons for return for exchange or full refund, let alone getting one's international return postage either taken care of upfront or subsequently reimbursed by the overseas retailer. The individual buyer's satisfaction and/or happiness with a purchase s not the criteria for whether the seller has fulfilled its side of the bargain and discharged its commercial obligations.

[Parker51]

57 minutes ago, A Smug Dill said:

 

Not specifically with regard to Pelikan, but I've certainly read in hobbyist forums — such as FPN — comments by more than one, two or even dozen of would-be buyers of (say, gold-nibbed, irrespective of whether they're entry-level) Pilot, Platinum, and/or Sailor pens not being comfortable importing from Japanese sellers, either via marketplaces such as eBay or Rakuten (Ichiba, or even the now-defunct, English-language Rakuten Global Market back when it was operating) or independent online shops (e.g. Pensachi, Nagasawa Stationery Center).

 

From what little I know of prevalent European consumer law (i.e. what retailers tell me, through their policy statements or otherwise) and seen of American retail practices, I suppose one thing that can make European and/or US-based buyers wary — where Australian consumers generally wouldn't be, due the ‘limitations’ of our consumer law — is that no-questions-asked returns may not be an entitlement, and, ”I just don't like the pen,” ”it writes but writes too dryly for my tastes,” ”I'm not happy with the pen's performance even though I cannot specifically pinpoint where it doesn't deliver on the published product specifications and guarantees,” aren't automatically accepted as valid reasons for return for exchange or full refund, let alone getting one's international return postage either taken care of upfront or subsequently reimbursed by the overseas retailer. The individual buyer's satisfaction and/or happiness with a purchase s not the criteria for whether the seller has fulfilled its side of the bargain and discharged its commercial obligations.

I agree with you that returns can be an issue, especially in regard to those with associated fees to be born by the purchaser including shipping, packaging, insurance and in some cases restocking. Sometimes the distance doesn’t have to be far, if there are high postal fees which is the case of sending packages, even pens from the USA to Canada. I purchased a pen ( used) which was sold to me as working which it was not and the cost of returning it roughly matched the cost of getting it into service, so the seller and I split the cost of having the pen restored rather than sending it back as they had no way to restore it. 
 

What that means to me is that I assume when buying a used pen from outside the USA that it will need to be restored as returning it would be expensive.

 

Buying a new pen were return costs would be high might be worth the risk, but as I primarily collect vintage pens, I am not typically in that position.

[N1003U]

13 hours ago, TSherbs said:

I read these kinds of threads with interest because I am ignorant of how distributorships, etc, work. 

 

For those who care, the basics of selling product globally as a manufacturer:

(for those who know how sales of consumer goods normally works, fee free to skip down to the last couple of paragraphs)

 

As a manufacturer selling in a global market, especially high-volume, low-price product (low-price being somewhat arbitrary, but in for this argument I would determine "low" or "high" by comparing the unit price of what is being sold to the overall cost of the sales organization required to sell it), one important marketing decision that needs to be made is: what is the best way to get my product into the hands of the end-users?

 

One option is to sell directly to retail customers. These days, it is not so hard (not trivial, but if one has a product list and some decent pictures, to build a nice webshop with current tools that handles almost the whole process, is not overly complicated (recording orders, managing inventory, confirmations, billing, payment, status tracking, etc.), and retail sales margins directly out of the factory are usually really great, so in principle anyway, direct sales is usually an option to at least consider.

The problem with direct sales that is that:

1.) you still need to have physical fulfillment facility, which is not trivial, especially at scale, and that may not be (in fact, probably won't) something a manufacturer can or wants to get involved with, and

2.) you often have all of the retail customer service issues to deal with, as well as all sorts of different legal environments and business customs to deal with, for millions of customers.

Both of these things are a huge distraction when the main focus is production.

3.) Most retail customers not only want to buy pens, but also ink, and paper (and possibly other accessories) so to be effective as a direct retailer, there is the addition of somehow managing those associated customer needs.

 

Another option is to sell via dealers. This pushes the retail hassles off onto the dealers, who also generally know the retail market and customer quite well, while the manufacturer can focus on making pens. It is, in a sense, outsourcing a chunk of the distribution chain. You give up a piece of the supply chain in order to make your life simpler. Instead of millions of customers to deal with, you now need to deal with only hundreds or maybe globally a few thousand, and the the sales per customer is much greater (and as the manufacturer, and you can, if you want, control the number of dealers either geographically or by forcing minimum purchase volumes, etc.), so you can afford to sell less expensively, ceding part of the sales margin to the dealer, who can typically spend more time than the manufacturer on the retail purchase experience to keep the end user happy.

 

Another option is to sell via distributors. Especially when selling internationally, things get even more complicated as a seller, because now one needs to deal with import/export issues, long-distance logistics, varying national laws, varying business customs, etc. At that point, it can save a lot of hassle to simply offer exclusive (usually geographic) sales rights to a distributor in a given market. This can make sense for the manufacturer in that they have now virtually completely outsourced the sales for that market, and they only have a very few "customers" to deal with in terms of delivery, billing, etc., and usually (the exact terms of the distribution agreement can vary), but all of the hassles of importing, distributing, and selling normally land on the distributor. The distributor(s) like(s) the arrangement because s/he/they do(es) not have to compete with others to sell the product in the given market.

 

Typically, as long as the manufacturer is happy with the volume of product the distributor is moving, they don't care (too much) how the distributor operates within her/his/their territory. Distribution agreements come in lots of flavors and styles, with responsibilities (including customer service, warranty returns, etc.) and standards of behavior agreed in some fashion between the manufacturer and distributor. How the work is split will, of course, have an impact on the price at which the inventory is purchased by the distributor. For example, in one extreme cases, the distibutor buys the goods at the factory dock and takes over complete ownership/responsibility at that point; in the other extreme case, the manufacturer ships inventory to the distributor on consignment, and the distributor only pays for the stock (and/or collects a commission) when it is sold, and may never even take title to the stock. Most distribution agreements I have been involved with and/or know about land somewhere in-between those extremes, and return rights, financing, price maintenance agreements, and many other items are spelled out explicitly as to who is responsible for what.

******************************************************

 

From the little I know about the Pelikan/Chartpak agreement (which is more than nothing, but not a whole lot), it is closer to the former extreme than the latter (i.e. Chartpak are more a re-seller than a commissioned agent), which makes life easy for Pelikan, as long as Chartpak keeps moving enough product to keep Pelikan happy, and Pelikan doesn't care (all that much) about the retail pricing in Chartpak's territory. Pelikan cares only about overall sales volume. How this relationship between manufacturer and distributor might impact the retail customer, I leave as an exercise to for the reader. Why and if grey market trade between the EU and N. America in particular is a concern to Pelikan, I also leave as a point of discussion.

 

It has been touted here that Chartpak recently changed their policy towards the service of gray-market pens and will now honor the warranty on all genuine Pelikans (i.e., as long as the warranty claims are on pens purchased from an authorized Pelikan dealer somewhere). It has also been observed that Chartpak is also since recently no longer handling warranty repairs themselves and instead outsourcing warranty repairs. I leave it as an additional exercise for the reader as to why those two changes might very well be related (hint: why don't automobile dealers complain too much about doing customer warranty work?).

 

[A Smug Dill]

6 minutes ago, N1003U said:

… one important marketing decision that needs to be made is: what is the best way to get my product into the hands of the end-users?

 

One option is to sell directly to retail customers.  …‹snip›… so in principle anyway, direct sales is usually an option to at least consider.

The problem with direct sales that is that:

 

Also, don't forget there needs to be Marketing with a capital M — making prospective purchasers aware of and interested in your product. For example, Van Dieman's Ink has long been engaged in direct retail sales via its web site, including to customers outside of Australia, but few hobbyists overseas have heard about the brand. If the company is not equipped or prepared to put the Marketing effort to raise consumer awareness and push product sales in Asia, Europe and the Americas, then it isn't going to get anywhere, unless it engages regional distributors as agents to do the Marketing locally (and, in return, take their cut of the sales revenue). Word-of-mouth and discussions on online hobbyist forums can help a little; but then, even though VDI has a few good products in its catalogue to offer, because I wasn't impressed by the company's customer service having dealt with it thrice, I choose not to review its products and give them exposure, as I have no obligation to either them or other fountain pen users to do so. By engaging regional distributors who stand to profit from sales, the manufacturers can at least be assured that some decent Marketing effort will be put in and not out of sheer goodwill or community-mindedness.

[sirgilbert357]

2 minutes ago, A Smug Dill said:

 

Also, don't forget there needs to be Marketing with a capital M — making prospective purchasers aware of and interested in your product. For example, Van Dieman's Ink has long been engaged in direct retail sales via its web site, including to customers outside of Australia, but few hobbyists overseas have heard about the brand. If the company is not equipped or prepared to put the Marketing effort to raise consumer awareness and push product sales in Asia, Europe and the Americas, then it isn't going to get anywhere, unless it engages regional distributors as agents to do the Marketing locally (and, in return, take their cut of the sales revenue). Word-of-mouth and discussions on online hobbyist forums can help a little; but then, even though VDI has a few good products in its catalogue to offer, because I wasn't impressed by the company's customer service having dealt with it thrice, I choose not to review its products and give them exposure, as I have no obligation to either them or other fountain pen users to do so. By engaging regional distributors who stand to profit from sales, the manufacturers can at least be assured that some decent Marketing effort will be put in and not out of sheer goodwill or community-mindedness.

 

You're right -- I've never heard of Van Dieman's Ink...LOL.