Brian Goulet and his recent Q&A "under cutting"

[SeminarianMike]

On Brian's recent Q&A he addressed a question on under cutting. This really has me worked up and feeling rather guilty. I would like to here all your opinions. This is such a fine community full of great people who I care about dearly! The short time I've been here I have received so much kindness. I can't even begin to tell you some of the amazing things people here have done for me!
Let me expound on why I feel guilty. Recently I bough a pilot 92 demonstrator. I did not have the money to buy it from most places so I went to Amazon. I found many Japanese sellers posting around 100 bucks, couldn't afford that so I searched deeper into Amazon , which can get tricky. After 10 mins into the pits of Amazon I see 1 fine nib blue demo 92 left in stock directly from Amazon for 78.00 shipped from Amazon prime... I don't know how that is possible buy it is real. This can't be good for pilot. Perfect example of what Brian spoke about today. I was not helping this community by buying that pen at that price.
Further more my post on first impressions of my new m805. I paid 40% less then what that pelikan should cost. I contacted pelikan to confirm Martenodena as a legit authorized retailer, but am lending to the devalue of pelikan brand? Probably... I don't understand how martemodena can sell at those prices and be an authorized dealer but they do. This is a touchy topic and I don't know what response I will get... Have at it!

[Jon Szanto]

I would be happy to make comment, but only after you have supplied a link to this Q&A and I have viewed/read it myself. If I'm going to take everything into account, I want to hear the actual source, not your's - or anyone's - version of it.

[SeminarianMike]

http://youtu.be/LJkyhq3hH_A here you go forward to 26 mins

[bluesea]

This is also happening in road cycling, where UK online shops are able to sell at prices below U.S. wholesale. I'm all for it.

Bought my first fp from Goulet Pens, probably because of their info support for novices. When it comes to paper, I tend to go there first because of their packing. Running through the upgrade-experimentation cycle that I did, would have been too costly at their price points.

One way for retailers to compete is by increasing services offered. For certain purchases I have bought, and will continue to buy from Classic Fountain Pens for the services and reassurance offered by John Mottishaw.

[brunico]

I paid 40% less then what that pelikan should cost. I contacted pelikan to confirm Martenodena as a legit authorized retailer, but am lending to the devalue of pelikan brand?

Why would you think that?

Surely Pelikan is lending to the overinflation of its brand if the way it's setting prices in different markets means that sellers in some countries have to charge 67% more than sellers elsewhere.

And if the value of a brand depends on how expensive their stuff is rather than how good it is, then its value stinks.

I was not helping this community by buying that pen at that price.

No skin off my nose. I understand that you have found the Goulet Pen Company helpful. Personally, I've never got anything of the least value out of any of their blogs or videos, so to me they're no more worthy a part of the community as I experience it than some anonymous Ebay seller flogging Jinhaos for 99p is. Plenty of people don't make any money from pens and yet have contributed helpful photos and reviews, and I've never given them anything other than a simple thanks.

This can't be good for pilot.

Why not? Presumably the sellers pay Pilot for the pens they sell on? If Pilot chooses to force higher prices in the UK than in Japan, it will have to deal with people cutting out Pilot UK and getting pens from somewhere else. I like Pilot, and I've often recommended them, but there was no way I was going to buy a Prera in the UK for £55 - as they once were - when I could get one shipped from Japan for £20. That Preras in the UK are now about £40 probably tells us that Pilot is aware it had set its prices artificially high. The Prera is a fantastic pen, but it's not worth £55. I have no wish to help Pilot UK, either, as they've never been helpful to me when I've asked about the availability of different sizes of Plumix nib. So I don't owe them anything.

I don't think you should feel as though you owe them anything, either. But if you think you should be letting the Goulets profit rather than someone else, you should be buying cheaper pens...

[jar]

It's a complex subject and I'm not sure there is any "Right™" answer.

I grew up in an era before the transportation system we see today. Banana boats still docked down at Pratt Street and the stevedores carried the bananas down the ramp to where dockworkers sorted them. (of course all us kids were there to get the tarantulas and snakes that made the voyage). The foods we got were locally grown and depended on the season. When in-season you gorged because it would be 12 months before that item returned.

But cheap transportation, chain stores and demand led to sourcing foods from all over the world and "It's always in-season somewhere". That in turn led to produce designed to ship well and last above the taste.

The family farm and the neighborhood grocery disappeared.

Many folk never even noticed. Many today never experienced neighborhood stores, never tasted fresh ripe produce, never knew the joy and expectations of the season and so cannot miss what they never knew existed.

Cheap ubiquitous transportation and currency convertibility is a fact.

Folk like the Goulets and the folk at Classic Pens and Richard and so many others have provided us with fantastic resources, helped preserve and distribute institutional knowledge and wisdom. That costs. It costs time, energy, money, resources, care, emotion ...

When I go to buy a new pen, even many not all that new pens, I look first to known individuals where the transaction helps both of us; next to those brick and mortar stores and long term fountain pen folk who over time have given so much back to this whole community. If there is no way I can get what I seek from one of those sources then I look at non-US based brick and mortar stores.

But I don't buy simply because "I can get it cheaper over there". I first ask myself if I can just wait a little longer, save up a little more money and buy from one of those sources mentioned above. In almost every case the answer to that question has been "Sure, I can do that."

[SeminarianMike]

I want to be very clear: I am not against good prices or fierce competition against vendors! I'm a capitalist through and through, but I do agree and feel for Brian. I love his philosophy and business model, and this is why he is doing so well. When we visit Rome I am set to meet with martemodena personally. I hope to find out what is behind that company.
I do think this topic could bring some great discussion

[SeminarianMike]

It's a complex subject and I'm not sure there is any "Right" answer.

I grew up in an era before the transportation system we see today. Banana boats still docked down at Pratt Street and the stevedores carried the bananas down the ramp to where dockworkers sorted them. (of course all us kids were there to get the tarantulas and snakes that made the voyage). The foods we got were locally grown and depended on the season. When in-season you gorged because it would be 12 months before that item returned.

But cheap transportation, chain stores and demand led to sourcing foods from all over the world and "It's always in-season somewhere". That in turn led to produce designed to ship well and last above the taste.

The family farm and the neighborhood grocery disappeared.

Many folk never even noticed. Many today never experienced neighborhood stores, never tasted fresh ripe produce, never knew the joy and expectations of the season and so cannot miss what they never knew existed.

Cheap ubiquitous transportation and currency convertibility is a fact.

Folk like the Goulets and the folk at Classic Pens and Richard and so many others have provided us with fantastic resources, helped preserve and distribute institutional knowledge and wisdom. That costs. It costs time, energy, money, resources, care, emotion ...

When I go to buy a new pen, even many not all that new pens, I look first to known individuals where the transaction helps both of us; next to those brick and mortar stores and long term fountain pen folk who over time have given so much back to this whole community. If there is no way I can get what I seek from one of those sources then I look at non-US based brick and mortar stores.

But I don't buy simply because "I can get it cheaper over there". I first ask myself if I can just wait a little longer, save up a little more money and buy from one of those sources mentioned above. In almost every case the answer to that question has been "Sure, I can do that."

Jar you are very wise! I'm not that old but I do remember my neighborhood grocer before it went the way of a new trendy Gourmet Cheese and cracker supply with daily specials of gluten free pasta, and local farmers had seasonal cider and we could go get our own pumpkins fornhalloween in a field... Those were he days

[Empty_of_Clouds]

I think it can rather depend on the scale of the disparity. For those like me who inhabit the lower socioeconomic strata it is simply an economic solution that allows us at least to experience the pens that the rest of normal pen society enjoys. I refuse to be an apologist for this. For what it is worth, I bought my first and only TWSBI from the Goulet Pen Co., and will likely go for another from them in the future. I could buy direct from TWSBI but there is no appreciable saving there and so I am more than willing to put the business Brian's way, such as it is.

[TAYLORPUPPY]

I'll pay Brian's premium retail prices over all other foreign sellers. I don't care how deeply they slash the price. If I don't like his pen, he will let me return it. I'm not likely to have that luck with Bilbo baggins in east egypt. With that said. I don't think Brian did himself any favors with this video. I don't know if he was feeling down, maybe he was hungry and not thinking well. It was especially troubling to hear him say why he can't sell hi end platinum. I would have thought Brian would look for ways TO sell hi end platinum, as opposed to talking about why he cant.

[Empty_of_Clouds]

I'll pay Brian's premium retail prices over all other foreign sellers. I don't care how deeply they slash the price. If I don't like his pen, he will let me return it. I'm not likely to have that luck with Bilbo baggins in east egypt. With that said. I don't think Brian did himself any favors with this video. I don't know if he was feeling down, maybe he was hungry and not thinking well. It was especially troubling to hear him say why he can't sell hi end platinum. I would have thought Brian would look for ways TO sell hi end platinum, as opposed to talking about why he cant.

There are highly reputable sellers in Japan that will under-cut the American dealers if you are willing to purchase online. There is nothing shifty about these sellers, and I think you should be careful about implying that ALL non-US retailers are disreputable, as you are with your "Bilbo Baggins in East Egypt" remark.

The upside of dealing with local stores is the level of service. The downside is the elevated cost. The reverse is mostly true for the good online sellers, except that in my opinion the disparity in prices is far more significant than the disparity in services.

[KBeezie]

I think I tend to avoid such conundrum most of the time by buying (or trading) used and/or vintage.

But I been that way with other manners of equipment as well. But when it comes to my consumables, I tend to go for the retailers that helped me the most, especially since the pricing difference there is pretty negligible.

The stuff that seems to have a huge pricing difference tend to be a very select few models.

[bluesea]

Most online sellers in the U.S., Goulet Pens included, provide discounts many local brick and mortar sellers are unable to compete with. Where do you draw the line?

[KBeezie]

Most online sellers in the U.S., Goulet Pens included, provide discounts many local brick and mortar sellers are unable to compete with. Where do you draw the line?

Depends on how much of a discount, most brick and mortar stores tend to sell at MSRP, a lot of the online shops sell less than the manufacture suggested retail price to compete.

But... when you consider that the MSRP (as stated by the manufacture themselves) on a Platinum Century 3776 is 10,000 yen (that's about 85 USD in the current exchange), and the Japanese retailers are selling less than the MSRP (like with many other retailers with their own market), compared to $176 within the US, that's going to be a "lolwut?" moment for some, similar scenario with some Pilot models as well.

Better question is, who is to blame for causing an insane bump in the price just by geographic region for a specific brand? It's not like all of them are like that and that's just one of the more extreme examples. (better yet... why are Pelikans priced better brand new in Japan than the rest of the world? almost half that of any place outside of Japan, but it's not a Japanese brand).

[Jon Szanto]

http://youtu.be/LJkyhq3hH_A here you go forward to 26 mins

Thanks, Mike. It's been a really long day, but I've watched most of the part he talks about this. I may have some thoughts in the next day or so, but a fair amount has already been touched on, much of it by my friend Jar. The only thing I'll add at the moment - and I didn't get a real negative impression of Brian as maybe some people did - is that there is at least a small bit of irony here: when I first got into pens about 6 years ago, GPC was really just getting started. As they grew from just a couple of employees to where they are now, there was a fair amount of discussion in the public as to how the online (pen) retailers were cutting into the business of the shrinking brick-and-morter pen/stationery suppliers/stores. By not having a storefront, by not having displays and sales people and rent and all the various expenses of a b&m store, the online sites could offer more product at lower prices.

Which is quite interesting in light of the current discussion.

Well, more later. Time for sleep and then a pen club meeting tomorrow a.m. Things to do, and then the LA Pen Show this week!

[Miss Fountain Pen]

I'm in Europe, so Goulet is not the most natural place for me to order from. I do have a couple of thoughts on this matter, though.

First, it is my understanding that brands dictate pricing to a large extent, and so the same pen may cost far more in one country than in another. There is no particularly good reason for this other than the fact that the brand thinks it can get away with it. The big Japanese pen manufacturers (Pilot, Platinum, Sailor) are the most guilty of this, it seems. They'll literally double the prices on many of their pens (including some of the most popular ones) for the Western market. If we were talking 20% increase or some such, it would be a different matter. But when they double the price, I feel that I am being made a fool of, and no, I'm not going to play along with that. I'll order straight from Japan, thank you very much. Not Goulet's fault, but if enough of us do it, maybe the Japanese brands will get the message.

Second, the most important value-added service for me is the testing and tuning of the pen before shipping. I'm much more likely to pay extra to someone who will check and tune the pen than to someone who's merely a great guy. On that note, may John Mottishaw have a long and prosperous life and business, because I have every intention of buying from him again in the years to come.

[nusiax]

There are many different reasons you would buy from various sources. I purchase most of my pen items from my local reseller here in the Netherlands. Love the service and communication. Also nice to try an item before you buy. But I have bought from other sources. I found a beautiful blue enameled waterman similar to a Hemisphere. But I have not seen that pen any place. I was in Japan and bought way too many pens. I bought a Sailor Pro in Osaka in a color only available at that particular shop and it was way cheaper than purchasing one here in the west and I also got the sales tax deducted. I bought a wonderful Platinum3776 with gold maki and after tax refund was around €25. Could never get that here. It does not hurt the brands. There are various reason for price differences. Most has to do with import duties taxes shipping etc.

And I would not be guilty buying a $100 Pelikan for $75. That is 25 percent off great deal but not over the top. Be thankful and enjoy your pen.

I love Goulet Pens. Watch their videos regular and read the blog. But never purchased. As the shipping costs make it the same price as if I buy local so I do.

[Empty_of_Clouds]

Having watched the video I am a bit conflicted. The simple fact for me is that I acquired virtually all the information I sought about various fountain pens from hobbyist reviews and not from retail sites/blogs and so on. So I think he is overstating the importance of that aspect of his business.

Furthermore, because I do not live in the US it means that the Goulet Pen Co. is just another online seller, and as such not especially competitive. The service side that Brian Goulet talks about has no impact for me because it would cost me too much money for the back and forth shipping. This is obviously going to be different for those of you who live in the US, and have quicker and cheaper access to after sales services. Heck, even a phone call would cost me an arm and a leg.

Perhaps we are an unusual case here in New Zealand. There are no dedicated B&M pen shops, nor any locally hosted online retailers (as far as I know), so everything is sourced online overseas. At that point all the fancy economic analysis from the video references fly out of the window and it comes down to who is offering the best money deal.

Living here makes this situation simple to understand and to engage, without having to worry about any perceived moral issues.

[SaoDavi]

I too just bought the Pilot 92 this week, from Japan via Amazon. I looked at at Goulet as I often do, but I wasn't going to pay 60%-100% more for the same pen.

I like to support small businesses, and I like to patronize businesses that provide me with pre-sale information and good service and after-sale support. However, I won't pay more than about 20% for that "added value".

I think the problem is twofold. 1) Goulet needs to stop charging full MSRP on his products. Nobody does that anymore and it causes them to be uncompetitive in the market. 2). Pen companies shouldn't have MSRPs that are so wildly inflated over the actual market price. TWSBI sells their pens at a fair price and the cost from Goulet, Amazon and TWSBI direct are all roughly the same. Pilot and others should do the same. This is in no way the customer's fault, and shouldn't be presented as such.

[Haga888]

Pricing matters in virtually every product we purchase in our lives. As a retailer you adjust to the market or guess what, someone else is going to take advantage of the situation. Adjusting might mean lowering prices and having to cut back on the "value-add". If people are willing to forgo that service you're offering for lower prices, well how much do you think your value add is worth?

It's all within reason. If the price difference is 10-15% most people will still go to their favourite retailer for lower cost items. I fail to see the logic in paying almost 50% more for virtually any product all other things being equal.

Their are countless examples of businesses and entire business models going extinct because they can't adjust to their new realities. I don't see any differences here. It isn't right or wrong, it's just reality.