How do American retailers stay in business?!

[NobleSixSeven]

So I started my fountain pen hobby as many people here through Goulet Pens, but as I delved deeper into the field, it seems that there is a HUGE markup in both pen and ink sales buying from a North American Retailer compared to a european one:
FOR EXAMPLE:
A Pelikan M1000 is 700-800 USD PLUS TAX ~ totals 800-900 USD
A Pelikan M1000 at Appelboom is 530 USD NO TAX. At CultPens it is 404 USD NO TAX.

Thats almost double the price!!

Same thing with inks:
Diamine Ancient Copper 50mL is $15 PLUS TAX at Goulet, JetPens, Goldspot, etc... but it is 7 bucks at La Couronne du Comte and CultPens..


If you take the price of European retailers as the norm, then US retailers pricing is absolutely exorbitant.
How is the pricing justified?

[dneal]

They stay in business because people don’t pay attention to pricing. They also aren’t making a living selling a bunch of M1000s (and that goes for the European dealers too).

Add the 21% VAT to Appelboom’s pricing, and you’ll see what Europeans pay for that pen. You aren’t paying VAT, and you’re usually getting through customs without paying import or sales tax. Most States require you to report and pay tax on online purchases, and most people don’t do it. So technically, your pricing isn’t accurate.

How is it justified? What do you mean by “justified”? People can ask what they want to ask, and people can pay what they want to pay. Most pricing is based off of MSRP. A lot of brands protect their pricing, and drop dealers that advertise or sell at too big of a discount.

An M1000 is a luxury item. People who can afford them usually have enough money that the pricing doesn’t matter that much. It costs what it costs. If that markup bothers you, stay away from jewelry. Although the market is much more competitive now, when I sold jewelry it was marked up 300% or more over cost. Ex: Lab created emerald or ruby ring set in 10k with two .005ct diamonds. Price on tag: $199. Sale price: $99. Cost: $15

Lastly is gross profit vs net profit. A lot of people fixate on gross profit, and think it’s exorbitant. Business have overhead. Rent, utilities, labor, taxes, etc... Net profit has to be, well, profitable; or it’s not worth the bother.

[NobleSixSeven]

They stay in business because people don’t pay attention to pricing. They also aren’t making a living selling a bunch of M1000s (and that goes for the European dealers too).

Add the 21% VAT to Appelboom’s pricing, and you’ll see what Europeans pay for that pen. You aren’t paying VAT, and you’re usually getting through customs without paying import or sales tax. Most States require you to report and pay tax on online purchases, and most people don’t do it. So technically, your pricing isn’t accurate.

Why would I add 21% VAT? Im not paying it in North America. Im reporting net cost to me. Goods less than $800 are exempt from import duties. So my pricing is accurate. At best, sales tax is about 10%, so add $40 to CultPens $400 price and you arrive at $440 which is half that of American retailers.


How is it justified? What do you mean by “justified”? People can ask what they want to ask, and people can pay what they want to pay. Most pricing is based off of MSRP. A lot of brands protect their pricing, and drop dealers that advertise or sell at too big of a discount.

Everyone knows MSRP is a BS number that people attach to play the "sale price" game. I agree with you that some brands are protective, but there's easily ways around that, which are out of the scope of this discussion at this time.

An M1000 is a luxury item. People who can afford them usually have enough money that the pricing doesn’t matter that much. It costs what it costs. If that markup bothers you, stay away from jewelry. Although the market is much more competitive now, when I sold jewelry it was marked up 300% or more over cost. Ex: Lab created emerald or ruby ring set in 10k with two .005ct diamonds. Price on tag: $199. Sale price: $99. Cost: $15

This is a silly argument. I am sure people care if they pay double the cost of a luxury good than someone else. I actually wear luxury watches too (Omegas, Tudors, Rolex, IWC thus far) and I dont pay the stupid absurd prices being charged for a Rolex in the secondary market, but do pay the discounted rates at grey market dealers. The same principle applies. Why would someone pay $8000 for an Omega Seamaster Deep Ocean when they can get it at Jomashop for $5000? Also we are not comparing manufacturr price like the example you gave since the consumer doesn't have direct access to a manufacturer, but rather to a retailer.

Lastly is gross profit vs net profit. A lot of people fixate on gross profit, and think it’s exorbitant. Business have overhead. Rent, utilities, labor, taxes, etc... Net profit has to be, well, profitable; or it’s not worth the bother.
I agree that there are a lot of expenses to be paid, but this is where the european retailers also excel. Their shops are small and their inventories are warehoused so they dont have a lot of overhead in terms of rent, taxes, payroll, etc. Take a look again at Appelboom. His shop is TINY but he moves a lot of inventory and runs an operation with less than 5 people. I think its just him and one other person.

See bolded

[dneal]

They stay in business because people don’t pay attention to pricing. They also aren’t making a living selling a bunch of M1000s (and that goes for the European dealers too).

Add the 21% VAT to Appelboom’s pricing, and you’ll see what Europeans pay for that pen. You aren’t paying VAT, and you’re usually getting through customs without paying import or sales tax. Most States require you to report and pay tax on online purchases, and most people don’t do it. So technically, your pricing isn’t accurate.

Why would I add 21% VAT? Im not paying it in North America. Im reporting net cost to me. Goods less than $800 are exempt from import duties. So my pricing is accurate. At best, sales tax is about 10%, so add $40 to CultPens $400 price and you arrive at $440 which is half that of American retailers.


How is it justified? What do you mean by “justified”? People can ask what they want to ask, and people can pay what they want to pay. Most pricing is based off of MSRP. A lot of brands protect their pricing, and drop dealers that advertise or sell at too big of a discount.

Everyone knows MSRP is a BS number that people attach to play the "sale price" game. I agree with you that some brands are protective, but there's easily ways around that, which are out of the scope of this discussion at this time.

An M1000 is a luxury item. People who can afford them usually have enough money that the pricing doesn’t matter that much. It costs what it costs. If that markup bothers you, stay away from jewelry. Although the market is much more competitive now, when I sold jewelry it was marked up 300% or more over cost. Ex: Lab created emerald or ruby ring set in 10k with two .005ct diamonds. Price on tag: $199. Sale price: $99. Cost: $15

This is a silly argument. I am sure people care if they pay double the cost of a luxury good than someone else. I actually wear luxury watches too (Omegas, Tudors, Rolex, IWC thus far) and I dont pay the stupid absurd prices being charged for a Rolex in the secondary market, but do pay the discounted rates at grey market dealers. The same principle applies. Why would someone pay $8000 for an Omega Seamaster Deep Ocean when they can get it at Jomashop for $5000? Also we are not comparing manufacturr price like the example you gave since the consumer doesn't have direct access to a manufacturer, but rather to a retailer.

Lastly is gross profit vs net profit. A lot of people fixate on gross profit, and think it’s exorbitant. Business have overhead. Rent, utilities, labor, taxes, etc... Net profit has to be, well, profitable; or it’s not worth the bother.
I agree that there are a lot of expenses to be paid, but this is where the european retailers also excel. Their shops are small and their inventories are warehoused so they dont have a lot of overhead in terms of rent, taxes, payroll, etc. Take a look again at Appelboom. His shop is TINY but he moves a lot of inventory and runs an operation with less than 5 people. I think its just him and one other person.

See bolded

If you already know all the answers, why are you asking the question?

[Dave]

There is a kind of point to the OPs question. In a free market economy there is usually a move toward equilibrium between supply and demand, and a settling of price at that point. So, if you look at US retailers of pens you should most likely find similar prices among retailers. Under the expected tendency of the market place you would similarly expect prices to normalise across the global market, and yet this doesn't always happen. Not sure why, it may be something to do with not factoring in the relevant taxes/import duties that most small buyers seem to overlook when making international purchases. I suspect, though am by no means certain, that it is connected in some way to price discrimination.

Sorry if this sounds a bit simplistic. Market place stuff is not really in my sphere of clear understanding, so I may be misrepresenting some of the terms here.

[Doctox]

But when the revolution comes, nobody will have 5 M 1000s until everyone has 1.

[Eciton]

Also the example of the Pelikan is the most extreme out there: Pelikan historically has HUGE price differentials between US and Europe. I remember reading articles about it. And Diamine also is a European manufacturer so you would expect it to be cheaper without transatlantic shipping to US retailers.

[NobleSixSeven]

Also the example of the Pelikan is the most extreme out there: Pelikan historically has HUGE price differentials between US and Europe. I remember reading articles about it. And Diamine also is a European manufacturer so you would expect it to be cheaper without transatlantic shipping to US retailers.

You may be right on that. But then again, most of the upper level pens are either European (Aurora, OMAS, GvFC, Pelikan, Montegrappa, Molteni, Bexley, Conway Stewart, Onoto, Visconti, etc..) or Asian (Pilot/Namiki, Platinum, Sailor, TWSBI).
And there is decent price differential across all the pens. For example, I also purchased an Aurora Black Mamba for under 500 when it wouldve been about 850 in the US. Purchased an Il Magnifico for 1100 when it wouldve been 2300 in the US. These are anecdotal but true examples. Switching to Japanese pens, I have an emperor that I recently purchased being sold for 2000 in the US and is being sold for 1200-1300 in Tokyo or even through Japanese eBay sites.

[sgphoto]

Goulet Pens is an excellent example of American marketing. Pay full price plus pay for shipping. Goulet sells pens but is really selling their marketing. They're folksy and some people eat that up while paying full retail.

A Pelikan 800 on Goulet Pens sells for 610.00 plus shipping. Cult Pens will sell you the same pen for about $390.00 plus free shipping. Now to those who want to pay for folksiness you go ahead.

To say that those who will have lots of money will spend lots of money and don't care about the price is ludicrous. People who have money didn't get money by spending more than necessary. Unless you're redneck nouveau riche you use the power of money to get better prices or you go elsewhere.

Nowadays, paying retail is foolish. Look at all the people who bought expensive pens at retail and are now trying to unload them. In many cases you can buy a new pen at the right place far cheaper than what they're trying to sell their used pens for.

Cult Pens are in business to make money, but just not a lot off of one person. I like them.

[NobleSixSeven]

They stay in business because people don’t pay attention to pricing. They also aren’t making a living selling a bunch of M1000s (and that goes for the European dealers too).

Add the 21% VAT to Appelboom’s pricing, and you’ll see what Europeans pay for that pen. You aren’t paying VAT, and you’re usually getting through customs without paying import or sales tax. Most States require you to report and pay tax on online purchases, and most people don’t do it. So technically, your pricing isn’t accurate.

Why would I add 21% VAT? Im not paying it in North America. Im reporting net cost to me. Goods less than $800 are exempt from import duties. So my pricing is accurate. At best, sales tax is about 10%, so add $40 to CultPens $400 price and you arrive at $440 which is half that of American retailers.


How is it justified? What do you mean by “justified”? People can ask what they want to ask, and people can pay what they want to pay. Most pricing is based off of MSRP. A lot of brands protect their pricing, and drop dealers that advertise or sell at too big of a discount.

Everyone knows MSRP is a BS number that people attach to play the "sale price" game. I agree with you that some brands are protective, but there's easily ways around that, which are out of the scope of this discussion at this time.

An M1000 is a luxury item. People who can afford them usually have enough money that the pricing doesn’t matter that much. It costs what it costs. If that markup bothers you, stay away from jewelry. Although the market is much more competitive now, when I sold jewelry it was marked up 300% or more over cost. Ex: Lab created emerald or ruby ring set in 10k with two .005ct diamonds. Price on tag: $199. Sale price: $99. Cost: $15

This is a silly argument. I am sure people care if they pay double the cost of a luxury good than someone else. I actually wear luxury watches too (Omegas, Tudors, Rolex, IWC thus far) and I dont pay the stupid absurd prices being charged for a Rolex in the secondary market, but do pay the discounted rates at grey market dealers. The same principle applies. Why would someone pay $8000 for an Omega Seamaster Deep Ocean when they can get it at Jomashop for $5000? Also we are not comparing manufacturr price like the example you gave since the consumer doesn't have direct access to a manufacturer, but rather to a retailer.

Lastly is gross profit vs net profit. A lot of people fixate on gross profit, and think it’s exorbitant. Business have overhead. Rent, utilities, labor, taxes, etc... Net profit has to be, well, profitable; or it’s not worth the bother.
I agree that there are a lot of expenses to be paid, but this is where the european retailers also excel. Their shops are small and their inventories are warehoused so they dont have a lot of overhead in terms of rent, taxes, payroll, etc. Take a look again at Appelboom. His shop is TINY but he moves a lot of inventory and runs an operation with less than 5 people. I think its just him and one other person.

See bolded

If you already know all the answers, why are you asking the question?

Why so serious? I’m detecting a defensive tone here. I’m trying to figure out if US retailers provide any value that merits the higher cost of the items being sold here relative to EU retailers.

Goulet Pens is an excellent example of American marketing. Pay full price plus pay for shipping. Goulet sells pens but is really selling their marketing. They're folksy and some people eat that up while paying full retail.

A Pelikan 800 on Goulet Pens sells for 610.00 plus shipping. Cult Pens will sell you the same pen for about $390.00 plus free shipping. Now to those who want to pay for folksiness you go ahead.

To say that those who will have lots of money will spend lots of money and don't care about the price is ludicrous. People who have money didn't get money by spending more than necessary. Unless you're redneck nouveau riche you use the power of money to get better prices or you go elsewhere.

Nowadays, paying retail is foolish. Look at all the people who bought expensive pens at retail and are now trying to unload them. In many cases you can buy a new pen at the right place far cheaper than what they're trying to sell their used pens for.

Cult Pens are in business to make money, but just not a lot off of one person. I like them.

Exactly. People don’t become millionaires by not caring what they spend. That’s stupid behavior. I bought both of my Pelicans from ThePenCompany and they were a delight to work with.

[Jon Szanto]

People don’t become millionaires by not caring what they spend.

Some people are born into it, some marry into it. Most of those people likely don't give a flying fuck about how much they spend.

[calamus]

People don’t become millionaires by not caring what they spend.

Some people are born into it, some marry into it. Most of those people likely don't give a flying fuck about how much they spend.

I've heard and even used worse language, but I think there's something sordid about the presence of that sort of profanity on a forum that's not primarily a hangout for say, punk rockers or people with Tourette's Syndrome.

[Jon Szanto]

I've heard and even used worse language, but I think there's something sordid about the presence of that sort of profanity on a forum that's not primarily a hangout for say, punk rockers or people with Tourette's Syndrome.

As the largest portion of my musical career has been a 44-year stint in a major symphony orchestra, including performances in Carnegie Hall, I completely fail at being your image of a punk rocker, though I did sit in with Pearl Jam one night. Then again, I don't really care: I've written at length and with careful crafting in manners that are far more genteel and refined than you are willing to give me credit for. If the use of one word is so offensive to you, after decades and decades of this kind of puritanical nonsense being slapped down for what it is (i.e. puritanical nonsense), I can't help you. Language, like any of the communicative arts, can embrace a very wide continuum of expressive tools. To restrict descriptors to bland, mundane and inoffensive examples of locution is a fate worse than death for anyone who loves the combination of language and passionate expression.

As of today, over 81,000 people have perished in our nation from a pandemic, and someone on the internet is worried about a 4-letter word that has been utilized for over four centuries. I remain amazed by the human species.

[TSherbs]

I've heard and even used worse language, but I think there's something sordid about the presence of that sort of profanity on a forum that's not primarily a hangout for say, punk rockers or people with Tourette's Syndrome.

Dude, a Tourette's reference in an aspersion?

[TFarnon]

G
To say that those who will have lots of money will spend lots of money and don't care about the price is ludicrous. People who have money didn't get money by spending more than necessary. Unless you're redneck nouveau riche you use the power of money to get better prices or you go elsewhere.

Well, sort of. When something catches my eye, I'll quickly check my preferred US retailers (up to 3 of them), decide if I'm willing to wait or want that item just as soon as it's available, and sometimes I do end up buying from Goulet or a similar vendor. I accept that I may be paying too much for a pen that just makes my head spin and my heart race. Some pens have that effect on me. And fortunately, I can pretty much afford to do this, as long as the price of the pen doesn't exceed $1000. If the price exceeds that amount, I'll think long and hard about it, and sleep on it at least once before making a decision.

[dneal]

Why so serious? I’m detecting a defensive tone here. I’m trying to figure out if US retailers provide any value that merits the higher cost of the items being sold here relative to EU retailers.

Not defensive at all. I’m wondering why you asked the question in the manner you did. I wasn’t sure whether or not it was a genuine question, but gave it the benefit of the doubt. It seems rhetorical, based on your responses; and I doubt you’re trying to see if U.S. sellers provide any extra value. This type of thread pops up on every forum about a given product, and it breaks down to “why do things cost what they cost...”. The funniest ones are the people who think things should be priced closer to material cost (there’s one of those threads here too).

If you want to bitch about Goulet’s prices, just do that. Wanna bitch about Pelikan’s pricing? Knock yourself out. You already know value is a nebulous thing. Clearly you’re a bargain shopper. I am too. I don’t buy pens if i don’t like the price. I just never see a reason to complain about it.

[NobleSixSeven]

Why so serious? I’m detecting a defensive tone here. I’m trying to figure out if US retailers provide any value that merits the higher cost of the items being sold here relative to EU retailers.

Not defensive at all. I’m wondering why you asked the question in the manner you did. I wasn’t sure whether or not it was a genuine question, but gave it the benefit of the doubt. It seems rhetorical, based on your responses; and I doubt you’re trying to see if U.S. sellers provide any extra value. This type of thread pops up on every forum about a given product, and it breaks down to “why do things cost what they cost...”. The funniest ones are the people who think things should be priced closer to material cost (there’s one of those threads here too).

If you want to bitch about Goulet’s prices, just do that. Wanna bitch about Pelikan’s pricing? Knock yourself out. You already know value is a nebulous thing. Clearly you’re a bargain shopper. I am too. I don’t buy pens if i don’t like the price. I just never see a reason to complain about it.

Since I am in the US, I would prefer to spend money here if pricing is competitive, hence why I asked about if there was any intangibles that could justify me paying the extra cash. Clearly this is not the same as asking why products are not sold at cost (obviously the manufacturer, distributor, and retailer all need to make some profit; what varies is the amount of profit made). For example, I just picked up an M1000 Raden Green Ray for 2000, rather than the retailers such as Goulet/Nibs.com/etc that want 3120 + tax. Its not as if the European retailers aren't profiting. Given the option, anyone will pay less for an item than more, so by your analogy, everyone is a bargain shopper.

Lastly, I'm not complaining about the price. I merely asked if there was any justification for it in in some other way such as customer service, warranties, etc...

People don’t become millionaires by not caring what they spend.

Some people are born into it, some marry into it. Most of those people likely don't give a flying fuck about how much they spend.

I'd wager that those people are a small minority in the millionaire category, even smaller minority of them being fountain pen owners. But then again, if you read what is said ("become" millionaires), it would exclude those born into it.
If you haven't read Millionaire Next Door or Secrets of the Millionaire Mind, there's strong data that shows that most millionaires fall into the frugal category

[Jon Szanto]

I took it to mean the act of becoming a millionaire, of which birth into wealth certainly could be considered. I do take you point, though. And, no, I have not read those or similar books and can’t opine on their observations.

[Sandy]

How to you make a small fortune selling fountain pens to the masses?

Start with a big one.

[Chuck Naill]

I sometimes will click on a pen for sale post here where the asking price is more than what the pen could be had for less from an online merchant. Then, over time those sellers will reduce the price and "bump" the thread until they sell or get tired of bumping. I've even read one who sounded frustrated for a lack of interest.

Probably the market for pens are not well represented on this other pen forums. When the buyer wants a pen, those online sources, with good information is able to attract the attention of the buyer. And, most of us would rather purchase from a seller we feel we can trust over some seller whose prices seem so low that a knock off is suspected.