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Ending Competition

Posted by Dirck on 12 February, 2013

I don’t think I’m going to surprise any of my long-term readers when I say that I’m not the best friend in the world of capitalism.  I am, in fact, a low grade socialist, having grown up in a part of North America where socialism briefly held sway and quite liking the overall sensation of “we’re all in this together”, even if the taxes seem slightly high.  However, I’m not here to promote socialism (one need only look at the quality of life and citizen happiness indicators for that).  Rather, I’m here to decry an effect of capitalism that will presently afflict the pen-buying public.

Recently, there was a question in one of the fora about the pricing of a Waterman pen at what had been one of the more reasonable sources for new pens by that maker.  The price was, to be blunt, surprisingly high given that seller’s traditional approach.  What, a small slice of the Waterman-fancying world wanted to know, was going on.  A couple of people speculated that there may have been some kind of pricing crack-down; the seller is in Europe, and manufacturers in Europe will frequently push sellers around on the matter of Maufacturer’s Suggested Retail Price.  Presently, the seller appeared and in essence confirmed this speculation.  I will elaborate on the matter.

Newell-Rubbermaid, the tyrannical overlords of Waterman, Parker, and Rotring, have begun to these brands directly through Amazon.  They are not selling at wholesale prices, of course, but rather at their own MSRP, since the M in that acronym is now also the retailer.  Because they are selling to other retailers at wholesale prices (which is how retailers make the money on which they live, right?), they do not like the idea of entering into competition to sell their products below their suggestion.  They thus begin to throw their weight around.  “Sell at the price we tell you,” they say, “if you want to have any to sell.  Disobey and be cut off from the source.”  This is a style of jack-bootery one has come to expect from Mont Blanc, but it’s disturbing to see it creeping into the realms of pens normal people can afford.

I have a vague memory of the pen makers of the US getting in a little trouble for this sort of thing in the… 1930s? Maybe the ’40s?  In any event, there was, if memory serves, a certain talk of anti-trust application and some finger wagging by government regulators.  That, of course, was back in the days before the multi-national corporation had fully formed, and before the tykes weaned upon Ayn Rand had gotten their mitts on the levers of government and declared regulation a dirty concept.  It was also before internet marketing, and I think this is the real source of the worry.

The renaissance of the fountain pen is, as I see it, bound up with the rise of the internet, so I have some ambivalence on the topic.  Like most magic or technology, it is black or white depending on how it’s applied, and so I have to reserve my praise or damnation for those who wield the power rather than the power itself.  This renaissance which I revel in has had its own attendant plague, too– despite the growing interest in pens and the growing numbers of users, the number of actual shops– physical real-world brick’n’mortal establishments– has dropped, being competed into dissolution by internet pen outlets.  The internet outlets, after all, were getting the same wholesale rates as the physical shops, but could eschew the MSRP and still make a tidy profit, lacking the sort of drag-anchors the real world imposes upon a storefront operation; rent, utilities, staff, cleaning, and so forth.

Now, though, the internet sellers are being faced with a similar sort of problem.  The only thing they need is something to sell, but they suddenly find their supplier is also their competitor.  One part of me says bravo, it’s time you lot got a taste of the bitter part of the internet.  But another part of me, and I fear it’s the part with foresight, says that this is bad news.  Back in that earlier patch of ill-remembered weight-throwing, even without the national government swinging in on a vine and pounding its mighty chest, the manufacturers still had old Adam Smith’s invisible hand resting uncomfortably upon their shoulders.  They still needed storefronts out in the world, and if they pushed retailers too hard, the retailers could with a little bit of note-comparing, cry out, “Nuts to you, buddy!  Find someone else to peddle your markers!”

The current situation is different  and that invisible hand is being sat upon by its invisible rump.  The manufacturers have a storefront, essentially free of charge, in every house on the planet with an internet connection.  The retailer, whether B&M or net-based, has lost the small power they one had in the relationship with the manufacturer.  The best they can do is creep upon their knees, forehead tapping against the ground, begging, “Please, Sir, may I have some stock?”  While this puts the real-world shops back on an even footing with the netlings, it does away with the ability to adjust prices for local conditions, and I suspect it will not do a lot to halt the losses of pen shops in the world.

My darkest vision of the future shows the less carefully stewarded manufacturers going belly up in a few years, as the tyrannical overlords examine how hard they can squeeze the brand names before they collapse and then discard the flattened corpses as useless.  The better run companies, which are generally those held by families rather than conglomerates, will continue to see the sense of milking a cow rather then battening upon its major arteries, and will probably carry on in much the same state as today for rather longer before the senescence of complacency stifles them.

Worse times, though, for those of us outside the factory.  Discounts vanish.  The delightful little shop where an informed clerk assists you in  trying out several different models and brands becomes as easily found as one which sells magic wands.  The renaissance stumbles as people, making purchase decisions based on rumour and appearance, once again stop caring about performance.  The manufacturers each become a monopoly so far as the sales of their brand go (how long before the retailers are made to choose which one brand they will sell, do you suppose, which fealty to swear?), and monopolies tend to be hard of hearing when their consumers speak– which is why I speak of complacency in the previous paragraph

One may hope that the smaller manufacturers, the TWSBIs, the Franklin-Christophs, the Edisons, and perhaps the Stipulas will steer clear of the temptation to go the same route, although all do have their own retail operation.  The seller mentioned at the beginning has apparently tried to jump ship, from Waterman to Pelikan or Lamy, and found that for his country at least they have no interest in an independent on-line retailer carrying their product, so it’s not just that one conglomerate that’s trying this mode on for fit, and that is a source of deep concern.

I’m no economist.  I am, perhaps, an alarmist.  I certainly can offer no concrete suggestions; a boycott of any of the above doesn’t help the people selling them.  Is this the sort of thing that an anti-trust suit can be mounted to stop?  Can one say, “You cannot be manufacturer and retailer” with a straight face?  I’m a low-grade socialist, sure, but that smacks of the worst and most comic-opera elements of a purportedly communist command economy.  All I’ve got, once again, is worries that only heavy drinking can do anything about, and that is at best a temporary relief.  I know that smart people look in at the comments, and I will kiss the forehead and bless the offspring of anyone who can explain to me how my fears are entirely without foundation.

Today’s trembling pen: Parker Duofold
Today’s quivering ink: Noodler’s Couleur Royale

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10 Responses to “Ending Competition”

  1. Maja said

    I share your worries, but I still think the best bargains are gently-used pens from online sellers. I know some sellers of new pens do not list their online prices, but rather, request that you email them for a quote. It’s a tad annoying to me (as a potential buyer), but I understand the reasoning behind it.

    • Bah. The worst of it is an appeal to exclusivity (let me just carefully write the price on this folded note-card and place it on the salver which Jeeves will hand across), while the less culpable aspect is honest effort to avoid the compliance squads which no doubt even now troll the internet like those big scary jellyfish deals in The Matrix (how much did you say? Excellent. You’re cut off). The notion of a fountain pen internet speak-easy carries with it the potential for organized crime, and finding the coveted sapphire Edson one ordered for less than Waterman.Amazon.Com is demanding is in fact a Pez dispenser; if Waterman can’t find them, neither can the cheated customer. You’re right that the current ugliness doesn’t apply to the already-used pens of the world, but SOMEONE has to buy the things in the first place.

      Is this, I wonder, a Cassandra complex, or some variation on Munchhausen’s….?

      • Maja said

        The compliance squads of which you speak are the same people who troll the internet for snippets of television programs or films which are protected under copyright. I don’t like what they are doing, but it’s their right to do. In the same way IF a pen dealer has an agreement with a pen company to only sell their products at the MRSP, he or she should comply with it. I find pen prices to be so arbitrary anyway; that’s why I’d rather buy a used modern pen in good condition, or a nice vintage pen.

      • Therein lies my angst at the end of the entry– it is, indeed, their right to do it, and to constrain that right would be extremely problematical. But EXERCISING the right is also problematical, as the right comes without responsibilities and acts as a constraint on a lot of other people. That immoderate “Bah”, by the way, wasn’t meant for you; your “tad annoying” is, in this case, my “deeply vexing”, and more because of the exclusivity side of the equation– my curiosity about the prices of Mont Blancs, and purely idle curiosity it is, gets thwarted by that whole CALL FOR QUOTE thing, and I foolishly allow it to fester.

  2. Andrew MB said

    It is a sad situation that you so ably outline, and I think it simply points to the greed and disgust that captains the good ship Capitalism these days. When will people ever see that we really are in this together? It is depressing that the tinsel sparkles so brightly. Thanks for your perceptive eye, though as it’s been said before, that and $1.50 gets me on Winnipeg Transit.
    Andrew

    • I had a slight hope/fear that the whole edifice of capitalism had sufficiently devoured its own foundations that the 2008 crash was the start of the reformation, as uncomfortable at that prospect is. Adam Smith is actually worth a look, for as much as his line about letting free markets curing all ills gets trotted out by the deregulationists; the thrust of The Wealth of Nations is in essence that the only thing letting powerful industrialists dictate policy to the government will get you is a badly wrecked economy and, in the context of his day, an American Revolution.

  3. Walter said

    There are still some good to almost great pens at decent prices out there. I’m amazed how rapidly and high prices for all brand name pens have gotten. When you see a buy it now price of over $100 USD for a used Esterbrook J it is obvious to the manufacturers that they should charge a premium as well. They should not however lean on independents who want to charge less if that is their wish.

    • I suspect that the $100 Buy-It-Now kids are generally not getting their asking price when the end of the auction day rolls around; that’s the laudable effect of competition, and one of the less squalid faces of the “free market”. If, however, that guy were the only one in the world with any Esterbrooks….

  4. Walter Beaumont said

    I think it is a function of marginal utility. When you have 15, 20, 25, 30 pens or more, each additional pen adds less and less utility. If you had two or three, you wouldn’t mind paying more as they would give you more benefit. I’m reminded of my cousin who lives in Germany, I went with him to shops one day when he bought a new pair of jeans for something like $50 when the same pair of jeans would cost you $30 in the States. He had one pair and wore them until they fell apart. I have 4 or 5 pair and they seem to last forever!

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