Authorised Dealer Vs Grey Market Dealer

[jpr]

The grey market exists only because some authorized dealers do not price the product correctly.

I'm sorry, but you don't know what you are talking about. Gray markets exist in various places for many different reasons. I'm not an economics expert, but as a moderately successful authorized dealer for six pen brands, I know a little about this business and how it works.

 

There exists a gray market in the U.S.A. for certain Pilot models that Namiki/Pilot USA chooses not to import. I've had conversations with the president of the company about this, but I have so far gotten nowhere. I brought up the décimo, pointing out that people here are buying décimos from Japanese dealers because they aren't available here. He countered with the remark that the décimo is cheap plastic, not solid metal. He said he'd have set the MSRP at $XXX.00. I responded that people like the pen precisely because it is not as heavy or fat-bodied as the regular Vanishing Point and that given his MSRP number, I could apply Pilot's own rigidly enforced pricing guidelines and sell the décimo inexpensively enough that I could ship it to a purchaser in Japan for less than that person can buy it for there. (Which means that an America purchaser could save roughly 1/6 of the pen's price by buying it in the U.S.A. from an American dealer.) I cited the current exchange rates, percentages, and shipping costs to back up my assertion. But, having proven that the décimo would be a winner here, I still can't order it.

 

For many years there was a gray market here for Pelikans because there was a ready supply of pens being made available to dealers by a German individual at prices below the prices demanded by the then-authorized U.S. distributor.

 

There was for a while a gray market here for Platinum pens. This gray market existed because Platinum was selling pens to Japanese dealers for the same prices that it was charging the U.S. distributor. These dealers were then wholesaling the pens to dealers in other countries for prices that allowed those dealers to sell the pens for less than we U.S. dealers could buy the pens for from our own distributor. The distributor was driven out of business by Platinum's own unfair pricing tactics.

 

Price-gouging dealers are a serious problem only in countries where there are no honest dealers. In any country where there are even a small number of authorized dealers who price correctly, there is no need to seek gray-market pens of the brands those dealers handle.

 

I'm sure everybody knows you here, Richard. And, I for one have been a customer of yours on a few occasions and I'm quite certain you know of what you speak.

However, the grey market that the OP was talking about, at least my interpretation of it, are for pens that are available BOTH from authorized dealers and grey market sellers.

And that authorized sellers are being harmed BECAUSE of their products also being sold by the grey importers.

 

Now, your Pelikan example is a prime one in that it illustrates my original point. You wouldn't have had to buy the product from the German individual IF the then-authorized US distributor

sold it to you at a good price, would you?

 

Your Platinum example, however, is an illustration of how a manufacturer can create a grey market for their own products and, hence, be the cause of the downfall

OF THEIR OWN DISTRIBUTOR. That has nothing to do with individual import grey units but it has everything to do with, as you put it, "Platinum's OWN unfair pricing".

 

And, lastly, I agree with your last statement, but not entirely. Yes, price-gouging is a serious problem but it is not only relegated to countries that have no honest dealers.

The highlighted portion of that last statement is what I was talking about in the first place.

 

We are both a manufacturer and importer of goods in our country and we've been around for a hundred and twenty years. Yes, I know what I'm talking about.

Edited June 12, 2009 by jpr

[MarcShiman]

I think this conversation should be - what does the "authorized reseller" offer in value to me? Why should I care if a seller is "authorized" (other than warantee rules)?

 

Generally the concept of an authorized dealer network is set up to minimize the price competition between dealers, therefore maximizing their profit (and therefore their desire to push the pens). Theoretically, there is some degree of vetting to ensure the dealers provide a certain level of service. Grey market pens often come in because the price fixing works well enough that someone can buy pens outside the network at a wholesale plus cost and comes up with a price that makes them some money despite the added costs of importation

 

I actually don't have a problem with companies that make profit on their pens. As Richard noted, it keeps them in business. However, simply because a pen seller is authorized means nothing about their level of service. I know some sellers of pens that don't have certain dealerships that provide wonderful service and I'd have no problem buying from them. Similarly I know other sellers that have large networks of poorly staffed retail stores that provide zero, sometimes rude service that are authorized.

 

In short, the authorization by itself means little to me. I think its very short sighted of a company that makes a product for worldwide distribution to determine whether or not it chooses to stand behind its product depending on whether the market in which it was purchased was the one the company determined it should be sold. In the age of the internet, the idea of these borders determined by continents no longer holds the credibility it once did. Come on, guys catch up! I can buy a pen out of the UK or Europe just as easily as I can from the US! Why am I artificially limited to dealing with sellers in my country?

[-GP-]

MarcShiman,

 

I must warn you: this website (in your signature) tried to install a trojan. You can use many tools to detect this. Be careful!

[pen2paper]

little comment in line with Richard's post..

in an earlier posted I noted that the VP is on my "list'.. a roadtest of my physician's nibmeistered VP is what brought me back to full use of fountain pens.. now daily at work.

But, haven't purchased a VP, as I'm worried that, like my unused Carene in its original box, it's a bit big, and too heavy for my hand.

The smaller, lighter? Decimo looks like it would be perfect for me.

Knowing that Richard checks nibs before sending out-well that would be a sale.

I can no longer afford to be buying pen after pen that do not fit, or fulfill my specific needs for a reliable daily writer.

I'm fairly sure that the gentleman would counter that one sale to a lady with small hands is too limited to bring the Decimo to Richard's business address-which is a disappointment.

However, thanks for your effort.

[offbase]

Service, as others have said, is the key. If an authorized dealer sells me a pen that doesn't write out of the box but won't refund or exchange it (telling me, instead, to send it to the manufacturer for service), I won't buy from that dealer again. If a gray market seller stands behind what he sells by refunding or exchanging defective product, to me, that's as good as -- if not better than -- a warranty, and I would patronize that seller. To me, the odds of having something happen if the pen checks out well after using it for a week are pretty low. Telling someone to have a "new" purchase repaired via a manufacturer before you even get to use it is laughable to me. I buy from Swisher, Richard, Pam Braun and Bryant. Why? Because THEY stand behind what THEY sell, and don't hide behind the manufacturer's warranty. To me, that is a responsible seller. That's huge for someone who buys 80% Italian and doesn't want to brave the Italian postal service and customs and, if those are survived, wait months to write for the first time with a pen you paid for forever ago.

 

I also agree with the poster who stated that authorized dealer networks are a method of price fixing. BINGO! Supply and demand isn't at work in that situation, unless the call comes directly from the manufacturer or distributor.

[Banana]

If the price difference is significant I will go grey market every time and I have never bought a new pen from an authorised Australian distributor or their agent. I bought a Lamy 2000 from and a Pilot Decimo (which is available in Australia) for considerably less than 1/2 of what the Australian distributors charge. At those prices I don't care about service, if something goes wrong with the pen I can buy a replacement and still be ahead.

 

I also think that they grey market is a good thing for consumers. I work for a large importer and authorised distributor of many American brands (not pens) and in our industry the globalisation caused by US online sellers has caused us to reduce our prices and in many cases has allowed us to successfully negotiate better deals with the manufacturers. If local pen importers don't start doing the same they will see more and more of their profits going overseas.

[jpr]

Authorized dealers such as Richard, Printhardcopy, Mottishaw, Winedoc, and nearly every dealer on this board need not worry about the grey market

because they give excellent service AND their pricing is spot on.

Our hobby community is a small one and any deviant who tries shenanigans will quickly learn how close knit this community really is.

Information travels fast in the pen world. Not to mention FPN.

[Amelorn]

Although I am new to the forum, I am not new to fountain pens. When shopping for pens, I generally go through a list of places: UK/Scottish retailers (I attend university there), local shops in New York (my home), US based online pen retailers, amazon.com, and ebay. Ideally I will buy from shops/retailers as the product description is thorough if online or obviously it is right in front of me in the case of a brick-and-mortar store. Ebay delivers superior prices but higher risk. Product may not be exactly as described, it's used etc. Usually its fine. I bought my first 2 pens in St Andrews, Scotland from the local stationary store (which contented me for some time), but I bought my third on ebay. It was a Cross Century II medalist for $45 (normally retails for $95). I then bought an 18k nib for $35.

[Pippin60]

I think it depends upon the price of the pen. An expensive 100$+ Pelikan, or any MB, I go AD.

[jpl]

I buy my Pelikans from Martini and never had any problem.If I pay 700 for a Pelikan toledo and have a problem with it I pay for the repair and still will be cheaper than an AD.So it depends also which gray market you buy from.