News: A Shifting Pricing Strategy in the U.S. Market?

Pelikan logo cap topsOver the last month, I have been repeatedly asked by fellow pen lovers as to why U.S. prices for Pelikan’s fine writing instruments far exceed that which is available elsewhere.  It’s no secret that over the last few years, an increasingly growing number of U.S. consumers have awakened to the realization that Pelikan fountain pens can often be had for significant savings when purchased from overseas vendors.  The U.S. market has seen a steady increase in the price of Pelikan’s fine writing instruments, the last swell coming in February of 2016.  Consequently, authorized United States’ retailers have historically had to offer their Pelikan wares at significantly higher prices than competing international merchants.  Regardless of what factors may have contributed to that discrepancy, the end result was a tilted playing field that made it incredibly hard for US vendors to compete in what is clearly a global economy.  I have always questioned the disparity in pricing and wondered why U.S. customers are dealt with so differently?  It’s a passionate issue for me because I have a deep affection for the brand but their marketing strategy has prevented me from recommending even an entry level Pelikan pen to anyone starting out in this hobby since these too are often priced higher than competing brands.  

For the last month, I have done extensive research into the economics of why Pelikan’s U.S. pricing might be the way that it is and that is what I intended to present to you today.  Just as I was preparing to publish that article, Pelikan/Chartpak called an audible on me and therefore I have scrapped that entire post in favor of this one.  What I present to you now is evidence that there may be a major shift in U.S. pricing silently occurring and our domestic vendors and their customers are likely to reap the benefits. 

 

Pelikan M800 Renaissance Brown Fountain Pen

 

Let us begin the discussion by way of an example of recent market pricing that illustrates the situation of the last several years.  For this case in point, we will look at a 2017 model, the highly popular M800 Renaissance Brown.  The EU/German MSRP was €480 ($558.62) and the pen was available at retail for €384 early on ($446.90) and currently sells for €480 to German buyers (including their standard 19% tax).  The U.S. MSRP was $800 and the pen was sold at retail for $640 to domestic consumers.  The Renaissance Brown was available to U.S. buyers from overseas vendors for approximately $400, a significant savings over domestic pricing and even cheaper than what consumers in Europe might pay.  Even when taking the value added tax (VAT) into account, U.S. buyers still paid more, $100 – $200 more in this example per unit if bought from a U.S. retailer.  A similar story has unfolded with most of Pelikan’s releases over the past several years.

I cannot say whether it has been Pelikan, their North American distributor Chartpak, or a combination of the two that has historically dictated the market strategy for the U.S.  Whoever is responsible, examples such as the one above have likely caused many North American customers to balk at domestic pricing and look for ways to purchase at lower prices, namely by looking to international retailers.  Pelikan has also risked a backlash from higher paying customers who have begun to doubt the perceived value that they are receiving from the premium prices paid which can result in a feeling of being taken advantage of.  Below you will find a table detailing several M8xx releases from Pelikan over the span of 2012-2017.  This table is not all-inclusive but it gives you a fairly good idea of the North American asking prices for several M8xx sized Souverän fountain pens.  The MSRP has averaged somewhere around $820 over that period and has remained somewhat constant though markedly higher than what has been available from overseas.

M8xx Model
Year
MSRP
US Retail
M800 Tortoiseshell Brown
2012
$750
$600
M800 Burnt Orange
2015
$845
$676
M805 Stresemann
2015
$800
$640
M805 Vibrant Blue
2016
$875
$700
M800 Grand Place
2016
$850
$680
M800 Renaissance Brown
2017
$800
$640

 

With the announcement of Pelikan’s newest M805 model, the Ocean Swirl, we have confirmation that Pelikan/Chartpak may indeed be altering their pricing policy in the North American market.  This was first hinted at by the pricing of the recently announced but yet to be released M605 White Transparent.  The U.S. MSRP for that pen is just $475 with a U.S. retail asking price of $380.  That is just about identical to what you can order this pen for from overseas vendors (€319.67 or $382.04 excluding VAT), essentially negating any advantage to purchasing abroad.  This is unusual because the M600 Pink from 2015 had an MSRP of $625 and sold for around $500.  Likewise, the M605 Marine Blue (2013) and the M600 Vibrant Green (2014) had MSRPs of $595.  I cannot recall any instances in recent memory when pricing for almost anything actually fell, can you?  

Pelikan M605 White Transparent Fountain Pen

 

My conclusion at the time the M605 pricing was announced was that it was too soon to know whether this represented a change in policy or whether it was a one time freak occurrence.  I have learned today that the U.S. MSRP for the M805 Ocean Swirl will be just $650 with a minimum advertised retail price of $520.  That MSRP and retail price represent a 19% reduction over what was asked for the Renaissance Brown.  Remember that the European retail price for this upcoming model is €430 (~$505.68) for US customers (minus the VAT).  Just like with the White Transparent, current U.S. pricing seems to be in parity with that of overseas vendors.  Perhaps it is too soon to tell whether or not this reduction is part of a broader stratagem to bring the U.S. market more in line with the international stage thereby boosting sales in said market.  If this is part of some greater strategy, then I commend Pelikan/Chartpak for the somewhat overdue effort.

Pelikan M805 Ocean Swirl Fountain Pen

 

Why now is anyone’s guess.  My suspicion is that savvy consumers in the US have been reaping the benefits from shopping overseas which has likely pressured Pelikan/Chartpak into rethinking their marketing strategy due to lost sales in the region.  Of course, no data is available to support this supposition but it is a reasonable consideration.  Some fairly significant factors likely had to play into the pricing of these two models for the U.S. market and I can’t imagine anything more motivating than profoundly declining sales data.  The winners here are US customers and hopefully, this will extend to their preferred local retailers.  U.S. purchases have always come with a 30 day nib exchange and 3 year warranty serviced through Chartpak which certainly adds to the value of a pen purchase and should not be overlooked.

What are your thoughts on this developing trend?  If all things are relatively equal, will you bring your purchases back to those retailers in North America?  If this persist, will it change your purchasing habits?  Are you more likely to buy more Pelikan pens in the future?  I’m sure that Pelikan/Chartpak are hoping for an affirmative answer to all of the above questions.  The continuation of these much more attractive prices may very well depend on it.

57 responses

  1. This would be a welcome change. Not only does it level the field for American buyers it makes Pelikan more competitive in value/price comparisons with the Japanese offerings from Pilot and Sailor. If this is true, we’ll done Pelikan. Perhaps I see that beautiful new m800 release in my near future!

    Liked by 2 people

  2. In the last year or so, I have bought two new Pelikans: the Renaissance Brown and an M600 green stripe. These both were purchased from La Couronne du Comte at considerable savings over US prices. Although Chartpak won’t honor the warranty on these pens, the level of customer service from LCdC is unsurpassed–they took care of a minor problem with plating loss on the clip of the M600 quickly and at no charge to me. I did not even have to return the pen–they simply sent me a new cap.

    Even if US prices were equalized with VAT-free EU prices, I would be reluctant to switch to a US dealer. If Chartpak’s customer service were to improve to the level provided by LCdC, that would influence me to buy from a US source, but it’s very difficult to leave a dealer who has bent over backward to take such good care of me.

    Liked by 2 people

    • I totally agree with this post. LCDC is the best and is my #1 “go to” place to buy pens. I pre-ordered the Ocean Swirl and paid about $420 for the pen using a 20% discount code being offered. I see today that Fahrney’s is selling the pen for $520. So I still saved $100, and I see no reason to stop buying from LCDC. The US vendors, while they may be closing the gap a bit, still have work to do.

      Liked by 2 people

      • That coupon code last weekend made the purchase very attractive. I eyed that myself but was able to find a matching deal elsewhere. I do think we may see some more lee way in U.S. pricing in terms of pre-order sales. The Nibsmith, for instance, is offering $520 plus 10% off plus a free nib customization for pre-orders on the M805. That kind of value pretty much brings it in line with the LCdC price.

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    • I can totally respect and understand that kind of loyalty. I have heard nothing but good things about LCdC and my own experiences have been excellent. I don’t see Chartpak as currently offering that same level of customer service. The whole U.S. distributorship is kind of a sad state of affairs, IMHO.

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  3. I had not realised that there was such a disparity with Pelikan pricing, between the USA and the UK. I have purchased three new Pelikans in the past two years and have used Cult Pens and The Writing Desk, both of which provided faultless service. The current price of a standard M800 from Cult Pens, is £290.00 and has I think been the same for a year or more, whilst they sell the Renaissance Brown at £490.00.

    Liked by 2 people

  4. I have purchased quite a few 800 series Pelikans and over the last few years have shifted exclusively to European dealers (Italy or Netherlands) due to the large price discrepancy with US vendors. I have never had a problem with a Pelikan and in any case trust the customer service from the European dealers.

    I would prefer to patronize US dealers, many of whom are also terrific, but will not pay a significantly higher price to do so. With the pricing change that is apparent I will now order my Ocean Swirl from a US dealer. I am glad that Pelikan and/or Chartpak have smelled the coffee and are adjusting.

    Liked by 2 people

    • Like you, I have purchased nearly exclusively from overseas vendors though predominantly out of Germany. Excellent prices and even better service. I don’t know if I can all of a sudden turn my back on that relationship. I think Chartpak needs to really step up and bring some value to the brand if Pelikan hopes to win back a lot of those who forged relationships overseas.

      Like

  5. What a fantastic post and news!

    If this really is a broad change in the pricing policy, then I’ll definitely purchase more pens from this brand. I currently only own two pens from Pelikan, even though it’s one of my top three brands. However, in my effort to support local and US retailers, I have steered away from Pelikan in my purchases precisely because of feeling being taken advantage of by the huge price discrepancies.

    Liked by 2 people

    • Thanks for your insight. It is good news indeed and should empower likeminded individuals to purchase more freely in the U.S. without feeling taken advantage of when compared with the rest of the world.

      Like

  6. I have a total of 6 Pelikans and the 805 Ocean Swirl is destined to be #7 and I am very happy to see this adjustment. I too always felt uncomfortable by the obvious differential and bought my last 800 from overseas despite my desire to buy from a US vendor. It’s good to know that I will be able to bring my business home.

    Liked by 2 people

    • Glad to see support for the local vendors whenever possible. Sadly, previous pricing policies just made it impossible to do so. It just wasn’t feasible, especially for those of us who make regular purchases.

      Like

  7. Thanks, Josh—a ‘priceless’ posting. After several years of enjoying superlative service from LCdC, I too am reluctant to switch to a domestic source. An example—my M800 Burnt Orange arrived with a wonky nib (one tine-tip twice the size of the other)—within days, Dennis vdG had furnished me with a no-charge replacement…I doubt ChartPak could have done better, warranty or not. That said, I’m pleased that other US buyers will now feel freer to deal with their preferred home-based vendors. Thanks again… Jack

    Liked by 2 people

    • You’re welcome. I can definitely understand your sentiments. I would like to see more from Chartpak if they hope to win over people such as yourself. You certainly won’t go wrong shopping from LCdC though.

      Like

  8. Pelikan’s quality has been consistent and reliable, so I don’t really concern about whether or not Chartpak honors the oversea purchase, but it is indeed good to have the warranty handy buying domestically. If the pricing is about the same, I would support a U.S. companies, like Fahrney’s and Colorado Pens. (By the way, I think there is no sales tax when I buy from Colorado pens & Fahrney’s, but I am not sure why.) The foreign exchange rate fluctuates, and fees add to the cost kind of unexpectedly. For example, my recent purchase of Renaissance and Ocean Swirl from LCDC, my BofA visa had a separate charge item: extra 3% foreign exchange fee – which with all that said, it is still cheaper than U.S. price. And I agree, LCDC packaging and customer service simply superb. In another post, Joshua mentioned about the lack of real pen shops these days. I do miss it when I can go in and actually see the look and feel of a pen. With pricing lower, perhaps the demand would be up and revive the existence of pen shops again? Though it is highly unlikely.

    Quick question, Joshua, the photo of this post, the 3rd one from the bottom left to right. Looks to be a very old logo. Which was it? Thanks.

    Liked by 1 person

  9. I purchased my M805 Streseman with an additional nib overseas due mostly to the price difference. The other reason was because that dealer also offered BB nibs…glorious! The price difference was so substantial I was able to get all of it for about the same price as the pen only in the US. I prefer to shop in the US, but refuse to do so if it involves paying a premium. I wasn’t born yesterday. If the US prices are truly competitive, my next Pelikan will come from a US retailer.

    Like

    • No arguing that logic. I’m not sure how things got so out of hand here in the U.S. but it became somewhat absurd to make the purchase here when hundreds of dollars could easily be saved shopping elsewhere.

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  10. This does affect me directly. I bought the Pink M600 at $500 from a U.S. retailer in early 2016. At the time, I was not familiar with the more competitive pricing of Pelikans through overseas retailers. Since then, partly by reading this column and partly by shopping online, I have become aware of the disparity. However, I very recently saw the White Transparent M605 “sister” pen to the Pink M600, and I knew I had to have her. I found the pen for $380 on Classic Fountain Pens. Since I also wanted a stub on my nib, and the price was competitive, I went ahead and pre-ordered one. I was pleasantly surprised to see that the price of the White Transparent M605 was way more competitive than the Pink M600. I wondered what had happened to bring the price down, given the recent upswing in U.S. prices. I hope this will be a continuing trend. If it is, I will be certain to give my Pelikan to U.S. retailers. Since I have never bought a Pelikan from an overseas retailer, I’m not already in the habit, nor have I experienced their customer service vs. the customer service of U.S. retailers. I am loyal to several U.S. pen retailers in general, so I will give my business to them, as long as I can get good prices on Pelikans. And since I am starting to amass a decent little collection, I don’t see that trend changing. So I will be giving them a decent amount of business in the future, as long as I am able to fund my purchases. I am very happy to pay the lower prices! I hope the lower-price trend continues.

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  11. I love your articles, thank you.
    Regarding the actual pricing, maybe it’s economics 101….. another apparent Pelikan retailer in town who appear to have all the new editions taking business away from traditional “official” distributers . Namely Massdrop!

    Like

    • I’m glad you’re enjoying my site. Thanks! Massdrop is an interesting animal and certainly can be a source for good deals. The economics of pricing is fascinating. Quite a bit goes into it and it seems easy to get wrong which is what I think Pelikan/Chartpak had done with the US market for a while now.

      Like

  12. I think this strategy for higher prices in the U.S. market was affecting the retailers, i have to say i live outside the U.S. (Guatemala) and here there are no retailers offering high end Pelikan FP so we buy via internet, of course the U.S. market is simpler way to go but it’s seamlessly if i buy in the U.S. or in EU, this days when global commerce is sush a normal thing thanks to the internet it makes almost no difference when buying from overseas, i sayd almost no difference because of course there is no warranty, but thinking about the Pelikan quaity, is this a decition factor? i think not, some pens are in the ~$300 less, even with a warranty issue you could send it back to EU and it wil still be cheaper than in the US market, i have even seen better prices in Mexico, so at the end i think the persons that love Pelikan are not affected but the retailers are, and it prevents Pelikan to broad their brand among new costumers i hope they continue with this trend because my M1000 is still at some store waiting for me, and some day maybe a L.E. and who knows what else y simply love Pelikan’s, by the way thanks for your advice it was definetly a decition factor in my last purchase (M800 RB) 🙂

    Like

    • Thanks for your comment and you’re welcome. I totally agree that the retailers probably suffered the most from the pricing policies. Hopefully that situation will improve with the current trends.

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  13. Hi, Josh,

    Thanks for a great article.

    Recently bought an M800 Burnt Orange from nibs.com. Decent price,

    Going to place an order with Cult Pens today for an M1000 (trying to decide between F and XF). I understand it’s going to be about $450.

    Some may remember Pam Braun, a delightful lady who had the best service and prices. Bought pens from her for years. It was simple, 40% off all pens. And, yes, Pam had a B and M store….

    Oh, well. Thanks again, Josh.

    May we all have great words flowing out of our pens.

    Best regards,

    George

    Like

      • Josh,

        Off the subject. See you’re in Philly and assume you know of Girard College.

        Anyway, I attended about four years starting in ’49. Yes, I’m a few years old. Back in those times, it was strictly a boy’s school and we attended year round.

        You’ll like this. Can’t remember the grade, but we were introduced to fountain pens. Yes, they were in a cardboard box with dividers. They were passed around, we filled them, and so on. After using them we (oh, forgot, Esterbrooks) moved the lever to put the unused ink back in the bottle. It was sort of a coming of age thing. The first was when we went from knickers to long pants.

        Oh, well…. Surely wish I had stayed and graduated.

        Regards,

        George

        PS. For you who don’t know about Girard, it was a 1-12 school. Not a college as such.

        Like

        • George, I know Girard College as a local boarding/prepatory school. I’m sure they don’t do much work with fountain pens these days but thanks for sharing the story. Interesting how you would save the remaining ink in the pen by returning it to the bottle rather than leaving it in the pen.

          Like

  14. Interesting read, thank you Joshua.

    What boggles my mind is the pricing of pens which are not even out yet and are selling way under RRP. What is the value of the pen then?
    It is still cheaper to buy from EU (Especially Germany) than from UK – but I guess we can blame that one on you know what (starts with B, ends with exit)…

    Like

    • Cost of manufacture and value of an item are often two wholly separate considerations. The pen may only cost $25 to make but retail for $400. A great many factors go into this, one of the major being the item’s perceived value.
      Investopedia explains perceived value as; “A consumer’s perceived value of a good or service affects the price he is willing to pay. While actual value is a reflection of the true costs of production coupled with the costs associated with the product’s sale, perceived value is based on customer opinion. It reflects the value of a product as assigned by the aforementioned consumer, which may have little to do with the actual monetary value of the product. Customers place value based on the product’s theoretical ability to fulfill a need and provide satisfaction, also referred to as utility.” I agree with this and at the end of the day, value is a very subjective thing that varies from customer to customer.

      Liked by 1 person

  15. Arbitrage

    In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices.

    —–

    The Internet has changed everything. Before the Internet, you would never know that a single exclusive U.S. importer/distributor like Chartpak was gouging everyone with ridiculously high price mark-ups. But now you know, and buy direct from abroad instead. Knowledge is power – the power of arbitrage in this case.

    This same sort of thing is going on in the U.S. with Japanese pens too, which in the U.S. are often double the Japan-direct price. And no, the huge difference is not due in large-part to shipping, duties, and taxes. Not in the U.S. anyway. Everyone is willing to pay some more to have a local distributor handle warranty issues in country, but 100% more? I don’t think so!

    Now I buy all my Japanese pens direct from Japanese resellers. Tracked shipping for a pen by air to anywhere on the globe from Japan (via EMS) takes about a week or less, and currently costs around $12 USD or less. I deal with the Japanese resellers directly if there is a warranty issue, which has worked well so far.

    Be smart, buy direct.

    Liked by 1 person

    • Thanks for your input David. I agree that the internet has changed everything. Markets are no longer isolated and savvy consumers have significantly more freedom than ever before. To not take into account the global nature of today’s economy is perilous for companies that sell the same product in different markets.

      Liked by 1 person

    • David, thanks for your comments. I’ve often wondered about buying Japanese pens direct from the source. It’s good to know that you’ve had good experiences with that, both concerning shipping as well as the quality of the items. I have bought from Japanese sources a couple of times, but was dismayed by the extended, non-tracked shipping time. I guess in the future I’ll look into the extra cost for faster, tracked shipping. If it’s not exorbitant, it’s definitely worth it.

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      • I find shipping charges have a lot of variability from vendor to vendor but generally I prefer to pay for expedited shipping wherever possible. I guess I’m just too anxious to get that new pen. The only time I avoid this is with expensive purchases. Large purchases shipped through carriers like DHL and FedEx can incur customs charges. I’ve never had that issues when shipped via regular postal mail. I’m currently waiting for a pen shipped 10/14 with an estimated delivery date of 11/17. That’s a long ways off.

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        • That is a long ways off! I hate waiting that long for a fountain pen, too. But sometimes it’s unavoidable. I pre-ordered a White M605, not knowing when it would be in. So now all I can do is wait! Great pens are worth the wait, but sometimes that wait seems interminable.

          Like

      • I make sure the Japan seller ships via EMS (a.k.a., Express Mail Service or Speedpost), which is essentially an association of Postal systems, mainly in Asia that are electronically meshed globally with almost all other postal systems. Tracking occurs primarily on the Japan Post EMS web site. Here’s the link to the English version:

        www(dot)post(dot)japanpost(dot)jp/int/ems/index_en(dot)html

        Here is what Wikipedia says about EMS/Speedpost:

        SpeedPost or Speed Post is the trade name or brand name for a high-speed postal service provided by several postal companies around the world. It is Taiwan Post’s high-speed domestic postal service in Taiwan, Hongkong Post’s international courier post service (with the generic name “EMS”), India Post’s local and international postal as well as money transfer service, as well as SingPost’s local and international express and trackable postal and courier service.

        Like

  16. Great article! I really appreciate your very informative web site. I also bought most of my Pelikan pens from overseas vendors like LCDC, Cult Pens, Niche Pens. But I plan to get the white M605 pen from a US vendor since the price is now comparable. However, I still browse around for good deals. Recently I saw the M205 plain white and blue marble pens on amazon.de at approximately $60-70s USD each including shipping. I couldn’t resist so I ordered both since I enjoy the M200 & 400 sizes and I have many vintage nibs to swap them with. The only issue with amazon.de is that there’s no tracking and it takes a little longer for shipping.

    Like

    • Thanks Richard! Those are all great vendors that you list. The M205 White was my first Pelikan ever and the blue marbled is a favorite as well. Congrats on your new pens. Good luck with the wait. I know how impatient I always am for that new pen to arrive.

      Like

  17. I just looked (Christmas shopping). Pelikans are still (or again) cheaper from non-US vendors. I think Pelikan/Chartpak tried a head fake. (I had to keep the football metaphors in play!)

    Like

    • You are correct that overseas vendors are still attractively priced. We’ve only had 2 Souverän releases this year that were priced lower than prior models. I’m waiting for next year to see what pricing will do. I have heard rumors that European pricing is slated to rise in 2018 so, if it materializes, it may be a game changer.

      Like

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