Editing The Pen Addict 396/transcript (section)

== MSRPs and Retail Pricing ==


'''Myke Hurley:''' Right. I mean, that's a question in retail in general, right? So without being an economist or someone who studies the retail market completely, MSRPs just seem like this nebulous thing, right? They're listed by these manufacturers as the suggested retailing price. But that manufacturer then hands that off to a distributor. And then that distributor relays that information along with the pricing to their retailers. And usually the distributor has an agreement with the retailer based on the various manufacturers they work with, how much percentage off they can sell under the MSRP. In the fountain pen world, it's not consistent with everyone. But a lot of times, most fountain pens you see at retailers are 20% off MSRP. Right. So if the pen is $80 in the case of the Curie Doss, the retailers would sell it for $64. They get that information from the distributor and then the retailers all price it the same. Right. It's, you know, it's just like this balance thing. Right. That's how it's generally done. So what Platinum did last week, or actually just earlier this week, they notified the U.S. distributor and the U.S. distributor passed it along to the retailers that the retailers had had until Wednesday, which is the day we're recording, to adjust their prices on the site to the full 100% of MSRP, which is $80. I mean, I have no problem with pricing something at MSRP and selling it at that, but it's the lack of consistency in the messaging that is the problem here. Right. Because if you pick out, you know, our favorite sponsor, Pen Chalet, right, you go, you can go to the site and you can look up a Curie Doss and I'm not looking at maybe their prices implemented. Maybe it's not yet. I haven't looked, but you can, I've verified on other sites and that have made the change. The Platinum Curie Doss is full MSRP. The Platinum 3776s are 20% off MSRP.

'''Myke Hurley:''' What message are they sending? It sounds like Platinum is trying to stick it to me, even though they're not, right? Platinum's enforcing an MSRP, but they're not consistent in the enforcement. And that's where I start to question things.

'''Brad Dowdy:''' Right. So my question on this is, why? Why are they doing this? Now, let's not say like, oh, they're being stupid or whatever, right? Like, let's assume that they are being logical in some way, right? Why are they forcing this MSRP on retailers? Why are they making people pay full price for this pen?

'''Myke Hurley:''' I don't know because as far as I'm concerned, it doesn't change Platinum's bottom line. Right. So Platinum is sending a bill to the distributor. That doesn't change. So let's just say for pretend purposes. So the Curie Doss MSRP is $80 and they're sending a bill to the distributor for $40. Okay. Mm-hmm. Okay. And that's whatever the final price is doesn't affect what the distributor is paying for it. And then Platinum's still enforcing that on the end retailer, which I should have the most liberal abilities to price the products within the range of the corporation setting. So like, this doesn't affect Platinum's bottom line. Do they have a perception of this pen that they want to make it, you know, fixed at that certain price point? Like, is it a perception thing? Like, Platinum doesn't make more money because they're enforcing the MSRP, right?

'''Myke Hurley:''' I mean, they just don't.

'''Brad Dowdy:''' No, they don't.

'''Myke Hurley:''' So I don't know why it's important for this one pen to sell at 100% of MSRP when the rest of them sell at 80%.

'''Brad Dowdy:''' But what if this is the start of a change?

'''Myke Hurley:''' That's fine. Like, I have no problem if a company says we sell at full MSRP. That's cool.

'''Brad Dowdy:''' Yeah.

'''Myke Hurley:''' Like, you can do whatever you want. That's fine. Like, I would prefer that, right? Why should there be two prices, right? No one believes, at least in our industry, no one pays MSRP for a product, generally, right? All your Pelicans you buy, your Auroras you buy, you know, whatever. Your Platinums, your Pilots, all that stuff. No one pays that, right? So it's like this. I think it's probably just like this old school mentality and the way pricing set. And this is me just riffing on not knowing what I'm talking about. But I think it's just an old school mentality to where the manufacturers and distributors were able to, you know, have these pricing oddities to, you know, just allow for different manipulation of the prices. And I don't mean manipulation in a negative way. You know, I mean, in result, you know, when you sell something for 50% off, well, then it's 50% off the MSRP when really it's only 30% off because you were already selling the pen for 80% off and begin with, right?

'''Brad Dowdy:''' See, personally, I'm okay with this because I find the MSRP thing just, and we were talking about it last week, just at a fundamental level, just ridiculous. Right. Right. Either have a price and pay for it and charge it or don't have a, like, or just like, we'll just pick whatever price we want. Right. Mm-hmm. And so I kind of, you know, whilst I understand that this might make some things a little bit more expensive, I personally feel like standardizing around this wouldn't be the worst thing to happen. No. So, because then everybody gets more money, right? Like, it supports all of the retailers. Because, you know, like, the thing is, is like, when everyone's doing these discounts, they have to cut their own margins. Right? Yes. Like, the only person losing is the retailer. Everybody else is winning. The distributor's winning. Platinum's winning. The loser is the distributor, right, in the business sense. And then potentially the customer as well.

'''Brad Dowdy:''' So, yeah.

'''Myke Hurley:''' Well, I think this, I think it benefits, it benefits the retailer because now their decision's made for them. And in something like the Curie Doss, they're going to still sell all of them. No, that's what I mean. Yeah, yeah, yeah.

'''Brad Dowdy:''' It benefits the retailer this time. It's typically a negative by them having to, like, for example, if Pen Chalet brings the price down by 10%, then so does Anderson Pens, so does Gray Pens. Like, everyone has to follow suit. So, like, then you end up with potentially a bigger retailer that can stomach the price change more easily, bringing it down, and then everybody else has to follow, and maybe they can't afford those margins as much.

'''Myke Hurley:''' Correct.

'''Brad Dowdy:''' Right? So I feel like this is a pen now where they're going to sell out, and everyone's going to make more money out of it. Like, I actually don't think it's the worst case scenario here. Well, I don't. I don't. But it's just, but I agree with you that it is, like, a weird thing for a Platinum to have done.

'''Myke Hurley:''' It's a timing and perception and an inconsistency thing, right? Like, I just try to wrap my head around that. In the end, it's not a big deal. Like, the one that gets hurt the most is the consumer, because we're not going to get it at what we would traditionally expect for a price. But if our expectation is now, well, we should pay full MSRP, then, you know, the market will adjust accordingly.

'''Brad Dowdy:''' Yeah, and I would say as well, like, this pen is not at such a level that the change is, like, is monumental. What's it going for? $60 to $80?

'''Myke Hurley:''' Yeah, $64 to $80.

'''Brad Dowdy:''' Which I feel like, you know, if you were going to drop $60 on this pen, you can do $82, right? Would be my expectation for most people.

'''Myke Hurley:''' Yeah, I poked over in the European market, and their prices are even higher. So, like, this whole regional pricing discussion that is just, you know, boggles my mind if I try to think about it too hard. Like, at CultPens, I want to say it's around, it's over £90, I want to say. £95?

'''Brad Dowdy:''' But that's, honestly, Brad, that's what I would have expected to pay for it, though. Like, that doesn't surprise me. If it was, like, $80, $90 in America, then I expect it to be $80, $90 in the UK. Because we have our VAT and all that kind of stuff.

'''Myke Hurley:''' Right, right. All right, a couple more things on this. The biggest thing that came out of this yesterday when I was talking about it on Twitch is, like, well, people who were just holding off to wait and see now feel like they have FOMO having to buy the pen, knowing that the price is going to increase, you know, 20%, 25%, whatever that increases, and are getting FOMO'd into making these purchases. You know, that's not the worst thing in the world.

'''Brad Dowdy:''' Wait, so, you can't, is it, people, nobody's bought it yet, though, right?