Editing The Pen Addict 233/transcript (section)

== Gray Market ==


'''Brad Dowdy:''' And the question of the gray market came up as it relates to shopping for pens. So, you know, my initial response is, yes, I have thoughts on this. But also that the gray market, I think by definition is in the pen world is hard to define what falls in the gray market. But by real definition, you know, according to Wikipedia, you know, bastion of all that is good and truthful on the internet. The definition is pretty clear. It's the trade of a commodity through distribution channels that are legal but unintended by the original manufacturer. I think that plays well with a company like Massdrop. Okay. So this is where my gray market radar goes up. And I have some issues.

'''Brad Dowdy:''' Massdrop's not doing anything illegal whatsoever.

'''Brad Dowdy:''' So it falls into that category of the gray market for some of their pen products. So this is referring to how they get in a major brand, say Lamy, Pelican. They just recently had a diplomat sale. And they sell pens for prices that U.S. retailers, and I'm just saying U.S. retailers because that's what I'm most familiar with in Massdrop's a U.S. company. They are not legally allowed to compete with. By the sales agreements that they sign with Lamy, Pelican, and Diplomat. There's only so much these retailers can discount. Massdrop goes through different markets to acquire certain numbers of pens.

'''Brad Dowdy:''' Like, for example, Pelican says they don't deal directly with Massdrop. Somehow Massdrop is getting the quantities they have to be able to sell these at a very, very cheap price. Cheaper than you can get them from any of the U.S. pen companies that we all shop with.

'''Myke Hurley:''' So where are they coming from?

'''Brad Dowdy:''' No one knows. That's the biggest question. Retailers, I obviously have a massive issue with this. And I have a massive issue with this. Because the retailers are not allowed to compete with that by sales agreements that they sign. Massdrop goes around that by not dealing directly with the brands. Is able to get the quantities they need.

'''Myke Hurley:''' Could they be using a retailer? Like, there is a retailer that is kind of feeding them? Absolutely. I mean, it's got to be, right? Like, to get them in retailer quantities. Not from this distributor or supplier. Then there's got to be a hole somewhere.

'''Brad Dowdy:''' Right. So this brings up kind of two questions for me. You know, number one, who am I to tell someone else to not buy Alami 2000 for $100?

'''Myke Hurley:''' I agree.

'''Brad Dowdy:''' Right? Who am I to say, no, you should not go purchase that wonderful deal on Alami 2000? Perfectly legally. Perfectly legally. Perfectly fine. On the other hand, it's damaging my friends to a degree. Now, not everyone on Massdrop would have necessarily been a customer of Pen Chalet, Goulet, Van Ness, Anderson's Jetpens, Gold Spot. All of our friends in the industry. And I call them friends because I talk to them about this all the time. They will lose their product line if they discount on the level that Massdrop does. They will get pulled.

'''Myke Hurley:''' So you mean that, like, Alami would say, you're not allowed to sell our products for that cheap. You're no longer a store that we work with.

'''Brad Dowdy:''' You're no longer an authorized Alami dealer. Right. Please remove all your products from the site. You've broken our sales agreement. It doesn't apply to Massdrop because they're not dealing directly with those companies. Like a backdoor. So while I don't purchase the Alamis and Pelicans from them or the Diplomats, you know, because it's actually taking money away from my friends. And it's taking away, you know, sales from a market I want to support and I want to thrive that I'm in the business of myself. Right.

'''Myke Hurley:''' Mm-hmm.

'''Brad Dowdy:''' So I hate seeing that when you have those type of deals. Now, one thing Massdrop does on the positive side, I don't want to kill them completely. Again, gray market. It's legal. Right. It's just unintended. But one thing Massdrop does do is they will launch Massdrop only products. Like they will work with manufacturers, create a product that's a Massdrop exclusive and then sell them. Franklin Kristoff has done it. Karis Customs has done it. I think that's where I bought my first EDK. They launched it through Massdrop. That's great. They're working to promote companies within our industry. You know, working directly with the companies for the product, doing something exclusive. So it's just when you see things like the Lamy 2000, the Pelican 405. They've had Pelican 1000s before. They actually sent me one to review. You know, Diplomat Arrows. Things like that. When you see them for prices that severely undercut my friends, it upsets me. So I take that a little bit personally. But when they do other cool things where they are actually building something unique and fun and, hey, it's Massdrop only, that's great.

'''Myke Hurley:''' But that was advocate, though, right? If they can do this, why wouldn't they do this? Like, if someone is willing to sell it to them, then, like, they're not stealing them.

'''Brad Dowdy:''' Mm-hmm. So it's the trade of a commodity through distribution channels that are legal but unintended by the original manufacturer. Okay. Yeah. Why shouldn't they? That doesn't mean I have to agree with it. Sure. But they're also not doing anything illegal. They're giving people a bad look and a bad name. They're making their name a curse word to some of these retailers. And is that the type of business you want to run? I mean, that's up to you.

'''Brad Dowdy:''' For me, I wouldn't be comfortable doing that. So, and there's a second part, which I don't think is quite as big a deal as the Massdrop thing. And that's essentially Japanese arbitrage. Where you can buy the same pin on the Japanese market for quite a bit lower than the American market because of all kinds of import fees, duties, taxes, and things that go on to add on to the price for American retailers to carry it. Now, I've certainly bought things on the Japanese market that were cheaper, but they were all, I'm trying to think of any that were available on the U.S. market. I think everything I've bought wasn't available. I bought my A23 from Japan because Pilot chooses not to sell the color I wanted in the U.S. So, that's an issue. Like, why doesn't Pilot give everybody everything? And then I would spend, I think, like $40 more at a U.S. retailer than having to go to Japan.

'''Brad Dowdy:''' The same thing happened in the U.K. You'll remember that white, the Stormtrooper Vanishing Point I bought from Colt Pens. You know, and I paid a premium for that because no one else carried it. Well, now, two years later, well, pilots decided to carry it in the U.S. Well, these U.S. vendors lost that purchase from me, even though I'm glad to support Colt Pens. You get my point, though. Yeah.

'''Brad Dowdy:''' I don't have quite as big an issue with this.

'''Brad Dowdy:''' It's basically an arbitrage decision. You're able to play one vendor against another, use the advantages of geographic location to help you find something cheaper. However, you know, there are reasons why it's cheaper. The, like I was saying, you know, all the import duties, taxes, shipping, all that has to be built into the product when it comes to the U.S. So, that's a harder one. You know, if I could find the same pin for the U.S. And as the Japanese pin and the same pin in the U.S., and the U.S. pin was more expensive and it was from one of the retailers that I normally use, I would easily buy it from the U.S. retailer. Like, it's not a question for me.

'''Brad Dowdy:''' I've gone to Japan when I can't find what I want, even though I feel that I should with U.S. retailers. So, you know, I don't have, it, Pilot's getting a little bit better. They brought over the 912 line, but they don't bring over the PO nib. The PO nib's the one I use, right? Yeah. They have the 823 in amber. They don't have the 823 in clear, which is what I use. Maybe eventually they'll start, at least give everyone an even playing field from product selection. You're not going to be able to ever give them an even playing field for price, but I certainly would have supported my geographic location retailers as opposed to someone else's geographic location retailers because that's the community that's more important to me.

'''Myke Hurley:''' This is tough.

'''Brad Dowdy:''' It is. It's not, like, I was saying, I was replying in Slack that this is not an easy answer. I mean, it's called gray for a reason. Like, it's the total gray area. And there's, and like I said about the mass drop thing, who am I to say, don't buy a Lamy 2000 for $100? Right. I mean, good grief. What are you supposed to do, right? So, we each have to make our own decisions as far as that goes.

'''Myke Hurley:''' And also, you know, like, it struggles because, like, you know, you're saying, like, it affects people, like, it affects their businesses. But these purchases affect our own wallets as well, right? Right. And if you're able to get the thing that you're really keen to get and you can get it for cheaper, as you say, like, who are you to say to someone, no, think of the Andersons instead and pay more money? Right. Like, it's difficult. It's a really difficult thing to try and balance for that reason.

'''Brad Dowdy:''' Yeah, it's hard. It is. It's very difficult. There is definitely no black and white in the gray market.

'''Brad Dowdy:''' I just came up with that.

'''Myke Hurley:''' That was pretty good. Very good. Very good.

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'''Brad Dowdy:''' It's weird.

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'''Brad Dowdy:''' You know, their colors are so amazing. I actually didn't pick an orange bag. Like, how good is that? Wow. Yeah. Like, my aeronaut that I use to travel with is actually navy blue because I can get that sweet wasabi green check on the inside. I was like, oh, that is just too good. Yeah, that's good. That is good. Tom Bin, you know, I've found on them before. I look up to and respect that company. As a soft goods manufacturer, they're the one I hold in the highest regard. They're the top of the mountain, best of the best. Absolutely love Tom Bin. Everything they do is gold and the quality is, it's unbeatable. It really is. So, definitely check them out this holiday season. It's perfect for you or perfect for a gift.

'''Myke Hurley:''' All right. Should we do some last TPA to round out today's show?

'''Brad Dowdy:''' Yes, we should. So, we've been slacking a little bit on our Twitter Ask TPA. So, I rounded up a few of those questions. They might be a few weeks old for some of you that have sent those in and we've missed them. Hopefully, I'm going to catch some up right now. And this first one is a good one for you, Myke. Well, Myke, this is from Sebastian Morissette. He says, will Myke be getting a fountain pen themed tattoo? If so, will it be before or after getting a wrestling themed one? How about Brad?

'''Myke Hurley:''' I have no tattoos in mind that are either of these themes and I can't imagine doing that. I do have one tattoo in mind and it's based on a comic book character. It's a Scott Pilgrim themed tattoo. It's what I have in my mind. It's one of my favorite comics. It's one of my favorite movies. And I have an idea there. A very basic tattoo. I have no plans to get either a fountain pen or anything wrestling related tattooed on my body. Especially, I would never ever get anything wrestling related tattooed on me. I love it. It's one of my favorite forms of entertainment. But mainly because it just moves so quickly and things change so much. Like, it wouldn't last. It wouldn't spend the rest of time.

'''Brad Dowdy:''' Yeah, so I have had like a fountain pen themed tattoo idea for years. And I just haven't pulled the trigger yet. I want to get it done. I've gone as far as like really talking to the tattoo artist. Yeah. But I haven't like totally laid it out. What kind of design are you looking at? Well, I mean, I don't really want to share that necessarily.

'''Myke Hurley:''' I just kind of.

'''Brad Dowdy:''' You gave it something secret. Yeah, yeah, yeah. Well, because I may never do it. Even though I actually want to do it. You know, I actually have two designs I would like for two different areas of the body. So, yeah. I will. I have no tattoos. I have a feeling I will end up with. The problem is I am definitely going to go down a path if I get one.

'''Myke Hurley:''' Well, this is my problem now. Right? Like I now really want another one. And it's probably just going to keep going forever.

'''Brad Dowdy:''' Yeah.

'''Brad Dowdy:''' Yeah. So, you know, I have ideas. I've sketched them out.

'''Brad Dowdy:''' You know, and I've kind of want to do it. So hopefully I will do it one day. So we'll see. All right. So turnip princess or yeah, that's a pretty cool name. Can either you take a jab at which golden ink Santa would be using? He has a very diverse ink cabinet. So I have no clue. So. I.

'''Brad Dowdy:''' It's got to be a sparkle ink, right?

'''Myke Hurley:''' We both went sparkle.