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Comment by djrogers | Hacker News Reader

> Today, the waiting list for Mr Deshmukh's pens stretches up to nearly two years. The 10 models come in a range of colours and cost between $70-$160

and

> "The last time I looked at his online list, it said my order would be ready in 95 weeks," the Indian-born author, most recently, of Gun Island, told me.

Seems like a pretty big failure on pricing here... Raising prices to reduce wait times will generally make for happier customers and more money. Low prices and scarcity lead to secondary markets and unhappy customers.

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Maybe he wants to ensure those who love his pens can get them for a reasonable price? There's a democratic quality to waiting. Maximizing profit is only one way to run a business.

How will he avoid the secondary market if that his objective? He will be indirectly exploited and 90% of the earnings will be passed to add-nothing intermediates.

Most people on the waiting list for that long are not going to be buying to flip it. It's not like sneaker flash sales which are copped by bots.

He gets the good will of reasonable prices while keeping the prestige of long wait times, so from a brand perspective, he's still doing well. He can't prevent scalpers right now. But even if he sold to maximize profits today, people in the future, even in his lifetime, can make super profits off even higher prices. This happens to artists whose earlier work sell for millions, while they see no benefit from those sales, except high prices for newly-produced art.

Perhaps the pen maker could raise prices and offer a discount for personalization.

Ha that's smart but I could see that getting taken advantage of.

Let's see what my friend N. Vidia has to say about this.

> There's a democratic quality to waiting

What does that supposed to even mean ? There is no virtue in needlessly waiting for something in a line. Assigning virtue to such inefficiency is dangerous.

I am pretty sure people who are buying his pens would find their time lot more valuable (2 years in this case) than more price.

The buyer is willing to wait. The buyer is waiting because he likes the pen and don't mind the wait.

btw, why is this dangerous?

Buyers do not have a choice. It is either wait or don't buy. However if you create an auction system, you would know how much these people are willing to wait.

> why is this dangerous?

Economic inefficiencies lead to wastage. In this case people might put themselves on waiting list only to buy them for $150 and then sell it to someone for $500. The democratic virtue here is thrown out of the window and you have needlessly now employed a middleman who adds no real value to the process but as a remedy to the virtue signaling of the manufacturer.

Reminds of all bad things that happened when US government tried to subsidize baby formula.

what inefficiency and why is it dangerous?

If you have an item to sell and if people are willing to pay for it more than the price, if you do not increase the price someone buys it cheap and simply sells it to the highest bidder making a profit.

This is a bit like low cost government subsidized housing in bay area. Joe gets it but then rents to Kumar and continue to live as homeless. Now you have subsidized Kumar. It is dangerous in a sense, it assigns virtue to bad economic sense, creates incentives for needless middleman and prevents goods from going to people who really need it.

Maximizing profit is not always the best way to go. Especially in the realm of luxury items. Their elasticity is counter-intuitive with regards to the general idea of supply and demand.

That's why you have waiting lists in many luxury industries (think about Tesla too). It's part of the trade.

> Maximizing profit is not always the best way to go.

My comment was not advocating for 'maximizing profit' - secondary markets do not make for happy customers, nor do excessively long wait times. Yes - a waiting list can be part of a luxury good, but there's probably an optimization of customer happiness somewhere shorter than a 2 year wait list.

A wait list that excessive can spur a secondary market, which makes the wit list even longer, which makes customers and potential customers that much less happy. And the secondary market only enriches the middle-man, while doing nothing for your loyal fans and customers.

> Especially in the realm of luxury items.

Especially for luxury items, it makes sense to keep the price pretty high and supply limited (like Ferrari).

I am from India and $150 is pretty low for the market he is targetting. For example I routinely purchases Moleskin notebooks for around $30 in India and this was not even a rare item. A doctor, a judge can easily afford to pay $500 for these pens.

>For example I routinely purchases Moleskin notebooks for around $30 in India

Do you use fountain pens? Moleskin notebooks are amongst the worst paper I have ever used for a fountain pen. Even the finest points I have bleed an absurd amount.

Oh no. Moleskins are pretty bad for fountain pens. I use rollerball jel pens mostly.

Most of the custom pen makers I've tried to contact lately had multiple year wait lists. A few years ago it seemed like you could get one made in a a few months. US makers charge $200-500 for fairly standard custom pens and for more specialized stuff the prices can get even higher. The wait lists are still long. Personally as a person with a collection of vintage pens worth several thousand dollars, I wouldn't pay much more than $500 for a new custom fountain pen unless it had a lot of gold or silver hardware / overlay.

I have a couple of custom pens. One was about $500, used a rare celluloid material no longer in production, and had sterling silver hardware and an 18k nib. The other one was just as well crafted, but only cost about $225 because it was from someone relatively new to the market and it had steel hardware.

I'm sure someone would pay more if the prices went up significantly, but I would either just buy a vintage pen that writes better anyways or I would stop collecting.

Also, so far there doesn't seem to be a secondary market for scalping people with custom pens.

I dabble in woodworking/woodcarving too though, and there's a lot of people flipping custom carving knives for 3-6x what the makers charge. Its a pretty obnoxious practice.

This.

This is why I feel modern economic machine has failed us. An artisan is making something and selling at a price they are happy to get as wage. And external people have to now think* how the artisan should be raising prices to make more money.

There is no pricing failure. Someone is happy creating their version of art and selling it to run their life and family. They have enough customers to keep working for the next many years. Full stop.

Once he starts raising the prices more he starts competing with european and japanese high end fountain pen makers and then his quality proposition is a more common characteristic.

You're mistaking the market with other firms for a pricing failure of this firm.

Assuming his business makes enough money to satisfy his needs - there is no personal need to raise prices. Not everything follows a model of optimizing pricing to have a business that "functions better" in some abstract economics sense.

There is satisfaction in receiving fair wages for your work. At some price point, it feels like overcharging, even if customers are willing to pay that, and not everybody wants to go down that route. There is satisfaction in working with somebody like that, or buying from them, even if it takes longer.

Not everything needs to follow some moralistic purity test either. Just sell the damn thing at the market clearing price and let other people wring their hands about fairness of the pricing for these luxury pens. Most people do not need to redeem themselves or assess their self-worth via the pricing of luxury goods.

Besides, who gets to decide what a “fair wage” for your work is? If people are willing to pay more for your pens, I say charging them what they’re willing to pay is still pretty fair of you.

You're aware that they set a price that they're comfortable with, yes? They chose not to set a market clearing price. It's not about a "purity" test. It's what they choose to do.

It's amazing how uncomfortable people get if there are examples of people not wringing every last ounce of profit out of something.

Please read the post that I was responding to, which insisted on framing everything in terms of some weird definition of luxury-price morality. It's strange how much of a raw nerve is touched when you point out the absurdity of people's various moral crusades.

In terms of why the actual vendor is or is not raising prices, I have no idea, neither is it important. I was making a counter argument, not lobbying the vendor. They could charge a million dollars or one dollar for their handcrafted pens and there would be zero moral difference between these two prices.

> Ghosh is willing to wait for his pen to arrive from the maker

I'm a bit flabbergasted how you'd think that a customer willing to wait 95 weeks for a product is proof of a pricing failure. It's proof that price is not a factor.

The implication is that increasing prices might balance supply and demand better and/or increase profit for the manufacturer.

But the manufacturer is turning a profit and the customer is satisfied. Why fix what ain't broke?

Capitalism is so wonky.

I imagine he would make out really well with a limited quantity, sky-high priced, "expedite an existing order" button. And it's not too late for that. A small portion of the upcharge would easily fund a lesser skilled helper for non-critical/lesser-skilled tasks, so that existing orders weren't delayed.

https://www.becomingminimalist.com/recognizing-happiness/

Sure, though it wasn't a suggestion he had to do that. Just that an opportunity was there. Also, I just noticed on his website that he is already looking to hire some help: http://fosforpen.blogspot.com/2021/02/i-am-hiring.html

I was just trying to be funny :) Didn't really pull it off, I guess.

Ah, friendly jabs are uncommon here, so perhaps it's my sense of humor and not yours.

I read the fabulous "Clapton's Guitar" a few years back and I think a lot of the fun of it is that not everyone follows the economically logical rule of adjusting the prices like that.

Surprisingly accurate. There are dozens of custom fountain pen makers online now, but the wait times only increase from what they used to be a few years ago.

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