Thursday, May 06, 2010

Interview With The Retailer

Cult Pens Interview

I imagine that when most collectors of anything start thinking about the origins of their collection they immediately focus on the manufacturer - be that a factory, an artisan or an artist. For most collectables there is an intermediary - a distribution and retail system - between the manufacturer and the collector. For me, as a collector of mechanical pencils, it would be pretty hard to collect pencils without distributors and retailers bringing the manufacturers products to market. Recently I started thinking about these retailers, the somewhat overlooked (and sometimes maligned) part of the collecting process.

When I first started this blog, I soon established contact with Michael, a blogger in the UK who was keen on writing instruments. Later on he got something of a dream job, a job working in the writing instruments industry, for the UK domiciled online retailer Cult Pens. So, when I started thinking about retailers and learning a little more of how they see things, I immediately thought of Cult Pens. Here then is a little Q & A Interview with Simon (the boss) of Cult Pens.

Dave - Tell us a little about the history of Cult Pens.

Simon - My wife Amanda and I used to work in IT for banks in the City of London – something we didn’t find terribly interesting or fulfilling. We left London in 2001 to ‘downshift’ and ended up buying a small stationery shop in Dartmouth, Devon, where my family live. This was something of an education, neither of us having had exposure to the world of retail, customers, suppliers, etc. before. Comments from customers sparked the idea of a website selling hard-to-find office pens. After a lengthy gestation this finally kicked off in December 2004, and was renamed Cult Pens in May 2005. The idea was that it would only stock the more obscure pens and pencils, but we quickly established that there was demand for almost any pen/pencil, in the way we sold it – which was singly, with good images and details and some product knowledge to back it up. The website quickly matched the shop in terms of turnover, so we sold the shop to concentrate on our online efforts, moving to spacious new premises in Mid-Devon in January 2007. We recruited pigpogm (aka Michael) at the same time, a useful chap with an ideal combination of talents in both PHP and pens. Since then we’ve added a further four staff and will be looking for another as you read this. We’ve grown rapidly but ‘organically’ over the last few years and managing that growth is a constant challenge as any business owner will know.

Dave - Do you have some overall philosophy or overriding principle guiding your development? What’s your goal with Cult Pens?

Simon - Our aim is to offer an unprecedented range of products; to make that range easily accessible to both private and business customers; to operate a simple, fair and friendly service; and to back all this up with an excellent level of product knowledge and customer service.

Our goal is simply to operate the best writing instrument ecommerce business in the UK.

Dave - What stage of the growth cycle do you think the online market for stationery is at?

Simon - I can’t really speak for the industry as a whole – we operate very much in a niche. The online market for stationery generally is dominated by the likes of Staples etc. There’s been quite a turf war in the last few years as the commercial operators try to gain market share; and for the majority of buyers in that market, it’s mostly about price. We offer specialist products, knowledge and services and address a different market.

Dave - Your website mentions a total of seven ‘free-range environmentally friendly’ staff members. Now, if that was a bricks-and-mortar store, seven (caged and genetically enhanced?) employees would be a rather substantial writing instruments shop. Can you give us some idea of business activity?

Simon - We continue to grow rapidly, and although I can’t disclose turnover figures, in the financial year which just ended in March 2010 we grew by around 45% and shipped nearly 50,000 orders.

Dave - Do you do a lot of business outside of the UK?

Simon - We send a fair amount overseas – in fact we seem to have delivered to virtually every country on the map at some point. It’s quite an overhead and there are some interesting challenges in dealing outside the UK, so sometimes we think we should just stick to the UK! Volumes also depend on the state of the currency markets – as the pound moves against the dollar, yen and euro so we see shifts in buying patterns. The US and the European euro-zone are the most active markets – as you would probably expect.

Dave - On your website you state, “Sometime we think we should be called Cult Mechanical Pencils. We have more types of mechanical pencil on sale than anywhere else we know of…”. How important are mechanical pencil sales to you?

Simon - Pencil sales are very important – there’s such a fantastic range of product available, and the UK market has never been that interested in them compared to other countries, so customers are glad to find our extensive range. We can’t extract a percentage sales figure for them, but it’s certainly a significant amount by volume, balanced by the fact that most are at the low end and there’s little interest in the most expensive items (eg. the mechanical pencil to match your Pelikan Souveran M800).

Dave - There’s a huge range of mechanical pencils available, but what’s hot and what’s not is another matter. Tell us a little about what really sells. What sort of price range is the most popular? What’s the sort of sales ratio of general writing pencils to technical style draughting pencils. How well do multi-pens (with a pencil insert!) sell? Do you note any preferences for particular features like rubber grips, extendable erasers, etc?

Simon - Interest comes and goes quite quickly and as a niche operator we rarely see volume sales in any one item. Uni’s Kuru Toga has rightly been very popular, but that’s already slowed as the customers dying to get their hands on it have now got one!

As you might expect the cheaper end is the most popular, and one of the great things about mechanical pencils from the major manufacturers is that even the cheapest is easily, economically and endlessly refillable and can last for years. General-purpose pencils greatly outnumber drafting types in variety and sales, but the drafting pencils are still very popular. Multi-pens are very much a niche product and don’t seem to be as popular as we think they should be. The Zebra Sharbo X range with it’s completely custom approach and it’s unprecedented choice of 0.3, 0.5 or 0.7mm pencil mechanisms is an interesting new direction in this category and we’re trialling it for the first time in the UK right now.

Dave - Is there much demand for leadholders that take really thick leads, e.g. 5.6mm leads?

Simon - Again, a niche product. Popular with designers but the sort of thing that a high street shop would struggle to sell any of, and only the internet can sensibly make available.

Dave - What’s the breakdown of sales of mechanical pencils by lead size?

Simon - For the 14 pencil ranges that offer the four main lead sizes, sales are:
Percentage sales volume by pencil size
0.3mm = 16%
0.5mm = 41%
0.7mm = 27%
0.9mm = 17%

Dave - What’s the breakdown of lead refill sales by size and hardness?

Simon - For our four lead ranges with all four sizes available and a wide range of grades, i.e.
Pentel AIN, Pentel Super Hi-Polymer, Pilot ENO and Faber-Castell Super Polymer.

Percentage sales volume by size
0.3mm = 13.0%
0.5mm = 47.8%
0.7mm = 30.4%
0.9mm = 8.7%

And percentage sales volume by grade
6H  = 0.1%
4H  = 2.6%
3H  = 1.7%
2H  = 5.1%
H    = 4.7%
F     = 0.7%
HB  = 46.0%
B    = 15.7%
2B  = 18.4%
3B  = 1.4%
4B  = 3.6%

There are a number of lead refill brands we additionally stock that are available in only one or two grades or sizes – generally HB/0.5.

Dave - There seems a definite move by pencil companies to produce “first writer” type pencils for children learning to write. Do you see any substantial sales in this niche, or is not really your market?

Simon - The four major German manufacturers in this market – Stabilo, Pelikan, Faber-Castell and Staedtler – seem to continually vie with and/or copy each other in this product segment. It’s a huge area in Germany but barely registers in the UK, though they’re not really marketed heavily here. When they have been – Stabilo advertised their ‘Easy’ range on TV a couple of times – they go very well.

However, these products are usually premium-priced and especially at the moment a lot of families will struggle to justify the expense.

Dave - If you were asked to describe your typical customer, who are they?

Simon - Our typical customer is someone who is very particular about the pens and pencils they use, but apart from that they can be anyone from a pensioner at home to a large corporate, by way of professional and hobbyist users. We don’t profile our customers in any detail – I personally dislike retail websites that require registration and ask too many personal details, so we don’t.

Dave - Obviously the popularity of brands comes and goes as they introduce new models, launch advertising campaigns, etc. Which brand(s) do you think is the market leader at the moment?

Simon - You don’t see major advertising very often in the writing instrument category – there’s no longer the budget for it. In overall terms I would expect Pentel, BIC and Paper Mate to lead the European market in mechanical pencils – they have the widest ranges and many of the most popular models. In commercial terms, the cheaper pencils are generally the market leaders!

However, in the world in which we operate, Pentel are very strong, but Paper Mate and BIC are of little or no interest. Pilot and Zebra have reduced their offerings in Europe recently. Staedtler have been more active than most recently and have introduced quite a lot of new items. The market leader in terms of interest to pencil aficionados seems to be Uni, with their Kuru Toga technology and Nano Dia lead – the first real innovations in this category for a long time.

Dave - In the ideal marketplace of economic textbooks, I imagine one role of the retailer is as a two-way information conduit between manufacturer and end-user. Do you see yourself as fulfilling that sort of role?

Simon - This is quite interesting and one of our biggest challenges. As I mentioned, our customers are rather particular about their pens/pencils and a large part of our job is to be as particular as they are. This means that we have to take seriously all kinds of queries, complaints or comments about the minutiae of product features or specification changes. The difficulty is getting the manufacturers to take these things seriously! Most of the brands we deal with are represented in the UK by either local offices belonging to the manufacturer or by sole distributors. It’s fair to say that few if any of the staff working for these local offices are as obsessed about the products as we have to be. We often have to hassle them about the finer points of low-volume products which they view as entirely unimportant to their main business, which will usually be a handful of best-selling ballpoints and gel pens. It can be very difficult getting answers on this sort of thing.

We only stock reputable brands and take the brand values very seriously. We try and act as representatives for these brands on behalf of the manufacturers. We are often mistaken for the manufacturer themselves and receive emails complaining bitterly about pens bought for example, from an office supplies chain in America! On behalf of the manufacturer, we respond politely and point them back to the relevant retailer, like Staples, or the manufacturer.

Dave - Simon, thanks for taking the time to participate in this interview. Best of luck for the future of Cult Pens.

Disclaimer: Some might feel this interview is some sort of free advertorial for Cult Pens. I won’t actually disagree with you, but in my mind that doesn’t make it an inappropriate article for this blog. You could view this whole blog as a free advertorial for the mechanical pencil industry! For the record, I have no ties or commercial relationship with Cult Pens.


Henrik said...

Thank you for the time and effort. It was a good read – well done. As one of the particular pencil people I think it was nice to know some more about Cult pens. Retailers like that deserve some free advertisement. :-)
Regards Henrik

Time Waster said...

Great interview it's good to see non e-commerence sites
up and running.

B2-kun said...

Great informative interview. I often visit their website for useful background information on hard to find mechanical pencils and pens.

Atticus said...

Fantastic Stuff!

My Supply Room said...

Good job and great interview.

Anonymous said...

Thanks, that was a very interesting read, as I've ordered quite a few pens from Cultpens. Nice to know some more about them. They have the fastest shipping department ever! Every time I've ordered, I've received shipping confirmation within a couple of hours.

And let's hear it for the Sharbo X! It's a magnificient pen(cil).

Anonymous said...

CultPens looks awesome and I have used it many times to explore the pencils available - however their international shipping cost is too high for small purchases. 10GBP is an awful lot to ship a few cheap (but unfortunately hard to find) mechanical pencils.

I'd be happy to take my chances with unregistered post. I already end up doing that with evilbay in addition to the risk of getting fakes.

memm said...

Great interview. As a repeat customers from them I am happy to now know a bit more about them.

Anonymous said...

Anonymous said: "I'd be happy to take my chances with unregistered post. I already end up doing that with evilbay.....".

For that exact reason, I no longer sell items on evilBay unless it's with insurance and tracking numbers tacked on to the shipping cost. PayPal tends to treat sellers like criminals when they get a claim for "non-receipt" of goods filed against them. So sellers need the protection!

Anonymous said...

I got my Lamy CP1 MP from Cult among other orders. Yes £10 is expensive for shipping and has more than once stopped me ordering from them. Same with jetpens USd20+.
Cult's range is fantastic though and they should be commended for their efforts.

Anonymous said...

We all have our own ideas about the best lead size and grade so interesting to see what really sells. I guess Cult Pens information is indicative of (Western) people who take their writing seriously, but maybe including the mass school and office market would alter things. I think 0.7mm might pick up share - there's a lot of BICs out there. Probably 0.3mm would increase over in Asia.

Anonymous said...

Agreed on the shipping. I think they have shaved off a pound or two atleast towards me within the EU, but it is still too much for a 10-30 pound order which is not something far fetched at all. Cultpens response was that it is a lot for a odd pen or so but not for bigger orders, so I dont think they'll change that any time soon. But who knows! Glad that they thrive, fascinating that there are enough enthusiasts out there.

Pamberjack said...

Nice work, Dave. A great read.

Stephen said...

Apparently when the Telegraph asks, Cult Pens can disclose turnover figures. (Also a good read.)

I love their website's easy navigation and broad array of products. Their knowledgeable staff are great. But tossing $150 of pencils loose in a bubble wrap envelope is a practice that must be improved. They need to wrap items individually to avoid scratching and breakage.