Looking around our community, it’s striking how much of the discussion is centred around modern pens. It’s almost as if the vintage end of the market is an entirely separate hobby, something which overlaps our interests but isn’t worth exploring for most people. This is despite the fact that there are some pretty phenomenal vintage pens available at much lower prices than their modern equivalents. In today’s post, I’ll have a look at why this is and how it could change.

This topic first came to mind when I was thinking about pens to recommend to beginners. Most bloggers have a list of five beginner pens which they feel are good value, but I worry sometimes those lists are more about the five best pens which could be your very first one. My feeling is that the first five you buy should offer you a nice range of experiences so you can help to figure out what suits you: long/short pens, thick/thin sections or barrels, East/West nibs. And those lists should probably include a vintage pen as well.

A good example of why a vintage pen should be included is the Parker 45. These things are basically ubiquitous on eBay (including outside the US, unlike Esterbrook) and they are seriously cheap. You can pick up a decent P45 for less than a Twsbi Eco, which places them within the right price range for starter pens. For that money, you get an interesting pen with a great design, history, and a solid nib.

But aside from the occasional recommendation on reddit, it’s rare to see a P45 recommended to new users. It’s also rare to see the P45’s big brother, the Parker 51, recommended as a first gold-nibbed pen, despite the fact these often go cheaper than a new Pilot VP or Lamy 2000. These Parkers, and their equivalents from across the other vintage brands, only seem to appear as recommendations when there’s a specific request for vintage pens.

We could put this down to two things: either we’re all behaving irrationally and missing an opportunity to own some sweet pens for low prices or there’s something else going on, something which is making these pens less desirable than they might first appear. You won’t be surprised to learn that I still think people are mostly rational, and so lean towards the latter explanation. It seems to me that there are obstacles which stand in the way of the vintage market, and my hope is that better understanding of these obstacles might help us to eliminate them. That could help the vintage market to grow and for users to have richer experiences.

Transaction Costs

Let’s go back to my model of the purchase decision. In it’s most simple form, we will buy a product whenever the value we get from it exceeds the price. I’ve talked before about how retailers can influence both price and value and now I want to explore another factor that influences our decision: transaction costs.

These are the costs which are incurred by buyers when we make a transaction. The most obvious costs are payment fees, shipping costs, import duties, etc. If you value a Lamy 2000 at $160 and someone is selling for $140, you’re likely to buy it. But if shipping and import costs push up the effective price to $170, it’s no longer worthwhile. That purchase doesn’t get made because of the transaction costs.

Those examples are explicit costs, actual expenses which you would need to pay out to get the pen. Transaction costs are more typically implicit: costs that doesn’t involve any expenditure but nonetheless disadvantages you in some way. Think about buying a car and all of the time and stress that goes into negotiating a price. That’s a cost you have to bear as a car buyer in addition to the purchase price. If the negotiation cost is too high — if the negotiations take too long or end up being too stressful — you might decide that the purchase isn’t worthwhile. That was my experience when I tried to buy a new VW last year: the salespeople were too clever by half and made the whole thing unnecessarily painful. I ended up buying something else entirely.

The same goes for the costs spent gathering information: learning about the different vintage pen brands and products which are available, the dealers, the quality, restoration, and trying to determine if the pen is suitable for you. All of that time and effort is a cost and it can be a huge burden, to the point where you might decide that it’s simply not worth all the effort — even if the sticker price makes it appear worthwhile.

There’s a third type of implicit cost, which is risk. I’ve previously talked about risk in the context of modern pens but it’s a much bigger deal in vintage. The risks are greater: you aren’t just worried about how reliable a particular retailer is or whether the product will suit you, but also whether the pen been properly maintained or restored, or simply whether it will write properly. All of that influences the value we derive from a purchase. Maybe a mint Parker Vacumatic is worth $200 to you, but if we’re 50/50 about whether a particular seller is competent or honest, we won’t be willing to pay more them than $100 (50% of our $200 valuation). If you’re naturally risk-averse, as with many new entrants to the hobby, that discount rate will be even more extreme.

So even though a $30 Parker 45 might seem like a great deal at face value, the transaction costs could make it a lot less appealing to potential buyers. They will naturally stick to the pens where those costs are lower: where information is more easily available; where buying routines are more familiar and negotiations are easier; and where the risk is minimised. And that means modern pens. I suspect transaction costs are the main reason why our community, and new users in particular, are much more focussed on modern pens.

Interestingly, these costs aren’t the same to all buyers. Some people are good researchers, or they already have a good knowledge of the product range, the sellers, and the prices, so for these people, information costs will be much lower than others. Some people have good relationships with the dealers, know all about their reputations, and understand the way that transactions are usually handled. For those people, negotiation costs will be lower. And some people are simply less risk-averse than others. If you’re not worried about risk (like a certain, poker-loving Filipino writer and pen addict), you won’t have to discount potential purchases as sharply. All of that makes it possible to indulge in transactions which others will hesitate or avoid, so it’s not surprising that collectors tend to exhibit all of these traits.

The Future of Vintage

By understanding transaction costs in the vintage market, we can understand buyer behaviour a little better. Given the number of beautiful, unique, and cheap vintage pens that are available — not to mention the number of vintage flex nibs — it’s hard to believe that people aren’t interested in vintage. If people are interested and prices are low, my feeling is that transaction costs are the only obstacle to growing that market. And I don’t believe it’s an obstacle which will stand forever.

We can understand part of how the vintage market will change in the future by looking at each of the transaction costs and how they are changing or could change.

If we start by thinking about information costs, it’s surprising to me that there hasn’t been more change here already. For most of the standard vintage brands — Esterbrook, Parker, Sheaffer, etc — quite a lot of product information is already available online and there are a few comprehensive books available. But the information isn’t well organised or easily available, particularly for someone keen on making a quick purchase and doesn’t want to spend hours sifting through forum posts. It’s probably inevitable that we’ll see some blogs and other sites start to emerge that have a real vintage focus. They will start to organise a lot of this information in a way that is interesting for regular readers and convenient for those looking for quick facts. It wouldn’t surprise me if a podcast or Youtube channel popped up on the same topic.

Another change that seems inevitable is that the vintage pen dealers will, sooner or later, realise that the internet exists and that there are opportunities waiting to be exploited. I like to think of myself as fairly knowledgeable about the FP retailers around the world, particularly online, but even I struggle to name more than a few who specialise in vintage. Many of those who are online only have a handful of products on their sites, and the sites themselves have all the charm, beauty, and welcome of a Soviet prison camp. It wouldn’t surprise me if a couple of vintage retailers put a real effort into establishing their businesses online and on social media, and ended up dominating the market in the same way as Goulet Pens effectively dominates the online US market for modern pens.

Greater accessibility of product and retailer information is going to have a huge effect in reducing information costs, will bring many more buyers into the vintage market, and help to grow it well beyond what it is today. It’s unclear when this will happen but my hope is that change is on the way.

Reducing negotiation costs will also be important but, unlike the information costs, I think the shift here is already well underway. It’s interesting that most casual pen folk aren’t able to name many vintage retailers but many are nonetheless aware of who to avoid. (Specifically: Greg Minuskin. See here and here for details.) As more users join social media and share their experiences, reputation will become increasingly important for vintage dealers. Those with strong reputations will find themselves rewarded, while those who are rude or obnoxious will find it harder for them to maintain their business. Buyers can only benefit from this.

There have been plenty of pen show stories over the last few years about vintage dealers being reluctant to deal with newer users, some of them being outright rude. But the anecdotes I’ve heard from recent shows suggest that some dealers are starting to see the opportunity of engaging with a large group of eager buyers. Instead of forcing the newer buyers to adapt to the old ways of the community, these sellers are becoming more patient and more open. They are engaging with the expectations and norms of the new community. This helps to reduce the negotiation costs faced by those buyers, enabling more transactions and building more successful businesses.

Finally, there’s the issue of risk. This is probably the hardest factor to reduce as risk aversion is an intensely personal and subjective thing. Some people are simply comfortable with risk while others are not. Only the external risk can be reduced. Right now, buying a vintage pen seems a totally different experience to buying a modern pen. All of the factors I’ve discussed will help to alleviate some of that external risk, but the main thing that will help is making the process more familiar. In particular, a lot more discussion about experiences with buying and using vintage pens. By providing honest accounts, it can help to anchor people’s expectations in reality and make them more comfortable with what’s to come.

Conclusion

Personally, I think that there’s a bright future for the vintage market. I’m not sure which brands or products are going to become more popular, but I certainly expect that a lot of increased interest will go to the brands which aren’t well known right now. So we might see somewhat more Parkers and Watermans being sold but way more sales of brands that I’ve never heard of. There will be opportunities for buyers, dealers, and even speculators to get involved. The years ahead will be an exciting time to be in that market and I can’t wait to see what it brings.