For years, the Alluvial pen store in Winterhaven, Florida, has been an authorized retailer of luxury pen manufacturer Montblanc. The relationship guarantees that proprietor Trey Broswell gets a steady shipment of pricey pens backed with a warranty from the company.
So when Broswell decided three years ago to start selling over the Internet, it seemed natural to post a few Montblancs for sale on his Web site.
But that line of business came to an end this spring, when Broswell received a letter from Montblanc's North America headquarters, saying it would no longer allow its authorized retailers to sell its products over the Internet.
Although Broswell had been turning a profit selling pens on the Net, he figured he'd best take the letter seriously.
"Being a retailer, I have to go along with what they say," Broswell said. "If I disagree strongly enough, they’ll stop shipping to me."
Alluvial wasn't the only retailer to receive such a letter from Montblanc. The company said it sent the letters to all its authorized retailers, asking them to remove pictures of its products from their Web sites and to stop selling its pens online.
The move came as a surprise to many authorized retailers, a number of whom had been fairly successful selling Montblanc items online.
Montblanc North America marketing exec Eric Werner defended the action. By banning Internet sales, he said, the company is essentially trying to protect its image as a luxury brand.
"Luxury by its very nature is not ubiquitous," Werner said. "And that's why by its very nature it doesn't make sense for it to be on the Internet."
A huge part of marketing a luxury product is making sure items are sold in the proper sort of environment, Werner said. When it authorizes retailers to sell its pens, Montblanc also lays down specifications for how its products get displayed, making sure they're in a proper case and sold by trained staff.
That's a far cry from the Internet, where a picture of a fancy pen can be slopped down on some ugly Web page accompanied by nothing more than a few lines of badly worded text.
Analysts familiar with the world of luxury retailing say luxury manufacturers have reason to worry about how their goods are presented online. The last thing a posh brand name company wants is to see its stuff wind up in the bargain basement somewhere, said Jupiter Communications digital commerce analyst Mike May.
"Part of what makes a luxury brand command the large prices that it does is an implied scarcity or exclusivity of product," May said. "It's difficult to maintain that air of exclusivity when any consumer with any PC from any point in the country can buy them."
Montblanc isn't the only brand that's put a ban on Net sales. Vendome Luxury Group, which has a controlling stake in Montblanc, has the same policy for its other high-end brands, which include Cartier, Piaget, and Alfred Dunhill.
But policies aren't enough. Montblanc hasn't been able to stamp out online sales through unauthorized channels, like closeout shops and other discount retailers who get the pens without going through the manufacturer.
Montblanc was probably none too happy earlier this year, when its pens wound up in 7-24.com Outlet Store, a site that specializes in closeout sales.
Jeff Tezer, who runs the site, said he had no trouble selling out his stock of 40 pens at $89 apiece, well below the manufacturer's suggested price. When his stock ran out, he still had plenty of demand.
"There seems to be a really big black market industry on those pens," Tezer said. "One guy wanted to buy 600."
Another risk is that would-be buyers searching online for the luxury pens will wind up at a site like Ikon Pen, a forum for pen collectors, where many Montblanc customers have posted complaints about leaks, broken parts, and a host of other problems they've had with their pens.
In many cases, Werner said, customers are tricked by unauthorized retailers into buying knockoff pens that don't live up to Montblanc standards. A flourishing "gray market" has long existed for unauthorized sellers, and such practices have been quickly replicated online.
Nonetheless, Werner said Montblanc has no immediate plans to put up an official Web site to sell its pens and other luxury goods. Although the company plans to create a Web site to sell some of its more mundane supplies, like ink and paper refills, it won't sell its core products online.
Customers who live far away from a pen store can still buy Montblancs via catalog, where the company makes sure its products are presented in the proper manner. Until the Net matures into a medium that allows luxury manufacturers to control how products are presented, don't expect an online equivalent.
But some authorized retailers worry that Montblanc will sacrifice a lot of business if it doesn't embrace Internet sales.
"The sales that we have on the Internet are certainly growing a lot faster than in our regular stores," said Jun Tay, a manager at World Pen, a high-end pen shop in Seattle that has been selling Montblanc for the last 25 years. "I can't help but feel they might be losing out."
