Economics of pencils

As you may or may not be aware, California Cedar is reviving the Blackwing brand! The pencil community is all astir with excitement about it. Building up to their release, CalCedar’s Charles Berolzheimer (or “Woodchuck” as he is known on his blog) is writing a series of posts about the “why” of their decision to lead up to the product release. While I try to figure out how I’m going to do a video review of my new strange pencil sharpener, I think I’ll discuss the first of these articles.

In his first article, “Why Take on the Challenge?“, he almost seems like he’s trying to talk himself out of it:

Anyone crazy enough to try to build a new brand name in a rough and tumble globalized commodity business like the pencil industry is always going to want the best advantage possible. Very few pencil producers really professionally and effectively advertise and market pencils anymore. The closest promotion the average consumer is exposed to are circular ads of mass retailers and office superstores offering “loss leader” prices during back to school time to get people in the door. They’ll give away $2 of pencils at or below cost to sell that $10 to 20 calculator and other goods that makes them much higher margins. The cost pressure from the large retailers drives producers towards an obsessive focus on the economics of pencil production. Over the last 20 years, this has resulted in a reduction in the general quality of pencils and outsourcing overseas while cutting marketing support dollars and manpower devoted to thinking creatively about pencils. [link]

This is really interesting, and so true. Office Depot sells a dozen plain yellow pencils for about the cost of a single CalCedar Palomino pencil, so most consumers would go out and buy the Office Depot brand, right? Not many people, it seems, see a quality difference that would justify the cost of a Palomino, although they are worlds apart to me.

This article linked to a past article about the economics of pencil-making. This was interesting, too, although it was more of a list. It did reference an old, fairly famous essay by economist Leonard Read called I, Pencil, where he discusses the globalization of something even as straightforward as a simple pencil.

I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove. In fact, if you can understand me—no, that’s too much to ask of anyone—if you can become aware of the miraculousness which I symbolize, you can help save the freedom mankind is so unhappily losing. I have a profound lesson to teach. And I can teach this lesson better than can an automobile or an airplane or a mechanical dishwasher because—well, because I am seemingly so simple.

Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn’t it? Especially when it is realized that there are about one and one-half billion of my kind produced in the U.S.A. each year.

The article was written in 1958, so the statistic at the end of the quote may be a bit different.

Anyhow, to get back to the crux of WoodChuck’s article: if pencils are a globalized commodity, land where price- and quality-slashing is king, how do you manufacture and market a high quality, fairly expensive (I’m assuming) product?

I think he has the answer. After all, he’s been doing it with the Palomino brand all along.

Since we launched our California Republic range my vision has been to establish our premium quality Palomino brand as fresh, new and fun, with great quality and safety performance. This has been a gradual and experimental process mostly conducted over the internet and in my spare time when not attending to our core slat and firelog businesses. Nevertheless we are building a small, but growing fan base and our recent website redesign is helping to move this ball forward with our “Freedom of Expression” theme as well as expanded features and products. In our view the pencil is perhaps the most common and affordable tool of creative self-expression used around the world. It may not have the reach of the internet, but there is a personal sense of connection to writing, drawing, sketching or doodling with a pencil that for many cannot be matched by typing on a keyboard or drawing with a stylus on a computer screen. For us, Palomino is an important part of enhancing “freedom of expression”, but we know finding your favorite instrument of self-expression is a personal journey and so in time we’ll be featuring even more pencils from other producers who use our slats in our store.

They are accomplishing a few things here:

  1. Creating an online community of pencil enthusiasts to ooh and ahh over this product line,
  2. Highlighting quality of materials and manufacturing over inexpensiveness,
  3. Championing the pencil as a tool of self-expression and creativity, rather than a blah stick of wood you use to take notes or do boring business-y things, and
  4. Making it personal — offer choices as part of a “personal journey”.

It works for me. Admittedly, these are the conclusions I came to on my own before ever hearing of the Palomino or any of the other California Republic brands. It seems obvious to me that the writing experience of a Palomino (with the highly lacquered barrel, incensed strong wood, hearty but effective eraser, and smooth and dark lead) trumps a cheap feeling Office Depot pencil any day. But there are some people who must be convinced.

Is it wrong to buy cheap pencils when they could be paying more for an experience? Well, I don’t work for CalCedar, so I say no. Is it wrong for someone to prefer Tang when they could be drinking fresh-squeezed orange juice? I may try to convince them to pay the price for a pencil as an experience rather than a tool, but I don’t think it is intrinsically wrong if that’s not how they feel.

I look forward to hearing more about preparation for the Blackwing’s re-release. Meanwhile, head over to the blog or WoodChuck’s personal blog, Timberlines and stay up to date with news, editorials and features. And if you haven’t ever used a Palomino or any of its kin, buy one from the store. It’s an experience. (I’ll be waiting for my commission check!)

One thought on “Economics of pencils

  1. Pingback: Economics of pencils | Andy Welfle

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