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Thursday, November 29, 2007

Whither the American Market?

Biz News - I've just posted two new Talbert Briars to the site catalog, a sandblasted tankard (already sold, I think) and a beautiful high-grade smooth.

My recent replacement (forced, due to our old printer vomiting its ink cartidges all over its internal workings like Jim Belushi at a frat party) of our office printer has got us a new scanner/printer/fax unit. It's a delight to have a scanner in the house again, after five years without. I'd forgotten how handy they are. This, coupled with the ensuing "Digging through old photo albums for things that need scanning" turned up some pics I'd thought long lost - Photos of my very first pipes. In fact, today's photo is of the first two pipes I ever made - Pipe #1 is the one in the foreground and #2, the ever-popular Bilbo, is the background one. Both were made from blocks entirely using a Dremel, start to finish, including doing all the polishing with it (A slow and arduous affair, without doubt!)

We're about to go into our tenth year of business with Talbert Pipes, and it's a time for some reflection. When I went into the pipe business, my intent was simple - to produce the highest quality handmade pipes I could, pipes to compete with the best of the European masters for slightly more accessible prices. It isn't for me to judge how successful I was at that (or not), but one interesting thing I've noted is the shift in my sales over the years. For the first few years, I sold everything I made exclusively to American buyers, and there seemed no reason to even try to look elsewhere - foreign shipping was a hassle by comparison, and I didn't understand the issues of foreign currencies. The US was riding the economic boom and optimism of the Clinton years and all seemed well. But over the last five years, I've watched the US market go sour with the US economy - Compare, for example, the fact that when I moved to France, a dollar was worth 1.15 €, while today it is worth about .53 cents of a euro. In only five years...

This isn't going to fix itself any time soon. During this period, various folks have confidently predicted that that dollar would turn around in short order, but when you consider the monstrous deficit, the unpopularity of the current administration and lack of global confidence thereof, and the fallout of the sub-prime market, it will be years yet before the dollar can hope to start climbing back up. (Having said that, I cross my fingers and hope the Prediction Law will come into play, and immediately begin to prove me wrong!) It's made it more and more difficult for US buyers to purchase my pipes, to my great sadness. While I haven't changed my prices at all, the pipes have effectively become considerably more costly to American buyers, like all other brands from the EU market. Just recently I talked with a Canadian pipemaker who was himself being forced to reprice his pipes in his native currency to stop bleeding income to the devaluing dollar - something I was forced to do several years ago.

(If this all sounds Greek, I'll lay it out simple - all my bills and food are priced in euros, and the pricing doesn't change. 75 € worth of groceries five years ago is still 75 € worth of groceries today, minus inflation. But if I priced in dollars five years ago, a $500 pipe would have provided me with 575 € for my work. Today, a $500 pipe would only pay me 390 €. Ack. This is the bottom line problem faced by all European vendors to the states today)

These days, more and more of my sales are going to European, Russian, and Asian buyers - people whose currency isn't devalued. I still do regular special order sales and commissions with American collectors and friends who are willing to accept the trade deficit, but I don't try to market my work there nearly so much... It's just depressing to me, really, because I'll be sitting back proudly looking at a new pipe that I think is a real steal for 525 €, and I've got to turn around and tell an inquiring American that, oh yeah, sorry, that's going to cost them something like $800+. I hate that they have to pay so much for my work - It's as much a social problem for me as an economic one, because I miss the general banter and friendly relations with all the US collectors.

What to do? Well, the need to make a living wage necessitates that I have to focus on selling to the people who are best able and eager to buy, and that isn't the US today. This disparity is eventually going to affect even the American pipemakers, who are currently in the enviable position of being able to sell very highly priced pipes at what amount to huge discounts on the world market. The problem is that all their supplies come from over here, and as the price of briar and rod doubles, it's eventually going to have impact even on the American makers. For my own part, it's likely that in future, I will post less pipes to the catalog and move more through various worldwide dealers - probably half of the website catalog sales were still mainly to English-speaking Americans, and with that half dropping more and more from the picture, there is less impetus to try and maintain website inventory. I'm still able to stay fully booked-up with orders for American collectors, at least, and I'm very thankful to these good folks for their business. But when you consider that I probably sell two or three times as many mortas in France and Germany than I do today in the states, it REALLY becomes a question of such basic issues as, should I make a French language version of the catalogs?

I don't know... Lots of meandering with few answers. At the end of the day, all one can hope for is that there will be a sea-change in US politics and economy in the near future, that will let our American friends start getting their real dollar's worth again!