MERCHANDISING: The $64 Answer

In the war of the ball pens most Johnny-come-lately penmakers are waging battle by an old competitive maneuver, cutting. But Eversharp, Inc., which has shot up from a near bankrupt company to the biggest pen & pencilmaker in the world, dollarwise, last week tried a new trick. It brought out a new ball pen, with a retractable point, to sell for $25 plus tax, ten dollars more than its present model.

High Prices. The merchandiser who promulgated this piece of business iconoclasm is Eversharp President Martin L. Straus II, 50, who works as smoothly as a ball bearing in his new empire. (His office is in his apartment in Manhattan’s swank St. Regis Hotel.) Things were not always thus. In 1929, as head of Chicago’s Hartman Furniture & Carpet Co., he saw it go broke in the depression, learned that low prices alone were not enough to make people buy. In 1939 he teamed up with Ralph A. Bard (later Under Secretary of the Navy) to buy the shaky Wahl Co., which made Eversharp pens & pencils, for $200,000.

The most expensive Eversharp set then retailed for $8.75. Straus brought out a $14.75 set (the old one with gold trimmings), picked up a radio show to plug it. The show, Take It or Leave It, put a new phrase into the language (“the $64 question”) and put Eversharp on the map. Then Eversharp found its own $64 answer, a $64 pen & pencil set. In two years, it sold $32,000,000 worth of the new sets, and $4,875,000 of solid gold $125 sets.

By the end of 1945, Eversharp had passed Parker Pen Co. and Sheaffer, and had an ace up its sleeve to grab off the brand new ballpen market. The ace: the North and Central American rights to the Biro patents, for which it had laid out $500,000 (TIME, Nov. 12, 1945).

High Profits. When other new pen-makers, notably Reynolds, threatened to tap the market first, Eversharp tried to stop them with a flurry of patent suits. The pens came out anyway, and sold like the hottest of cakes. When Eversharp finally brought out its own pen, it was delighted to find that the market was still going strong. Now it is turning out 30,000 pens a day, is sold out for months. This year, Eversharp expects to gross $50,000,000 on pens & pencils (2½ times as much as all pen & pencilmakers sold in 1939), net about $5,000,000. It also expects to run into much tougher competition shortly. New ball-point pens are being born weekly, and some of the new companies, notably the Hamilton Ross Jetflow Corp., may give Eversharp a run for its money.

But its biggest competition will come from the old line companies which have moved slowly into the ballpen field to be sure their pens worked before they were sold.

Eagle Pencil Co. has just put on sale its “Orbic” for $10, has already sold out all it can produce until well into 1947. Sheaffer is expected to bring out its ball pen shortly. Nobody knows how big the ballpen “market really is. But Eversharp hopes to keep getting the lion’s share with its high price policy. Its next model: a $100 pen, plus tax.