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The headline is inaccurate: no smuggling is involved. Trader Joe's is a great brand name: they sell OK products and have developed an incredibly loyal customer

The headline is inaccurate: no smuggling is involved. Trader Joe's is a great brand name: they sell OK products and have developed an incredibly loyal customer base. Pirate Joe's is trading on that popularity. I'd love to understand the business logic behind Trader Joe's response to this. It's not like they'd have to open up a full national operation. Franchising in Canada is fairly simple and straightforward, so it's hard to believe that licensing Canadian franchises wouldn't be a more profitable approach to this than suing Pirate Joe's. There may be hidden costs, but clearly things like creating Canadian-compliant labeling is a pretty small barrier. So as a business strategy: a) refusing to operate in a territory where there is demonstrable demand for your products and b) spending oodles of money suing people who are fulfilling customer demand for your products in that territory seems like the least sensible thing to do. It would be interesting to see the economic reasoning behind it, which has never been clearly explicated ("Trademark protection" clearly won't suffice, as this article points out.)

cracell 12y ago
Trader Joe's is a privately held company and doesn't franchise (http://www.traderjoes.com/about/general-faq.asp#Franchise http://www.traderjoes.com/about/general-faq.asp#Franchise). Seems like starting to franchise would not necessarily fit with their long term growth goals. I'd assume this is mostly just about brand control. A store selling their products that they don't control will not necessarily have the experience they want for their brand. Even if they can't shut it down, just harassing them can prevent the store from growing very large and causing issues with their brand perception. That said more media coverage around this could paint Trader Joe's as a bully and be more damaging to their brand than an unauthorized seller.
- bduerst 12y ago
  That's doubtful. If the Girl Scouts started cracking down on cookie resellers, I doubt people would side with the resellers. With the reselling of groceries you run in to quality control issues, where Pirate Joe's can be selling expired Trader Joe's goods and making people sick, which can make Trader Joe's liable for harm.
  - scott_karana 12y ago
    > With the reselling of groceries you run in to quality control issues, where Pirate Joe's can be selling expired Trader Joe's goods and making people sick, which can make Trader Joe's liable for harm. Are you sure? After all, if I buy expired Kellogg's cereal from a store and get sick, it's the store I sue, not Kellogg's. Right?...
    - jnem 12y ago
      Agreed, it would be unreasonable to hold a business responsible for what someone else does with their product. I mean, Windows has been crashing PCs for years and I don't see people suing Dell as a result. That would cause so many loophole issues. For example, why sue Dell in that scenario, why not sue IBM for creating the platform in the first place? Or Edison and Tesla's intellectual estates for making electrical devices possible.
  - tetrep 12y ago
    >With the reselling of groceries you run in to quality control issues, where Pirate Joe's can be selling expired Trader Joe's goods and making people sick, which can make Trader Joe's liable for harm. Is there any precedence for that? I would love to see a court that put the manufacturer of a product at fault for damage caused by an unauthorized reseller. That would be no different than someone suing a food manufacturer because a grocery store sold their product after it had expired. If you notice in the article, he already needs to create new nutrition labels for all the food to comply with Canadian law. He is clearly already liable for what he's selling, I don't see how Trader Joe's would ever get implicated legally if there were any issues with expired food.
    - VBprogrammer 12y ago
      I'm not a lawyer but I'm pretty sure the fact that Trader Joe's don't have a legal presence in Canada would make legal action against them a bit tricky.
    - foota 12y ago
      I can see where by knowing of Pirate Joe's and not taking action against them, someone could argue that Trader Joe's was authorizing him to resale their products.
- darkarmani 12y ago
  > I'd assume this is mostly just about brand control. A store selling their products that they don't control will not necessarily have the experience they want for their brand. Even if they can't shut it down, just harassing them can prevent the store from growing very large and causing issues with their brand perception. Can't they distance themselves from him and at the same time benefit from selling through him? They'd even have more influence over him if they had a cooperative agreement: ie: don't call himself "Pirate Joe's" and put up a big disclaimer. He wouldn't have to do that, but maybe he would do those things if they gave him a side channel to get goods.
  - voxic11 12y ago
    he doesn't call himself pirate joe's that's just the popular nickname, the store's name is Transilvania Trading.
    - xanderstrike 12y ago
      Except that it says "Pirate Joes" in the window and on signage.
    - deleted 12y ago
      [deleted]
    - tzs 12y ago
      Then he was very confused when he recorded his voice mail greeting: "Hi you've reached Pirate Joe's we're located at 2348 West 4th Street"
    - jnem 12y ago
      Read carefully. It was originally "Transylvania..." but after he moved locations he changed the name of the store to "Pirate Joe's" (a decision influenced by what WAS the nickname).
- mullingitover 12y ago
  > That said more media coverage around this could paint Trader Joe's as a bully and be more damaging to their brand than an unauthorized seller. It's certainly damaged their brand in my eyes, and it's not painting them as bullies: they're being bullies. This is a person who's buying a product fairly, taking it to a place where that product doesn't exist, adding a minor markup, and selling it. There's absolutely nothing grey about this practice, it's 100% honest and legal. For Trader Joe's to sue him for doing something that's completely within his rights is beyond loathsome. He's a customer who's buying a huge amount of their products at retail price, they should be sending him thank you letters. I think I might actually stop shopping at Trader Joes over this, as much as it pains me. It's just utterly repugnant behavior on their part.
  - Retric 12y ago
    He calls it "Pirate Joes" and resells their products. If nothing else your legally required to defend your trademark or you lose it. They also lose out on quality control issues which could be a major issue. Now their unlikely to win, but by suing and losing they gain some protection. If nothing else if someone get's sick they can say look we tried to stop him but we don't have a choice. On the other hand if they say it's ok that's going to open them to liability.
    - virtue3 12y ago
      "Right to Parody" from wikipedia (USA law but fuck it let's go for it): n Campbell v. Acuff-Rose Music Inc[22] the Supreme Court recognized parody as a potential fair use, even when done for profit. http://en.wikipedia.org/wiki/Fair_use#Fair_use_and_parody http://en.wikipedia.org/wiki/Fair_use#Fair_use_and_parody Technically, you could probably do it in the states in a location that trader joe's isn't. Although I'd definitely have a very good lawyer on retainer if I was thinking of that :/
      - ObviousScience 12y ago
        Parody requires that it be a work of art. Are you implying that his buying their products, transporting them, and reselling them is some kind of performance art which is criticizing Trader Joes in some fashion? And that this guy is going to stand in front of a judge and claim he's not in the business of selling merchandise, he's a performer?
- golemotron 12y ago
  > A store selling their products that they don't control will not necessarily have the experience they want for their brand. Too bad. When you're in business you don't get to control everything about your product. The problem I have with the article is that it is too sympathetic to Trader Joe's position. Even the term "gray market" is loaded. What Pirate is doing is not only legal, there's nothing improprietous about it. I shudder imagining a capitalism where you need permission to resell things that you've bought.
mscarborough 12y ago
You're right, no smuggling. I'm not sure that suing the guy isn't a bad idea...if you're a brand that doesn't franchise and controls experience, why let international stories out about how some peeps are just "gray-area-ing" your products and name, and getting away with it? In the article it even said the guy was looking for places to open up a new store. Trader Joe's not wanting to open up in Canada doesn't validate anything about what he's doing. Perhaps TD has a longer-term strategy, that doesn't involve anyone who can live near the Canadian border selling their stuff at a marked-up price. We're not talking about importing fruits and vegetables to save money for people at "the Safeway across the street," which the author didn't bother to justify. How anyone would go to this length to sell chocolate-covered almonds, or peppermint cookies, and pretend that selling more snacks is just doing everyone a political/ethical justice is beyond me.
PhasmaFelis 12y ago
> I'd love to understand the business logic behind Trader Joe's response to this. I realize this sounds silly and trollish, but my conclusion from a couple of marketing classes and years of news is that marketing people are aliens. They don't really share perceptions or value functions with the rest of the human race. The highest moral value is the good of the brand, which acquires a sort of religious significance beyond even money. Pirate Joe's doesn't hurt Trader Joe's bottom line or threaten their trademarks, but it's an insult to The Brand. That makes them angry, just like defacing a Bible makes a Christian fundamentalist angry. This explains, for example, why businesses keep running into the Streisand Effect over and over and over and never learning. In Business Land, the only moral and rational response to threats to The Brand is to suppress them, and the only proper tool for resolving grievances is the lawsuit. It's not that they're mustache-twirling villains; they've genuinely forgotten that humans respond to censorship with moral outrage, or that it's possible to open a conversation without a legal threat.
RandallBrown 12y ago
I don't think opening stores in Canada would be all that straightforward. The company I work for now is opening stores in Canada now and they needed to create a whole new Canadian business entity for it. The reason being that if they used the same one as the US, then Canada could tax all sales taking place in the US as well. (I'm sure it's more complicated than that, but that is how it was explained to me.) Also, I've heard that Trader Joe's only expands in groups of three stores at a time. It has to do with their distribution centers or something. So they need the demand in order to make opening up a new distribution center worth it. I doubt Trader Joe's is "refusing" to operate in that part of Canada, it's just that it's lower on their list of places to open new stores.
- t1m 12y ago
  It is true that Canada is not the same country as the USA. If you do business in any country that has brick and mortar plus employees, you will need to register with the government in that country. The US has exactly the same law.
- roel_v 12y ago
  To be fair though, 'creating a new business entity' takes all of two hours and 500 dollars.
metermaid 12y ago
IIRC, Trader Joe's doesn't want to operate in Canada because of our more stringent liquor laws-- they wouldn't be able to sell alcohol here the way they do in the states, which would significantly affect their bottom line.
- yincrash 12y ago
  There are many states with stringent liquor laws that TJs operates in just fine. They tend to just not sell alcohol in those stores or in some locations have a separated liquor store.
- BenSS 12y ago
  There are TJs in Pennsylvania, and they can't sell alcohol at all. It might be a factor but not the overriding one.
lizavp 12y ago
Some of their products are great and come from the same suppliers as Wholefoods. Great organics on a budget.

cracell 12y ago

Trader Joe's is a privately held company and doesn't franchise (http://www.traderjoes.com/about/general-faq.asp#Franchise http://www.traderjoes.com/about/general-faq.asp#Franchise). Seems like starting to franchise would not necessarily fit with their long term growth goals. I'd assume this is mostly just about brand control. A store selling their products that they don't control will not necessarily have the experience they want for their brand. Even if they can't shut it down, just harassing them can prevent the store from growing very large and causing issues with their brand perception. That said more media coverage around this could paint Trader Joe's as a bully and be more damaging to their brand than an unauthorized seller.

bduerst 12y ago
That's doubtful. If the Girl Scouts started cracking down on cookie resellers, I doubt people would side with the resellers. With the reselling of groceries you run in to quality control issues, where Pirate Joe's can be selling expired Trader Joe's goods and making people sick, which can make Trader Joe's liable for harm.
- scott_karana 12y ago
  > With the reselling of groceries you run in to quality control issues, where Pirate Joe's can be selling expired Trader Joe's goods and making people sick, which can make Trader Joe's liable for harm. Are you sure? After all, if I buy expired Kellogg's cereal from a store and get sick, it's the store I sue, not Kellogg's. Right?...
  - jnem 12y ago
    Agreed, it would be unreasonable to hold a business responsible for what someone else does with their product. I mean, Windows has been crashing PCs for years and I don't see people suing Dell as a result. That would cause so many loophole issues. For example, why sue Dell in that scenario, why not sue IBM for creating the platform in the first place? Or Edison and Tesla's intellectual estates for making electrical devices possible.
- tetrep 12y ago
  >With the reselling of groceries you run in to quality control issues, where Pirate Joe's can be selling expired Trader Joe's goods and making people sick, which can make Trader Joe's liable for harm. Is there any precedence for that? I would love to see a court that put the manufacturer of a product at fault for damage caused by an unauthorized reseller. That would be no different than someone suing a food manufacturer because a grocery store sold their product after it had expired. If you notice in the article, he already needs to create new nutrition labels for all the food to comply with Canadian law. He is clearly already liable for what he's selling, I don't see how Trader Joe's would ever get implicated legally if there were any issues with expired food.
  - VBprogrammer 12y ago
    I'm not a lawyer but I'm pretty sure the fact that Trader Joe's don't have a legal presence in Canada would make legal action against them a bit tricky.
  - foota 12y ago
    I can see where by knowing of Pirate Joe's and not taking action against them, someone could argue that Trader Joe's was authorizing him to resale their products.
darkarmani 12y ago
> I'd assume this is mostly just about brand control. A store selling their products that they don't control will not necessarily have the experience they want for their brand. Even if they can't shut it down, just harassing them can prevent the store from growing very large and causing issues with their brand perception. Can't they distance themselves from him and at the same time benefit from selling through him? They'd even have more influence over him if they had a cooperative agreement: ie: don't call himself "Pirate Joe's" and put up a big disclaimer. He wouldn't have to do that, but maybe he would do those things if they gave him a side channel to get goods.
- voxic11 12y ago
  he doesn't call himself pirate joe's that's just the popular nickname, the store's name is Transilvania Trading.
  - xanderstrike 12y ago
    Except that it says "Pirate Joes" in the window and on signage.
  - deleted 12y ago
    [deleted]
  - tzs 12y ago
    Then he was very confused when he recorded his voice mail greeting: "Hi you've reached Pirate Joe's we're located at 2348 West 4th Street"
  - jnem 12y ago
    Read carefully. It was originally "Transylvania..." but after he moved locations he changed the name of the store to "Pirate Joe's" (a decision influenced by what WAS the nickname).
mullingitover 12y ago
> That said more media coverage around this could paint Trader Joe's as a bully and be more damaging to their brand than an unauthorized seller. It's certainly damaged their brand in my eyes, and it's not painting them as bullies: they're being bullies. This is a person who's buying a product fairly, taking it to a place where that product doesn't exist, adding a minor markup, and selling it. There's absolutely nothing grey about this practice, it's 100% honest and legal. For Trader Joe's to sue him for doing something that's completely within his rights is beyond loathsome. He's a customer who's buying a huge amount of their products at retail price, they should be sending him thank you letters. I think I might actually stop shopping at Trader Joes over this, as much as it pains me. It's just utterly repugnant behavior on their part.
- Retric 12y ago
  He calls it "Pirate Joes" and resells their products. If nothing else your legally required to defend your trademark or you lose it. They also lose out on quality control issues which could be a major issue. Now their unlikely to win, but by suing and losing they gain some protection. If nothing else if someone get's sick they can say look we tried to stop him but we don't have a choice. On the other hand if they say it's ok that's going to open them to liability.
  - virtue3 12y ago
    "Right to Parody" from wikipedia (USA law but fuck it let's go for it): n Campbell v. Acuff-Rose Music Inc[22] the Supreme Court recognized parody as a potential fair use, even when done for profit. http://en.wikipedia.org/wiki/Fair_use#Fair_use_and_parody http://en.wikipedia.org/wiki/Fair_use#Fair_use_and_parody Technically, you could probably do it in the states in a location that trader joe's isn't. Although I'd definitely have a very good lawyer on retainer if I was thinking of that :/
    - ObviousScience 12y ago
      Parody requires that it be a work of art. Are you implying that his buying their products, transporting them, and reselling them is some kind of performance art which is criticizing Trader Joes in some fashion? And that this guy is going to stand in front of a judge and claim he's not in the business of selling merchandise, he's a performer?
golemotron 12y ago
> A store selling their products that they don't control will not necessarily have the experience they want for their brand. Too bad. When you're in business you don't get to control everything about your product. The problem I have with the article is that it is too sympathetic to Trader Joe's position. Even the term "gray market" is loaded. What Pirate is doing is not only legal, there's nothing improprietous about it. I shudder imagining a capitalism where you need permission to resell things that you've bought.

mscarborough 12y ago

You're right, no smuggling. I'm not sure that suing the guy isn't a bad idea...if you're a brand that doesn't franchise and controls experience, why let international stories out about how some peeps are just "gray-area-ing" your products and name, and getting away with it? In the article it even said the guy was looking for places to open up a new store. Trader Joe's not wanting to open up in Canada doesn't validate anything about what he's doing. Perhaps TD has a longer-term strategy, that doesn't involve anyone who can live near the Canadian border selling their stuff at a marked-up price. We're not talking about importing fruits and vegetables to save money for people at "the Safeway across the street," which the author didn't bother to justify. How anyone would go to this length to sell chocolate-covered almonds, or peppermint cookies, and pretend that selling more snacks is just doing everyone a political/ethical justice is beyond me.

PhasmaFelis 12y ago

> I'd love to understand the business logic behind Trader Joe's response to this. I realize this sounds silly and trollish, but my conclusion from a couple of marketing classes and years of news is that marketing people are aliens. They don't really share perceptions or value functions with the rest of the human race. The highest moral value is the good of the brand, which acquires a sort of religious significance beyond even money. Pirate Joe's doesn't hurt Trader Joe's bottom line or threaten their trademarks, but it's an insult to The Brand. That makes them angry, just like defacing a Bible makes a Christian fundamentalist angry. This explains, for example, why businesses keep running into the Streisand Effect over and over and over and never learning. In Business Land, the only moral and rational response to threats to The Brand is to suppress them, and the only proper tool for resolving grievances is the lawsuit. It's not that they're mustache-twirling villains; they've genuinely forgotten that humans respond to censorship with moral outrage, or that it's possible to open a conversation without a legal threat.

RandallBrown 12y ago

I don't think opening stores in Canada would be all that straightforward. The company I work for now is opening stores in Canada now and they needed to create a whole new Canadian business entity for it. The reason being that if they used the same one as the US, then Canada could tax all sales taking place in the US as well. (I'm sure it's more complicated than that, but that is how it was explained to me.) Also, I've heard that Trader Joe's only expands in groups of three stores at a time. It has to do with their distribution centers or something. So they need the demand in order to make opening up a new distribution center worth it. I doubt Trader Joe's is "refusing" to operate in that part of Canada, it's just that it's lower on their list of places to open new stores.

t1m 12y ago
It is true that Canada is not the same country as the USA. If you do business in any country that has brick and mortar plus employees, you will need to register with the government in that country. The US has exactly the same law.
roel_v 12y ago
To be fair though, 'creating a new business entity' takes all of two hours and 500 dollars.

metermaid 12y ago

IIRC, Trader Joe's doesn't want to operate in Canada because of our more stringent liquor laws-- they wouldn't be able to sell alcohol here the way they do in the states, which would significantly affect their bottom line.

yincrash 12y ago
There are many states with stringent liquor laws that TJs operates in just fine. They tend to just not sell alcohol in those stores or in some locations have a separated liquor store.
BenSS 12y ago
There are TJs in Pennsylvania, and they can't sell alcohol at all. It might be a factor but not the overriding one.

lizavp 12y ago

Some of their products are great and come from the same suppliers as Wholefoods. Great organics on a budget.