The inkwells are similar in appearance and function to real-world oil wells. The above-ground structure, or pumpjack, is equipped with a long, silver, needle-like device. This needle is plunged into a deep well, startling the octopi trapped within into releasing ink. This ink is refined and sold by Ink Inc..
The octopus ink from the wells was Stain'd-by-the-Sea's primary export and economic crutch, so when the octopi began to produce less ink, the company, under the direction of Ignatius Knight (son of Ingrid Nummet Knight, the founder of Ink Inc.), drained the sea to trap the last octopi in the wells. This crippled the town's economy and led to the formation of the Clusterous Forest. As the ink industry continued to decline, so did the town, and by the time Lemony Snicket arrives in Stain'd-by-the-Sea, both are reduced to the barest shadows of their former prosperity. In an effort to revive the town's essential ink industry, chemist Cleo Knight (Ignatius Knight's daughter) began to experiment with recipes for "an invisible ink that actually works". She was kidnapped by the Inhumane Society in an effort to steal her formula (and then rescued by Snicket and associates) in When Did You See Her Last?. Her experiments were not completed before the end of Why Is This Night Different from All Other Nights?, and the ultimate fate of Stain'd-by-the-Sea is unknown.