Canon losing 30% sales to grey market

[Kym]

http://www.smarthouse.com.au/Digital_Photography/Industry/J7A4P9C9?page=1


The CEO of one of Australia’s largest camera chains claims that the importation of branded camera gear will appeal to small retail and online operators, but not the larger chains. He also said that Canon was losing up to 30% of their Digital SLR business to online.

Paul Shearer, the CEO of the Camera House chain, told ChannelNews that a lot of camera business is being lost to overseas web sites and that big brands like Canon, have already lost 30 percent of their digital SLR market to online operators and grey importers.

He believes that large operators like Camera House who often place orders for 500 cameras at a time would struggle to deal with grey importers who in recent weeks have established Australian bank accounts to facilitate trading over here.

In general I find Camera Market very expensive, and that on top of a high Canon Australia price means this is no surprise.

Hopefully this may make Canikon wake up.

[Xenedis]

This is really no surprise at all.

The writing has been on the wall for years.

I've been buying gear online for years, and saving thousands in the process. While I've bought some gear from B&Ms, all of my lenses have come from two reputable online suppliers.

I just had a quick look at the online site of a major photographics retailer, as well as that of a well-known, reputable online supplier.

The item I checked is the Canon EF 70-200mm f/2.8L II USM lens.

Big B&M retailer: $3,199.95
Online supplier: $2,989.00

It's a no-brainer.

And then there's the Canon EOS 5D Mark II:

Big B&M retailer: $3,200.00
Online supplier: $2,799.00

I'm not sure if the 5D Mark II from the online supplier includes an Australian warranty, but given an Australian warranty only lasts 12 months, it's up to the individual to decide whether that warranty is worth the $400, or whether the risk of having to fork out potentially significant money on repairs/replacement (in the event of a failure) is palatable.

None of the DSLRs I've owned has failed within the warranty period. The battery charger that came with my current camera failed, but it certainly wasn't worth $400.

[Kym]

To clarify - its Canon Australia that loses the sale. Canon .jp don't care if you buy grey.

[colinbm]

Oh dear, the poor old big end of town again :rolleyes:
Poor old Jerry & co :eek:
Well, Canon Japan are still getting the sales :confused013
As soon as these multi-nationals realise & honour international warrenties the better.
Col

[Art Vandelay]

The only surprising item in that article was they only estimated grey sales at 30% :)

[Xenedis]

Yes, Canon Australia is a separate entity. The B&Ms purchase from Canon Australia.

What stinks is that a more exotic lens (like a 300/2.8) may not be available from the B&M, and the B&M has to order it from Canon Australia, which may also not have the item. Guess where Canon Australia sources it...

Online suppliers often have lenses that B&Ms don't keep in stock.

I'm not sure if you're aware, but a few years ago CPS (Canon Professional Services) changed the membership eligibility requirements such that your equipment had to be purchased from authorised retailers. If you bought a couple of 1Ds and a bag of L-series lenses from an online supplier and otherwise satisfied the other membership requirements, you wouldn't be eligible.

I suppose this was Canon Australia's attempt at discouraging people from buying outside Canon Australia's distribution chain.

Clearly Canon Australia is very much aware that people are keen to save significant money by buying elsewhere.

[ElectricImages]

The only surprising item in that article was they only estimated grey sales at 30% :)

Lol I was thinking exactly the same thing... :)

[colinbm]

Yes, Canon Australia is a separate entity. .............(Canon Professional Services) ..............

Well if they are so professional, why can't they handle competition ?
That is how buisness works, unlike cartels.
Col

[Xenedis]

Well if they are so professional, why can't they handle competition ?

Canon Professional Services is not unique re its membership requirements. Nikon Professional Services (NPS) does it too.

From https://nps.nikon.com.au/pages/register-criteria.asp:


All equipment to be registered with the NPS program must be purchased through an Authorised Australian reseller. Proof of purchase will be required.

From http://www.canon.com.au/en-AU/Pro-Photography/About-Canon-Professional-Services:


equipment must have been purchased from a Canon Professional Dealer in Australia.

[Kym]

I have no problem with CPS or NPS limiting to gear bought via their supply chain.
I also have no problem with their prices per se. If they want to be uncompetitive then so be it.

I do have trouble with them complaining about the grey imports ;)

CR Kennedy price match grey on Sigma and mostly their other prices are not over the top (my K-5 worked out to $50 more than grey in my hands).
Which proves Canikon could do the same.

[colinbm]

........CR Kennedy price match grey on Sigma and mostly their other prices are not over the top..........

I have just been down this very sad road, words do not translate into action :confused013
Yes I could buy a camera, but no I couldn't buy a lens for it :eek:
Another country far away in the continent saved the day & $$$$$$$$$$.
Col

[reaction]

that 30% looks like it was just pulled out of their ___

I think Canon loses more profit (not sales) to their employee 40% discount. Every canon user I know sources their lenses from an employee, and then there are those "brand new used for 2 wks" 2nd hand sales of gear that smells like an employee selling the gear.

[ElectricImages]

that 30% looks like it was just pulled out of their ___


Yes, but 77.53% of ALL statistics come from exactly the same place... XD

[peterb666]

http://www.smarthouse.com.au/Digital_Photography/Industry/J7A4P9C9?page=1



In general I find Camera Market very expensive, and that on top of a high Canon Australia price means this is no surprise.

Hopefully this may make Canikon wake up.

As far as Canon et al in Australia are concerned, no it won't. They would prefer to sell a smaller number of units at a high profit than to sell at a fair price. It isn't just Canon, Nikon et al but lens makers too.

Last year I bought a Sigma 150-500 for over $400 under the typical selling price. I got it off the Australian wholesaler.

This week I took delivery of a Tamron 60mm macro lens for less than half the price locally. It came from Japan and arrived quicker than if I had bought it locally. All for LESS THAN HALF the cheapest price here.

We are being shafted. Local suppliers have always overcharged and recently have not reduced prices with the rising dollar.

The combination of silly pricing in Australia, poor service and lack of stock on the shelves is what is killing the retrail photographic market. Provided there are enough consumers to buy the bread and butter stuff through the chain retailers, the suppliers don't care.

I have some sympathy for the specialist retailers but in truth, many of them are not providing a great service either. Explain to me why Canon and Nikon prices in Australia are amongst the highest in the world, but you can have people like Mainline Photographics who are an Australian distributor for Voigtlander lenses, supplying these at prices amongst the lowest in the world? If a small company can do it, why not the large ones?

I prefer to buy locally, but I want service and value too.

[peterb666]

Yes, but 77.53% of ALL statistics come from exactly the same place... XD

But only 37.84% of the time.

[JM Tran]

Before I did this full time I worked in a camera store, and know some ppl from Canon Aus personally, the mark up that Canon Aus sells to retail stores here is unbelievable - 3 yrs ago a Canon 580EXII flash can be bought by staff working for Canon's camera department for $210 dollars.....the store's cost price to order from Canon Aus is $570 ish, add the store's mark up for profit on top and you wonder why its almost a no brainer to go with online buying! This goes for Nikon too.

Poor form from both of them in Aus.

[reaction]

Canon 580EXII flash can be bought by staff working for Canon's camera department for $210 dollars.....the store's cost price to order from Canon Aus is $570

looks like all we need now is an ausphotography list of staff we can order stuff from!! :th3:

I hear they don't need to work in camera department to get the discount.

[fabian628]

I understand thier prices need to be higher than online stores to employ people, but some shops have really poor service which gives you very good incentive to buy online.

I remember walking into a camera house asking about a 35 f/1.4 (the guy didn't even know canon made this lens :confused013 )
In a different camera house, they could not explain the difference between a 60mm and 100mm macro lens, seriously :eek:

If I were operating a camera store I would try to make myself educated about all camera products so that you could at least sell to advanced people who are looking for specific info that you would find on gear forums.

[mikew09]

I have to agree - no surprise to me. I try to honour my local store and buy when they haggle close to match the on line price. To there defence they often barta down to within a few dollars of off shore. Having said that, I have been haggling for a Sigma 10-20mm F4-5.6 EX DC HSM lens. On my last visit to my usual store the price was 629 (only 30 bucks off, got a bit af haggling to go yet) - grey import 451. I say again, no surpise hey. Not sure I will get them down to that price considering the value of the dollar at this time.

[swifty]

It seems Canon Australia (and most likely Nikon Australia + all the other official distributors) who are the culprits.
If their mark-up is so high, it's no wonder local B&M stores can't compete, afterall you do have to make a profit, otherwise why do the trade at all.
I have noticed a trend lately though, at least with some Nikon gear, local prices were only about 5-10% higher so when you factor in things like GST, shipping etc. it's quite fair. If the difference is small I always still prefer a B&M store. I now have a good relationship with my local dealer and am happy with the face-to-face service. I always try to drive a bargain but it's pretty clear at what point they just can't compete.

[mikew09]

It seems Canon Australia (and most likely Nikon Australia + all the other official distributors) who are the culprits.
If their mark-up is so high, it's no wonder local B&M stores can't compete, afterall you do have to make a profit, otherwise why do the trade at all.
I have noticed a trend lately though, at least with some Nikon gear, local prices were only about 5-10% higher so when you factor in things like GST, shipping etc. it's quite fair. If the difference is small I always still prefer a B&M store. I now have a good relationship with my local dealer and am happy with the face-to-face service. I always try to drive a bargain but it's pretty clear at what point they just can't compete.

Agree 100%. Ovwer time I have build a elationship with one store, one fella ducks for cover when I come in but my usual sales girl understands my wants price wise. Hence, to date, I have bought all my items bar one from my reguarlar store as they have discounted close to grey market. I am fore supporting Australian business and there is some benefits with building a relationship - as example - when I went in with a question about my warranty, I was offered an upgrade on the 12 month old 50D purchase to the new 5 yr warranty.

Just not sure if the current economics will allow locals to be as competitive as I have found them in the past.

[peterb666]

I understand thier prices need to be higher than online stores to employ people, but some shops have really poor service which gives you very good incentive to buy online.


Online stores employ people too.

[Xenedis]

Given the proliferation of information on the Internet these days (in the form of review sites, forums, etc.), it's arguable that the good old-fashioned service traditional camera stores provided, has since been superseded.

I'm the sort of customer who doesn't need to be educated about the product. I know what I want, I know the gear, and all I need is someone to sell it to me for a reasonable price.

I don't know how much of the buying market consists of people who really need face-to-face advice, but if the proliferation of digital photography and photography review/discussions sites is an indicator, I'd say that segment is a minor part of the overall market.

[peterb666]

Customer service is more than product information. It is being made welcome, being able to get what you want with a minimum of fuss and to get it at a fair price. I will always prefer face-to-face service however poor delivery is completely off-putting and far too common.

[Xenedis]

Customer service is more than product information. It is being made welcome, being able to get what you want with a minimum of fuss and to get it at a fair price. I will always prefer face-to-face service however poor delivery is completely off-putting and far too common.

It really depends what you want.

Personally, I don't need to be made welcome by going into a store. I'm after a specific thing, not warm-and-fuzzies.

Getting what I want with a minimum of fuss, and at a fair price, is very easy to do on the Internet.

Then again, I'm the sort who'd rather use an ATM than a human bank teller (back when teller service was more common).

If you prefer human interaction, that's entirely okay; some people do.

[sonofcoco]

It's not really surprising to hear I guess. I bought my 40D from a shop (Harvey Norman funnily enough - back before I had a clue about where I should get camera stuff from :o). I bought four lenses from camera shops in Korea, most were significantly cheaper than buying in Australia. Most camera accessories, and my tripod, I bought online in Korea and made significant savings. In the end I saved about $350 on my tripod + ball-head, and $50 on a little digital level for the hot shoe. Online shops in Australia wanted $70 for the digital level and it was a model down from the one I got...I have no idea what it'd cost in a shop. It's ridiculous.

[ricktas]

I have heard a small rumour regarding prices and the difference they have around the world, in relation to camera companies. Stay tuned, there may be some very interesting news on the horizon.

[jgeor21]

Bought 7d + 17-55 lens from Australian business on Gold coast + Gst and still paid less than even online stores direct from Hong Kong no gst included. Looked for this lens in local stores and had trouble finding it, most did not stock it. Yes it was delivered direct from HK.
My point is the local australian busness with its local employees made a profit, the gove got there GST and I still payed alot less than RRP. Obviously there is a lot of margin for profit or margin for discounting in the rrp. No point been in business if you can,t make a profit / living, But imo Australian rrp is set way to high by canon. It would also be my guess it is Canon Australia making all the profit and not nessasarily the retailers.
My two cents worth.:)

[Mark L]

I have heard a small rumour regarding prices and the difference they have around the world, in relation to camera companies. Stay tuned, there may be some very interesting news on the horizon.

Does this mean I need to order a 60D from overseas now, or wait until my local overprices major retailer offers me a competitive price?

[peterb666]

I was led to believe by a wholesaler that import prices are normally set about once a year and normally around April. That means US prices will be going up as the USD has gone down. Most stuff is made in Asia which has generally done well compared to the USD. Australian prices should be coming down due to the change in USD to AUD and we have done even better than most Asian currencies compared to the USD.

But how much is passed on in Australia ??? Remember in capitalism, pricing is generally determined by what the market can tollerate and we are use to high prices.

[ricktas]

Does this mean I need to order a 60D from overseas now, or wait until my local overprices major retailer offers me a competitive price?

Lets just say that some camera companies are considering setting a worldwide price for their gear, that will mean you wont be able to get it cheaper via a grey market provider cause the price to them will be currency comparable to other countries. So places like Hong Kong may not be able to get the item cheaper, thus they won't be able to sell it cheaper.

So if an item costs $1000USD to buy from the manufacturer in the USA, it will cost 7769.50HKD (as at now) to buy the same item from the manufacturer in Hong Kong. Meaning there will be no cost saving by buying grey. At present, the same item is being sold from the manufacturer at different prices depending on the country it is being sold in.

Time will tell if this happens, but it certainly is being rumoured to being seriously considered by at least one camera company, and you can bet if one does it, the others will soon follow.

[colinbm]

Good in theory, but doesn't work in practise.
Countries with lower living standards have lower retail prices so as to get the market.
A $1000 washing machine costs $250 in Philippines for example.
Col

[peterb666]

Time will tell if this happens, but it certainly is being rumoured to being seriously considered by at least one camera company, and you can bet if one does it, the others will soon follow.

So are they going to jack up prices in every other country or will we finally get reasonable cost gear in Oz? BTW, as Oz has one of the lower VAT/GST rates in the world, it should make Australian rrp one of the lowest.

Still it is a nice thought but somehow I doubt that I will be holding my breath on this one as greed overcomes common sense, more often than not.

[Kerro]

Price is not an issue for me. If I want it I buy it. I prefer Canon.....

[Xenedis]

So are they going to jack up prices in every other country or will we finally get reasonable cost gear in Oz?

I'd be curious how large is the Australian market compared to, say, the US market or some European markets.

Australia is possibly a relatively small percentage of a large camera manufacturer's revenue.

[peterb666]

So if an item costs $1000USD to buy from the manufacturer in the USA, it will cost 7769.50HKD (as at now) to buy the same item from the manufacturer in Hong Kong. Meaning there will be no cost saving by buying grey. At present, the same item is being sold from the manufacturer at different prices depending on the country it is being sold in.

Hmm, you are right in that manufacturers generally agree to a price independently for each country but the initial cost price to the wholesaler is only part of the story. If parallel importing was widespread in Australia, there may be some help but as most major firms restrict trading to a single wholesaler and then there are large mark ups at the wholesale and retail level in Australia, you won't see much change.

If questioned on this lack of price movement, you will get the standard excuses of Australia being a small market, higher distribution costs, higher warranty costs, higher wages and...

Some things just never change.

I had the fortune of seeing the Jeff Carter (http://www.jeffcarterphotos.com/?cat=1950s) photo exhibition at the State Library of NSW earlier this year. Jeff Carter bought his Nikon F bodies and lenses ‘illegally’ in Japan and back to Australia back in 1959/60 or thereabouts. It is much easier today with the Internet and eBay et al, but some things never change.

[peterb666]

I'd be curious how large is the Australian market compared to, say, the US market or some European markets.


There was possibly a hint of sarcasm in my previous statement. Our photographic market is insignificant on a gobal scale.

[Xenedis]

There was possibly a hint of sarcasm in my previous statement. Our photographic market is insignificant on a gobal scale.

That's no surprise.

[colinbm]

Everything in Australia is insignificant to the World.
Our whole population is just one city in many countries :eek:
Col

[BrascoDon]

This topic is very interesting I've been wondering all the thoughts raised I know about the importance of supporting local but like was mentioned when your talking $400 difference on a lens under 2k!!!
In Bris (also Syd) there is a B&M who sell at a lower price then many stores and you can walk in. Admittedly they don't spend time as other stores would/could. I feel it's only fair though if I intentend to buy offine that's where I'll research, as tempting as it may be to get the hands on reasurance, it's literally stealing to go get your hands on using up staff time to then turn around and buy from online. I've had the experience where I work of this occurring it was a bit low and another guy was quite angry at the fact (not in front of the customer mind). Was about a year ago since then they reassesed how the price structure is set up.

[Xenedis]

I'll research, as tempting as it may be to get the hands on reasurance, it's literally stealing to go get your hands on using up staff time to then turn around and buy from online.

Doing so is not stealing. Remember, you're under no obligation to buy from a store simply because you've received advice there.

However, if you have decided you are going to buy a lens from an online supplier, yet deliberately visit stores and spend time with sales staff seeking advice, then that is unfair behaviour.

[peterb666]

This topic is very interesting I've been wondering all the thoughts raised I know about the importance of supporting local but like was mentioned when your talking $400 difference on a lens under 2k!!!


The lens I bought last week - Tamron 60mm f/2 macro - local price $850 (try and find one in a shop) - purchased from Japan $397 including EMS shipping and over-the-top PayPal currency conversion fees.

Funny thing is I have 2 outstanding internet orders from Australia at the moment, both made before the lens and still not delivered. The mail service from Japan is excellent. This is the 3rd lens I have got from Japan.

[neil70]

The main issue is with the restriction placed on retailers by the "sole importer" who is a middle man making a profit on the sale of goods. If the retailer was able to go direct to the manufacture and skip the middle man, like they do in other countries then the price for goods would be cheeper. I have these problems in my other areas of intrist, where here in Aus we pay 2-3 time more for goods than others around the world. This would have to be one of my buttons that gets pushed. teh origanal reason for "sole importers" and wholesalers was to get the goods cheeper by buying in bulk, but that has gone the way of masive profits for some and dont worry about the consumer. Now that the consumer has a way to fight back with out a plane ticket, the importers (like Gerry Harvey, yes he is also an importer) sook up that the retailer is loosing out and if we dont stop buying of the net then there will be no shops to give us the specilised service that we get now:eek:. This is the specialized service where i take my camera/lens in for a clean or adjustment and they send it away and talk to you as if they are doing the work them selves.

I could go on and on and on but i better get of the soap box .

[I @ M]

Neil70, all non parallel / non grey importers of photographic gear in Australia are either factory owned / based / backed distributors or are independent companies that have the makers blessing to represent them in Australia.
In the case the original post Kym is referring referring to Canon ( Aus ) specifically and they are directly controlled by Canon Japan. The same goes with Nikon. Pentax are handled by a private company who actively attempt to match grey import prices when approached. When we get down to smaller makers in the accessory field we see areas where the price differential leaves a lot to be desired.
Harvey Norman (in particular) simply buy from the established authorised distributors and are highly unlikely to even attempt to import photographic gear through the "back door" as they would simply end up with no Australian backup at all.
Ask yourself why they don't sell Pentax and Sigma gear!
If you can't think of an answer, I will tell you privately the exact reason that they don't stock those brands.

[colinbm]

Neil70, all non parallel / non grey importers of photographic gear in Australia are either factory owned / based / backed distributors or are independent companies that have the makers blessing to represent them in Australia.
In the case the original post Kym is referring referring to Canon ( Aus ) specifically and they are directly controlled by Canon Japan. The same goes with Nikon. Pentax are handled by a private company who actively attempt to match grey import prices when approached. When we get down to smaller makers in the accessory field we see areas where the price differential leaves a lot to be desired.
Harvey Norman (in particular) simply buy from the established authorised distributors and are highly unlikely to even attempt to import photographic gear through the "back door" as they would simply end up with no Australian backup at all.
Ask yourself why they don't sell Pentax and Sigma gear!
If you can't think of an answer, I will tell you privately the exact reason that they don't stock those brands.

Perhaps it is because the importer makes more profit from the other brands they imports & so stiffle the other obscure brands to increase sales in the prefered brands ?? :confused013
Col

[I @ M]

Perhaps it is because the importer makes more profit from the other brands they imports & so to stiffle the other obscure brands to increase sales in the prefered brands ?? :confused013
Col

Can't quite see the logic there Colin, Canon import Canon, Nikon import Nikon, CR Kennedy import a variety ( Pentax and Sigma as predominant products I guess ) and are pretty proactive when it comes to price matching. Maxwells import quite a bit of stuff as do Adeal and I can't see them favouring one brand over another seeing as they don't really have competitive brands in their lineup. :confused013

[colinbm]

Thanks Andrew
I have just had a months dealings to get a Sigma camera. Could get the camera, but no price matching & lenses were not available to me :confused013
I went off-shore :th3:
Col

[Colinc1]

I used to work in a wholsale import warehouse(not cameras) and the average mark up being passed onto the retailers, was somewhere in the region
of 150% - 200%, and i would not be surprised that it would be the same for cameras.

Then the retailer has to put their own mark up on top of that.