Gaps in the market

The contribution below is from a (soon to depart) member of the photo industry addressing discrepancies in the pricing of enthusiast cameras available to different categories of customers in Australia, and continuing offshore/local price gaps…  

Are the major suppliers killing the Australian photographic industry?

Ask any retailer in private and the answer will be a resounding ‘YES’ !

If you think back, the Australian photo industry – always a bit unpredictable and somewhat of a wild child at times – gradually became more unstable when the major international companies changed the scene, chasing marketshare rather than profit. Rather than being good for the trade, the big fellows have torn the photo industry to shreds without any real gain for anyone on the receiving end of their misguided polices.

Local price gaps

Times are not only tough for volume selling, margins have been whittled to below a safe level for growth and confidence in the future. Sheer corporate stupidity reigns supreme. Example: Only two weeks ago, a large chainstore was selling the top-selling twin kit in Australia at the dumped price of $988 against the inflated list price of $1249 – now the trade is starved of that product and may wait another two to three weeks for supplies. This popular product could have been marketed in an orderly fashion at say $1115 with a reasonable margin for all, including the distributor, and the same number of sales (or greater) would have been achieved. Are we missing something here, or is it just dumb?

To get supplies of these kits, the public will now turn to Australian direct importers or do it themselves directly from the myriad of overseas suppliers. To try to compete, small-to-medium retailers will also simply bring them in just to keep faith with their customers and try to stay relevant.

This problem is close to insanity; why flog off current products that people want and then create enormous shortages, whereas a bit of common sense and orderly marketing would have kept everyone happy and with enough margin to ensure a future in the industry?
Over time the actions of the majors, rather than discouraging direct imports, have unwittingly fostered private importing because of their amazing marketing decisions and, at times, the huge disparity that to some extent still exists between Australian pricing and overseas pricing for the same product.

International price gaps

It may be too strong to call some of the international companies dishonest brokers, but serious questions need to be asked, despite some narrowing of the price differences over the last 12 months, when a current major brand SLR – one of the top sellers – shows a difference of almost $400 on the final price compared to overseas’ pricing. Today! Now! It’s a yawning gap. Sure, one would expect to pay a reasonable premium here to cover warranties, freight, local support, a smaller market and so forth, but nothing can explain such pricing except that the majors are treating Australian consumers as mugs and manipulating the market to suit their own unfathomable ends.

Another example from the same company; a middling two lens kit SLR – very popular. A well know chain was selling it recently, sourced from the Australian supplier, at $500 less than the list price. How can this be? Simple. That sort of pricing disparity is tainted with sheer dishonesty and a total disregard for the integrity of the brand. Is it any wonder that no one believes a price anymore and is it surprising that resellers and consumers alike bring products in from overseas when they find it so difficult to deal with the instability generated by some of the major camera distributors.

It is all very well to list advantages of a local warranty, etc, but at some price differences, consumers will simply take the risk. Not much of a risk really. It is easy to predict that private importing will continue to grow at a substantial rate and it is just possible that it has already reached a level that matches the turnover of all the majors combined. Nobody knows.

Only in the photo industry are the leading brands allowed to be trashed; the integrity drained away. Such rampant actions are avoided by Mercedes Benz, BMW, Rolex watches and the dozens of other first-grade products that market in a very different manner and protect the value of their brands and the integrity that attaches to the brand and adds value to all concerned.

And although you can buy a high performance, top quality SLR in Australia from a washing machine salesman, who may have difficulty in setting the date into the camera, that isn’t going to happen with other high-value, high grade, prestige brands who are much smarter in how their products are sold.
– Name supplied but withheld on request

COMMENT: It’s unfortunate that people in our industry feel the need of anonymity to make forthright comment. Having been on the receiving end of demands for my dismissal to (former) employers, bullying threats of litigation, damaging whispering campaigns and boycotts on advertising support (10 cent prints and the 2010 Golden Tripod award were the two main issues which put me in the black book over the years!) I understand the contributor’s concerns. 

…And talking about 10 cent prints – one of the issues being addressed here in hardware – too large a gap between the prices provided to small specialist retailers compared to the likes of JB Hi-Fi – is mirrored in Fujifilm’s continued support of Big W and Harvey Norman at the expense, in my opinion, of the industry as a whole. Where’s the leadership?