Cash Back On Camera's

jonbeeza

jonbeeza

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Why do most manufacturers now give cash back on new camera purchases, would it not be best to just knock the price off at point of sale? I have often thought this is just a way to collect names and address :|
 
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The manufacturers probably hope not everyone will know about the offer, or bother/remember to claim, so they won't have to pay out as much as if they just discounted it at point of sale.
 
Because if you knock the money off at the point of sale it affects a retailer's margin and potentially influences the price of the camera/kit itself (upwards).

By making the offer redeemable from the supplier, you remove retailer influence from the equation.
 
DemiLion said:
Because if you knock the money off at the point of sale it affects a retailer's margin.....
Click to expand...

I did not mean the retailer gives the cashback out of their own pocket as such, rather the retailer claims the cash back.

But there again what would be the point of that? It simply makes the purchaser think they are getting a good deal. It is just feels like a false higher price, that's all:|
 
If the cash back was applied at the point of sale, it would be a price reduction imposed by the manufacturer, and leave them open to accusations of price fixing.
 
jonbeeza said:
Why do most manufacturers now give cash back on new camera purchases, would it not be best to just knock the price off at point of sale? I have often thought this is just a way to collect names and address :|
Click to expand...

Could also be a way to highlight grey imports; Only imports through the offical importer tend to be eligible for the rebate.
 
It's also possible that they can target the cashback - so that (for example) only students are eligible... or as happened with a recent offer I saw everyone in the country apart from the manufacturer's employees was eligible (presumably they had a comparable/better offer available).

Also it helps the manufacturer with cashflow - they already got paid "full whack" by the distributor/retailer so maybe giving some back a month down the line (since most cashbacks take 3-4 weeks to process after they've been sold) is less onerous than the alternative of a "paid promotion" in store direct (the economics of the 3 for 2 offer between retailer and manufacturer are typically that the manufacturer will pay not only for the 3rd item, but also the "lost" profit to the retailer on the 3rd item plus a handling fee - so if it's quite a small scale of cashback transactions and high value of cashback then it's probably cheaper to run the operation than by promoting in store by price drop)
 
As Demi says, once the item is sold to the retailer/distributor the price is out of the manufacturer's hands. It is on the retailer to the the price. The manufacturer makes a suggested retai price, but that is not legally binding (or else price fixing has occured). So the options that the manufacturer has for price reductions are:

(1) rebate as currently to the consumer
(2) lower price to retailer initially
(3) offer rebates to retailers for cameras sold

Each has its advantages/disadvantages. The reason that they offer rebates and not price changes is because of currency fluctuation. Each corporate year Nikon (or other camera company in Japan) will set a plan rate for currency exchange. Using that plan rate they will estimate the prices for products and set MSRP's. They will set it high enough that currency fluctuations will not affect their bottom line too much one way or another. If the currency fluctuates in their favor then they offer a rebate to reduce the price to the consumer. Without the rebate, they would be at the mercy of the curency market as they wouldn't be able to change the price they charge their retailers mid year (at least the retailers don't like it if you do).

So changing price mid year won't work. How about retailer rebates? Unfortunately, if they did that then there is no guarantee that it would be passed on to the consumer. So Nikon offers Jessops a £50 rebate on each D3100's sold. Do jessops (a) drop the price of a D3100 by £50, (b) drop it by £25 and pocket the rest, (c) raise their advertisement rates but don't discount them, (d) only drop the price by up to £50 if a customer asks for a price match, (e) etc? So consumer rebates are the most direct way to give money back to the consumer from the manufacturer.

Thanks
Rick
 
casts_by_fly said:
So the options that the manufacturer has for price reductions are:

(1) rebate as currently to the consumer
(2) lower price to retailer initially
(3) offer rebates to retailers for cameras sold

Each has its advantages/disadvantages. The reason that they offer rebates and not price changes is because .....
Click to expand...

That's what I love about this place, you get the real heads up ;)

Thanks for that very informative post, it's a cracker :thumbs:
 
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