Profiteering and/or price fixing?

jerry12953

jerry12953

Messages
11,799
Name
Jeremy Moore
Edit My Images
No
I've been looking at a new canon 5d4 and the grey importers seem to be selling them in the £1700 - 1800 region, with excellent 3 year gurantees in some cases.

But you go on to Camera Price Buster and all the official retailers have them at £3249. There is no competition at all.

Firstly one has to suspect that it is no coincidence that they are all £3249. I thought price fixing was illegal , whether it was the retailer or manufacturer who is responsible.

And then, if the grey retailers can sell them for roughly £1500 less, who is making a killing here?

VAT and import duty obviously counts for some of the difference, but we're talking about a £900 premium for buying through an official outlet.

This is NOT another thread about grey retailers. It is more aimed at the manufacturers and major retailers who seem to be acting - shall we say - unethically.
 
I totally agree, had the same issue trying to buy a D500, I really want to support local shops and such, I hate the fact I have 40-50 miles maybe to travel if i want to actually touch something but saying that I'm not going to pay almost double for the same item for that privilege.

i wondered the same thing, does seem strange the greys can do this sort of price but every "retailer" seems to be the same, no deals, no discounts, just that's what I want, that's what your paying type attitude in the most part.
and before anyone says, i do run a business and understand the overheads, but i also check out the competition on a regular basis to make sure im within an acceptable price range and then hope ppl rely on name and previous happy customers.
 
I'm really not sure how you assume price fixing or unethical practices just because the retailers are selling at the RRP.

If one drops their price, then others will follow, then another drops their price and the others follow. Eventually nobody is making any money. Why would they want to get involved in a race to the bottom?

I agree, they are overpriced and the big price difference certainly isn't just VAT and duty, but we have expensive rates on shop fronts, we demand higher and higher wages, we have stupid returns policies for online purchases which means online retailers have to take back opened (probably used) goods up to a month after selling it and give full refunds including shipping costs, which they then can not sell as new again.

As much as I would love to support our local businesses, there is just no incentive so I bought mine from HDEW at £1700 and a three year guarantee.
 
It looks like the law on price fixing is a rather "grey" area. In theory there should be no such thing as a RRP. There has to be some co-operation over pricing amonst the major retailers, surely. Life's too short to take a legal case against them, but I wonder what Trading Standards would say?

See this link

And I agree about HDEW. Mine's just been delivered; ordered Sunday, £1769, VAT invoice, three-year guarantee.
 
Last edited:
Bear in mind the increase in cost may well be currency differences.
since brexit the euro and the dollar have crashed forcing imports to be much more expensive.
 
jerry12953 said:
That's all imports, presumably?

Perhaps the fact that my new 5d4 came in a kit box, (unfortunately without the 24 - 105 mk 2 zoom) may account for a small part of the price discrepancy.
Click to expand...

yes
 
ecoleman said:
Currency fluctuations would affect grey prices as well.
Click to expand...

not so much.
grey company in HK buys at local mates rates and then sells at a reduced profit to tax dodger in UK.

legit company buys from local legit source but that legit local source pays more to import from say manufacturer in HK, legit source then sells to non tax dodger so camera has passed through 2x sources not just one.
 
I have started buying imports recently. I like to support local businesses when I can but there is only 1 Canon pro dealer in wales I think and trade in prices they have offered me are pathetic. So much so that it was cheaper to buy the lens as an import and keep the other lens. I know they don’t make a huge profit from selling new gear but customer loyalty doesn’t seem to be a part of business plans these days. Since then I’ve bought 2 more bodies and 1 more lens as imports.
 
Gaz J said:
I have started buying imports recently. I like to support local businesses when I can but there is only 1 Canon pro dealer in wales I think and trade in prices they have offered me are pathetic. So much so that it was cheaper to buy the lens as an import and keep the other lens. I know they don’t make a huge profit from selling new gear but customer loyalty doesn’t seem to be a part of business plans these days. Since then I’ve bought 2 more bodies and 1 more lens as imports.
Click to expand...



Whether the prices are set by the manufacturers or by themselves, the official retailers are their own worst enemies. Who can blame people buying "grey".
 
Most of these retailers track each others prices - very regularly - and have automated price increasing/dropping tools based on the competition. Some still done manually too, because mistakes do happen.

You may also notice that you get the odd email on a Friday evening from Wex or Jessops with some extra discounts or voucher codes. This was a tactic they employed as they knew others wouldn't be able to react once out of office. Very clever!

Whilst price fixing is illegal, manufacturers offer these company many perks as part of selling their items as an additional. This means if, as a shop, you were to kill the market by going against the rest of your competitors, then you stand a chance of losing some of those perks. Marketing support, stock availability and better trade prices are just some of those things.

So it isn't price fixing, it's initiatives to ensure that people price carefully and don't kill the market price of products.

Ultimately it is in the shops best interests to keep these cameras at the same price - and up to the customer to choose which one they'd rather use. Plus there is always wiggle room if a customer was to purchase additional items which they can use as leverage to get a better deal (depending on the retailer and the margin I guess).
 
It’s almost definetly going on in the used market to , i was looking for a lens last week and scouring the large used dealers they all had the item (in alleged same condition) within a a pound or so of each other . Now giving the fact that they should be buying in from different types of seller and quite often ripping us off in the process with PX offers it does make you realise , in fact try this one take a used camera or lens into a retailer for PX , the first thing they do is check the computer ,there must be a list out there that tells them what to offer .
I did eventually find my lens but from one of the smallest used dealers that offered a years warranty and it was over a £100 cheaper than any of the other used retailers . I can remember when shops sold there used items based on e.bay prices these days it seems that’s been superseded by mpb prices
 
daffington said:
Most of these retailers track each others prices - very regularly - and have automated price increasing/dropping tools based on the competition. Some still done manually too, because mistakes do happen.

You may also notice that you get the odd email on a Friday evening from Wex or Jessops with some extra discounts or voucher codes. This was a tactic they employed as they knew others wouldn't be able to react once out of office. Very clever!

Whilst price fixing is illegal, manufacturers offer these company many perks as part of selling their items as an additional. This means if, as a shop, you were to kill the market by going against the rest of your competitors, then you stand a chance of losing some of those perks. Marketing support, stock availability and better trade prices are just some of those things.

So it isn't price fixing, it's initiatives to ensure that people price carefully and don't kill the market price of products.

Ultimately it is in the shops best interests to keep these cameras at the same price - and up to the customer to choose which one they'd rather use. Plus there is always wiggle room if a customer was to purchase additional items which they can use as leverage to get a better deal (depending on the retailer and the margin I guess).
Click to expand...


That's an interesting perspective - I guess you have some connection with the retail trade?

But I'd still like Trading Standards to have a look at this. You say "if, as a shop, you were to kill the market by....." and " ......price carefully and don't kill the market price...." My point is that there is effectively no market, because every outlet is selling these products at the same price.

It looks to me as if you're saying that the manufacturers (or distributors) are controlling the price by offering retailers inducements to stay in line and and punishments if they don't. That's still price fixing, as I understand it.

And it is the customer that loses. They have a choice of dozens of retailers to buy their Canon 5d4, as long as they're happy to pay £3249.
 
With so many retailers going bust and so few photography shops around I think we just have to look around smell the coffee and accept that there's a price for doing business in the UK.

There's the minimum wage let alone the living wage, rates, utilities and all the rest of these things we have here in the UK which are nothing short of stratospheric compared to having a computer, a phone and a warehouse in the far east and yes it's annoying but without these higher prices, wages and utility bills in the UK that are contributing to turning highstreets into nothing more than rows of boarded up shops with only Pound and charity shops bucking the trend the NHS and everything else would be in an even worse state.
 
jerry12953 said:
That's an interesting perspective - I guess you have some connection with the retail trade?
Click to expand...

Indeed, I worked in retail for a couple of years - and its an interesting dynamic.

I want to categorically state that I don't believe that there is price fixing from the manufacturers, however also know that there would be repercussions to crashing the market which probably toe the line, but lets not think that this is restricted to this industry at all. It's no coincidence than many items have a RRP which is maintained throughout the year, and is then the same price across multiple retailers when it's promotion time.

Retailers get a lot of manufacturer support which they would be really silly to risk, so there is a collaboration rather than an implicit instruction - and generally it works better for the consumer in a roundabout way.

Also killing the market price doesn't necessarily make it better for a retailer, because they'll all be paying generally the same price for goods, dropping the price means there's less margin and if the market doesn't recover, and everybody follows suit you end up losing even more margin over time (because to be price leader, you'll have to keep dropping). So, it's a mechanism that actually benefits the retailers for sure, the manufacturers don't tend to make more money if that camera sells at £1,000 or £1,200 if they've sold it at the trade price. BUT that camera also has a 'market' position which makes it more or less competitive and benefits in that way.

Not sure if that explains much.
 
the black fox said:
It’s almost definetly going on in the used market to , i was looking for a lens last week and scouring the large used dealers they all had the item (in alleged same condition) within a a pound or so of each other . Now giving the fact that they should be buying in from different types of seller and quite often ripping us off in the process with PX offers it does make you realise , in fact try this one take a used camera or lens into a retailer for PX , the first thing they do is check the computer ,there must be a list out there that tells them what to offer .
I did eventually find my lens but from one of the smallest used dealers that offered a years warranty and it was over a £100 cheaper than any of the other used retailers . I can remember when shops sold there used items based on e.bay prices these days it seems that’s been superseded by mpb prices
Click to expand...
But is that any different to used cars being priced by reference to Glasses guide ? There is still scope for used dealers to haggle. It just seems that MPB is the starting point
 
Just out of curiosity how much would you say is a fair increase to buy from a high street retailer? I have often thought of opening a shop selling photography gear as the closest one to me is roughly 17 miles and I think there must be tons of people around who are in a similar position. Problem is though there also must be a reason there's not more of them.
 
scottduffy said:
Just out of curiosity how much would you say is a fair increase to buy from a high street retailer? I have often thought of opening a shop selling photography gear as the closest one to me is roughly 17 miles and I think there must be tons of people around who are in a similar position. Problem is though there also must be a reason there's not more of them.
Click to expand...
There is nothing fair about retail pricing. It is entirely determined by what the buyer is willing to pay. Shops (not just photography shops) are closing down because the prices the buyers are willing to pay will not keep them in business.
 
john.margetts said:
There is nothing fair about retail pricing. It is entirely determined by what the buyer is willing to pay. Shops (not just photography shops) are closing down because the prices the buyers are willing to pay will not keep them in business.
Click to expand...
Is this due to them paying the same here as the retailers abroad then having to pay vat etc which forces them to up their prices by a fair amount or is it because they're simply asking too much which is encouraging people to shop grey? Just trying to get my head around why the price gap is so huge as mentioned above.
 
scottduffy said:
Is this due to them paying the same here as the retailers abroad then having to pay vat etc which forces them to up their prices by a fair amount or is it because they're simply asking too much which is encouraging people to shop grey? Just trying to get my head around why the price gap is so huge as mentioned above.
Click to expand...

There's factors like currency - so when the pound is weak as it currently is that will help drive up prices .

Another one is where these products originate from - most come through distribution centres in Europe via the manufacturing plants in Asia. Grey importers have a whole load of logistics cut out of their chain.

Manufacturers are not fans of the grey retailers at all and there's little they can do to disparage apart from not offering assurances to customers around warranty etc - that's their only real deterrent they can use. It's an effective one, but money tends to talk!
 
scottduffy said:
Just out of curiosity how much would you say is a fair increase to buy from a high street retailer? I have often thought of opening a shop selling photography gear as the closest one to me is roughly 17 miles and I think there must be tons of people around who are in a similar position. Problem is though there also must be a reason there's not more of them.
Click to expand...
I can't answer your first question directly, but maybe I can offer some suggestions as to why there aren't many shops....

For a potential customer, visiting a shop is an investment of time. The more specialised the shop, the larger the catchment area, the greater the investment. So as a potential customer I want to be confident that (a) you'll have what I want, in stock; and (b) the overall experience of going to the shop will be better than buying online.

Physical shopping works best when there are multiple products that look as if they might meet my needs, and I can't really tell without examining them. But if I know exactly what I want, it's generally going yo be easier to buy online.

Hope this helps.
 
john.margetts said:
There is nothing fair about retail pricing. It is entirely determined by what the buyer is willing to pay. Shops (not just photography shops) are closing down because the prices the buyers are willing to pay will not keep them in business.
Click to expand...

Partially true - but it's also because the camera industry is nowhere near as big as it was 10/15/20/25 years ago. It's decreased massively over that time.

Whilst the cameras themselves have developed hugely in a technical sense, the vast majority of people are happy with what their phones can do and this has had a huge impact.

There's an argument that as people get more savvy they realise that they need larger sensors for truly better images, but that's a niche .
 
daffington said:
Partially true - but it's also because the camera industry is nowhere near as big as it was 10/15/20/25 years ago. It's decreased massively over that time.
Click to expand...

The photography market might be smaller but this is happening to most shops, I think the cold hard reality is the market has moved on and the high street is no longer competitive outside of convenience, impulse buys and where it makes sense (fresh food etc), then compare that to the trade offs of time wasted going there, no parking or it's expensive, poor selection etc. Eventually we'll even start to see all the mobile phone shops go and they probably account for something ridiculous like half the street!

This point was driven home quite neatly to me about a year ago, I popped to my high street to open a business bank account and not one bank offered the service, if I wanted to go ahead I'd have to either do it over the phone, via the internet or waste 1 hour travelling to a larger branch. Which sounds odd when you consider I'm in London.

Even if Amazon had not come along something else like it would have and most people agree it's a better business model for what it offers than the high street; forget what people say, just look at what they do.

Specifically with photography it's had to justify a specialist shop when people are so cost conscious, how many people use shops as a way to test equipment only to buy it cheaper online? Even profitable businesses get closed down (I think Calumet and Bowens were still profitable but correct me if I'm wrong).
 
Last edited:
I'm pretty sure Calumet had issues, I know they went bust in the USA first and think the timing for their buyout was good timing because their store in London was going to be demolished for HS2.

Your points are all valid though - but there are certain industries that have been impacted more by tech advances - and the camera market is one of those, I just tried digging out some stats and worldwide camera shipments were down 6x in 2017 vs 2010.

I guess that means we need 6x less stores! Add to the fact that to your points we now like to buy over the internet, and the additional issue that the market has with grey imports. It's an incredibly difficult market.

But doesn't mean that there isn't money to be made in it! I think Wex now they have encompassed Calumet are going to turnover in the region of £100m+ per year. But they are the biggest in the UK.
 
You must log in or register to reply here.
Back
Top