jbk224 Loc: Long Island, NY

You are right about the quality of the equipment and personal risk acceptance level.
You are wrong about employment/jobs. Let's say Nikon does not set up an import and service company in the US. Let's say they don't employ anyone to do anything..including marketing their equipment. How would you know about their products? How comfortable would you be buying, on-line, an 'expensive' piece of equipment that you have no US recourse if you actually had a purchase or product quality problem. We do not operate in a vacuum. There are consequences to all decisions. Some more important than others. Some more costly than others.

alexol

I think it depends on what proportion of total sales are through the agent and what proportion through gray market sellers. The gray market sector needs to be (and I believe is) big enough to support independent repair shops but neither so large as to displace main agents nor so small that it isn't worth setting up independent shops.

If someone buys say a gray market lens, the mothership in Japan (or wherever) is happy, the agent isn't, the purchaser is - assuming it doesn't break.

If this same person can't afford the agency price and there is no gray market item, he/she will buy another brand (or used) which obviously is of no benefit to the manufacturer. Possibly worse than simply no benefit as the purchaser will now taste Player 2 an alternative manufacturer's goods, risking market share for Player 1.

I see it as a zero sum game in totality, but different people will be happy/unhappy, depending.

burkphoto Loc: High Point, NC

All's fair in love, war, and marketing!

From the manufacturer standpoint, yes, absolutely, you need local dealers. Those dealers cost money on top of the product costs, shipping costs, warranty repair costs, and marketing/advertising costs. So yeah, it's fair to jack the price up to cover those costs and make some profit. That's how capitalism works.

From the user/consumer standpoint, however, buying from a regional distributor or dealer may NOT make economic sense! Only the buyer can make sense of the terms of purchase, based upon individual circumstances. That's why the gray market exists.

As a consumer of gray market gear, you bet the product will last as long as you need to use it. When it fails, if it fails, you're willing to A) Replace it. B) Send it to the dealer or country of origin for service. C) Sell it to an independent repair station for parts. Perhaps originally, it was part of a business capital expense, and by the time it fails, it's fully depreciated. Maybe you sell it on the used market once it is fully depreciated, BEFORE it fails, if it is still worth something to someone else.

As a consumer of USA warranted goods, you figure the hassle of repairs will hit you somewhere on the sides of the "bathtub curve." (Most products fail when new, or near the end of their useful lives. The bottom part of the bathtub curve — the time between warranty expiration and end of useful life — has a relatively low risk, unless it's a Fiat Chrysler or Mercedes product.) The warranty covers the first (high risk) part of the bathtub curve. You're on your own after that, unless you fall for an extended warranty.

If you buy the USA warranted product, it's probably because you don't want the hassle of an unexpected repair. That's perfectly valid! But it's also valid to buy gray market gear and accept the risk.

In 1980 through '82, I bought six Nikkor lenses for my [employer's] F3 bodies. They were all gray market items. Not one of them failed during the warranty or the depreciation period. Two were stolen. One needed service after 15 years. The others were sold used. Was I stupid? Immoral? Unethical? No. I did the best I could for my employer — I got six lenses for the price of four or so.

These days, I buy used gear. I figure, the reputable dealers I buy from have checked it out, repaired or refurbished it, and it's past the front part of the bathtub curve. AND, they warranty it for six months! Some other owner took most of the bathtub curve risk and the depreciation hit for me.

jbk224 Loc: Long Island, NY

You may be correct in your logic, but it is not relevant. The only question is whether there is value in having on-site/in-country sales/marketing/service. And whether this justifies the higher product cost.

alexol

Please refer to the original post. It had nothing to do with "whether there is value in having on-site/in-country sales/marketing/service. And whether this justifies the higher product cost" - it was related solely to employment effects in the US.

jbk224 Loc: Long Island, NY

And I guess if the product price was not higher than you can purchase grey market; there would be a building in Melville, NY that is now owned and occupied by Nikon? Or that there are a great number of employees in that building; including marketing support and service? And that they go out the the PDN shows and set up booths to promote their products and meet their customers? Not to mention other locations owned and operated by Nikon USA. Would you say this has anything to do with employment?

alexol

As I said previously:

"I think it depends on what proportion of total sales are through the agent and what proportion through gray market sellers. The gray market sector needs to be (and I believe is) big enough to support independent repair shops but NEITHER SO LARGE AS TO DISPLACE MAIN AGENTS nor so small that it isn't worth setting up independent shops."

The situation is not main OR gray, by their very existence gray has demonstrated satisfactorily that it is main AND gray.

Similarly, I'm sure my local BMW dealer with their $150/hr labor charge would like the local (much better) BMW specialist shops to go out of existence too.

Let's take a REALLY simple case of a company of 100 people, including a receptionist, an accountant & a salesman & 50 technicians + various others. One person decides he's going to set himself up as a gray market provider.

The first company is now 99 people.

The new company is the original one guy, but now he needs to add a receptionist, an accountant and a salesman and he'll need a tech or two. His company is now 6, occupying two buildings, not one, etc.

Total employed: 106 versus 100 last week.

Separate companies doing the same thing INCREASE employment. That's why companies amalgamate to increase efficiency, a euphemism for "get rid of headcount".

jbk224 Loc: Long Island, NY

This is a simplistic analogy. We are talking about pricing decisions regarding products-not services, that are available as grey market. Is there a justification for having higher prices in other 'places'. And, should pricing and/or services be the same wherever you reside. This is a macro question and cannot be justified with micro answers. Your example is about service from an 'authorized' or 'non-authorized' agent who is not the manufacturer. It is not about the cost of the original product. In your example the car has already been purchased..who is going to service it now? And again, with your example..I live within 3 miles of two BMW dealers. And 12 miles for three (one of which I purchase my cars. )I bring my cars for warranty service to them directly and get a loaner car for free. I give my car to my local repair shop when there are non-warranty items that must be attended to. i.e. nails in my tire or oil change out (seldom). My guy is great and cheaper. This has nothing to do with the purchase decision of the car and has no affect whatsoever on BMW's pricing decisions.

Budgiehawk

They do the same with drugs manufactured in the USA and sold everywhere else for less.

jbk224 Loc: Long Island, NY

Drug pricing is political and economic. Companies are protected for a certain time period regarding the sale of their product into the country of 'origin'. Companies do have intellectual property protected for a certain amount of time. Otherwise, why put in the R&D to develop the product? And there are companies that hijack the process and manufacture and sell before the patent expires for general world wide production. The timeframe for this is influenced by the 'drug lobbyists' in every country. And then there are the tax laws in each country that affect pricing. And then there are politics that affect pricing. Medicare is not allowed to negotiate with companies outside the US to provide medication. Why not? Politics and $$$.
While you may think similar to grey market products..not the same at all. It's not like Nikon makes the Z6 and someone else copies it and sells it for less.

alexol

I agree - the car comments were completely irrelevant and I drifted way off topic, as you say service rather than product.

My VERY simplistic company analogy is however correct (as the OP relates to employment and no further), and that is where I will leave the conversation permanently as this poor horse has been beaten unproductively for long enough;)

hankswan

I really have a hard time finding justification for the repair policies of several of the leading camera makers. It is easily within the realm of possibility for a camera user to purchase a camera in a country that is not his home country. Suppose you are traveling either for pleasure or business and your camera is lost, stolen, damaged beyond repair, or just quits working and it is absolutely necessary to have a photographic record of your travels. You find a camera store and buy a replacement. You now have a camera that is new but not covered by the manufacturer. How wonderful to spend thousands of dollars on a camera that You cannot get repaired under warranty or in some cases not at all unless you send it to be repaired in a country that is not your own. This is not service to the customer. A big knotty problem. It should not be this way.

rmorrison1116 Loc: Near Valley Forge, Pennsylvania

Marketing and availability plus KMZ and Zenit cameras are a little behind the times compared to the Japanese companies.
Why don't I buy and use Russian photography products? Because I don't have to. What else is there to figure out and what does any of that have to do with grey market and mandatory purchasing of warranties?!

rmorrison1116 Loc: Near Valley Forge, Pennsylvania

Save the receipt. If you can prove you purchased from a certified retailer, the warranty will be honored, but you may still have to pay a premium for "factory service" in the USA. Another option is to buy Canon. Canon USA service will repair any Canon product purchased anywhere, for a fee.

Zeke4351 Loc: Kentucky

All grey market sellers are not the same. Some advertise the lens being the import model and sell it like 200.00 under normal price. When the lens comes to you it is a US model with all warranty and all paperwork that comes as a US model. Sigma and others get the same money for their products no matter who buys them. You have to know where to buy and read between the lines on their advertising.