Luminous Landscape Forum

Equipment & Techniques => Digital Cameras & Shooting Techniques => Topic started by: lfeagan on May 03, 2012, 12:46:19 am

Title: D800 Price Gouging
Post by: lfeagan on May 03, 2012, 12:46:19 am
While browsing eBay today I decided to see how many people had purchased D800Es for the purpose of selling them at an inflated price (scalping). While I have no issue with an individual buyer doing this (what they do with their camera after they buy it is their choice), it seems like a Nikon dealer from San Jose has decided to jump into this lucrative market as well. In total this seller has 4x D800 and 5x D800E listed (when I looked earlier today). The seller is asking 30% more than Nikon's MSRP ($4k and $4.5k).

http://www.ebay.com/sch/deffu/m.html?_nkw=&_armrs=1&_from=&_ipg=&_trksid=p3686

I find this sort of behavior on the part of a dealer rather distasteful. I was wondering if anyone knows about Nikon's contract with authorized retailers, Internet-sales, and pricing. Even though Nikon isn't full of saints, I don't suppose they condone of a dealer scalping. If all dealers were to engage in this sort of behavior, the supply equation could be altered significantly keeping prices artificially high nearly indefinitely. In the long run, this would impact Nikon's image vis-a-vis their retailers behavior.
Title: Re: D800 Price Gouging
Post by: Thomas Krüger on May 03, 2012, 01:49:06 am
On Amazon.de somebody (probably from Nigeria) is offering the D800 for 2498 Euro, that's 400 Euro below the Amazon price.
http://www.amazon.de/gp/offer-listing/B00763MHB4/ref=dp_olp_new?ie=UTF8&condition=new
Title: Re: D800 Price Gouging
Post by: ckimmerle on May 03, 2012, 10:43:12 am
It's simple supply and demand. This camera has almost unprecedented popularity (everyone thinks it magically makes all images better because it's 36mp) so dealers can charge what they want. If someone wants it badly enough, and there are people who do, they will pay the higher price.
Title: Re: D800 Price Gouging
Post by: Slobodan Blagojevic on May 03, 2012, 11:35:13 am
... Even though Nikon isn't full of saints, I don't suppose they condone of a dealer scalping. If all dealers were to engage in this sort of behavior, the supply equation could be altered significantly keeping prices artificially high nearly indefinitely. In the long run, this would impact Nikon's image vis-a-vis their retailers behavior.

If I were Nikon and noticed "indefinitely" higher prices, I would charge my dealers higher prices too.

If I were the government, I would step in and provide affordable financing to those in dire need of the latest and greatest gizmo.

If I were UN, I would add it to the list of basic human rights, as the right to immediately participate in the latest break-throughs in humanity's technological advancements.
Title: Re: D800 Price Gouging
Post by: Colorado David on May 03, 2012, 12:13:09 pm
I don't really think there is such a thing as scalping.  The value of something is what a willing buyer and a willing seller agree on.  No one forces someone to buy at those prices.
Title: Re: D800 Price Gouging
Post by: lfeagan on May 03, 2012, 02:09:27 pm
The value of something is what a willing buyer and a willing seller agree on.

An item's value is not equal to what a single buyer is willing to pay. As a util good, the value is equal to the economic output it enables the possessor to achieve. If the perceived value of an item is high, then a seller can demand a high price. Additionally, the willingness of a single buyer to pay an exorbitant price does not instantly convey a similar value to all such goods. One needn't search far for evidence of this.

I am not trying to be rude here. Just trying to point out that value is more complex than what a single buyer and seller agree on for the price.
Title: Re: D800 Price Gouging
Post by: Slobodan Blagojevic on May 03, 2012, 02:34:54 pm
... what a single buyer and seller agree on for the price.

And who is talking about "single buyer"!?

If you are referring to Colorado David, he most likely used the term "willing buyer" as a generic term for demand. And it is absolutely clear that there is way more than a "single buyer" interested in D800. And it is further absolutely clear that "the perceived value of D800 is high", thus enabling higher demand and price.
Title: D800 not available as soon and as cheap as some people wish
Post by: BJL on May 03, 2012, 02:59:05 pm
Unless you can persuade me that Nikon or this camera dealer have put some people in a position where they
(a) need, rather than want this camera, and
(b) need it now rather than in a month or two, when they will be able to get it from a wait-listed order,
then I really do not get your point.

Also, the idea that the value of an item like this is measured purely by "the economic output it enables the possessor to achieve" is amazingly unrealistic.  Is this an abstract theoretical dogma that some economists preach, along with the bizarre idea that economic activity can be modeled by assuming that most economic decisions are made on a purely rational basis? By that measure, a pure amateur like me is entitled to become the possessor of any new camera for free, while, given the return that this camera likely will deliver to some skilled professional users, Nikon is severely underpricing it to them.
Title: Re: D800 Price Gouging
Post by: lfeagan on May 03, 2012, 05:21:51 pm
@BJL: A rational buyer compares their perceived value with the seller's asking price. If the value far exceeds the price, then the decision to buy is quite obvious. If value is far less than the price, then clearly you should not buy. If value ~= price, then there is a tough decision to be made. Purchasing for any other reason is foolish.

Photography, even for enjoyment, has a measurable value. If you did nothing you enjoyed with your life, other aspects would suffer. If you only did things for pleasure and never earned any income, you would have an income shortage. There is a balancing point in hobby photography where the enjoyment enables us to continue in other necessary facets of life. Enabling this balance has a monetary value. Even though the act of participating in hobby photography has no direct economic output, indirectly it enables us to earn income in other areas for extended periods of time.

Also, I believe point b is assuming that wait-listed orders will become available at some point in time for a particular price. I was never under the impression that a pre-order in any way contractually obligated them to sell you a device at any price at any time.

Lastly, you seem to misunderstand value. Value is what you obtain from an item you possess. Price is what a seller charges you to obtain that value. If, as an amateur, you choose to obtain little value from an item, that is your choice. The price a seller demands does not necessarily change in response to your achieving little value from the item. In the software world, this sort of value vs price discussion becomes all the more interesting as after the development work has completed the per-unit cost is nearly zero--all the cost was upfront in the development work. The development cost difference from the basic to the pro version is insignificant and yet the price to the buyer may be doubled. This is because the functionality in the pro version may significantly improve the value of the software. Hardware, such as a camera, obviously has a non-trivial cost to produce each unit sold, which must be recouped.
Title: Re: D800 Price: if people make a rational voice to but, what is the problem?
Post by: BJL on May 03, 2012, 05:30:50 pm
A rational buyer compares their perceived value with the seller's asking price. If the value far exceeds the price, then the decision to buy is quite obvious. If value is far less than the price, then clearly you should not buy. If value ~= price, then there is a tough decision to be made.
Exactly! So the people who make a rational choice to pay these prices (above MSRP) in order to get a D800(E) quickly are judging that value to them is at least the asking price. Or more specifically, that the added value of getting it now rather than getting it later at a somewhat lower price justifies paying the higher price.

What is the problem, and what has any of this process of some people _choosing_ to buy a D800 at this price in order to get it sooner got to do with accusations of "gouging"?
Title: Re: D800 Price: if people make a rational voice to but, what is the problem?
Post by: ckimmerle on May 03, 2012, 05:35:00 pm
Exactly! So the people who make a rational choice to pay these prices (above MSRP) in order to get a D800(E) quickly are judging that value to them is at least the asking price.


+1
Title: Re: D800 Price Gouging
Post by: lfeagan on May 03, 2012, 11:28:44 pm
@BJL: Like I said in my first post, I have no problem with the prices. My question was whether anyone familiar with Nikon's dealer contracts could comment on maximum price limitations set on dealers.

The only sentence in my post that even remotely looks like it is seeking a response was:
Quote
I was wondering if anyone knows about Nikon's contract with authorized retailers, Internet-sales, and pricing.

It would be nice if someone with knowledge of these contracts would respond rather than folks who believe that I am looking for insight into economic forces, which I am not. Feel free to not respond if you are not familiar with the current Nikon dealer agreement.
Title: Re: D800 Price Gouging
Post by: EinstStein on May 05, 2012, 04:01:22 pm
Get used to it, Ifeagan, this forum and many internet forums are the place full of philosophers, politicians, psychologists, ..., and some photographers. You could get irrelevant comments and critics before you get what your need.
This is a good place for people watching, enjoy while you are waiting for your answer.

   
Title: Re: D800 Price Gouging
Post by: BJL on May 05, 2012, 05:55:46 pm
@BJL: Like I said in my first post, I have no problem with the prices.
Your subject line uses the word "gouging", which is surely a criticism, and your subsequent arguments about value and such make no distinction betwen the actions of a private seller and that of a single dealer, bearing mind that there are many others, so no dealer is anywhere close to a monopoly, which is the only situation where I would consider gouging to be an issue.

By the way: as far as I know, US laws do not allow a company like Nikon to impose prices on retailers: a maximum price, just like a minimum price, is viewed as illegal price fixing. I am not sure about that though.
Title: Re: D800 Price Gouging
Post by: Fine_Art on May 06, 2012, 03:02:36 am
Get used to it, Ifeagan, this forum and many internet forums are the place full of philosophers, politicians, psychologists, ..., and some photographers. You could get irrelevant comments and critics before you get what your need.
This is a good place for people watching, enjoy while you are waiting for your answer.

   

LOL.

Meanwhile I wait for the cloud to move from in front of the supermoon....

;-)
Title: Re: D800 Price Gouging
Post by: marcmccalmont on May 06, 2012, 06:23:02 am
Jim Lackey of Brightscreen called, said he just got his first 800E in and offered it to me at retail, no gouging.
Marc
Title: Re: D800 Price Gouging
Post by: Slobodan Blagojevic on May 06, 2012, 12:13:17 pm
... this forum and many internet forums are the place full of philosophers, politicians, psychologists, ..., and some photographers...

And you fit in... where?

If photographer, where can we see it?
Title: Re: D800 Price Gouging
Post by: Slobodan Blagojevic on May 06, 2012, 12:28:47 pm
... folks who believe that I am looking for insight into economic forces, which I am not...

That's only too unfortunate, as it looks like you do need it.

Look, if the only thing you needed was an answer to your one-sentence question, then next time make your post a one-sentence question, instead of a moralizing rant.
Title: Re: D800 Price Gouging
Post by: Wayne Fox on May 07, 2012, 02:54:14 pm
@BJL: Like I said in my first post, I have no problem with the prices. My question was whether anyone familiar with Nikon's dealer contracts could comment on maximum price limitations set on dealers.

The only sentence in my post that even remotely looks like it is seeking a response was:
It would be nice if someone with knowledge of these contracts would respond rather than folks who believe that I am looking for insight into economic forces, which I am not. Feel free to not respond if you are not familiar with the current Nikon dealer agreement.
As an authorized Nikon dealer in the US, I can tell you that while Nikon recently instituted a minimum price point a dealer can sell at, there are no restrictions in the agreement as to how much you can charge.

so the decision is the dealers ... if they want to make a few extra bucks at perhaps the expense of reputation and customer loyalty they are free to do so.  Unfortunately with all the internet based companies now, many don't focus much on customer service and loyalty as they assume there are plenty of other customers out there.
Title: Re: D800 Price Gouging
Post by: lfeagan on May 08, 2012, 01:22:52 am
Hi Wayne,

Thanks for your response.
Title: Re: D800 Price Gouging
Post by: Petrus on May 08, 2012, 06:31:30 am
As an authorized Nikon dealer in the US, I can tell you that while Nikon recently instituted a minimum price point a dealer can sell at, there are no restrictions in the agreement as to how much you can charge.

Is that a legally binding contract, or just that you are not allowed to advertise a low price. You know: call/e-mail for a quote...

Is that not also price fixing?

Certainly Nikon could serve those retailers who refuse to toe the line a bit slower than more compliant ones, but do they have a bigger stick also?

Just curious.
Title: Re: D800 Price Gouging
Post by: kuau on May 08, 2012, 07:33:06 pm

I use to work for a Authorized Nikon Dealer and I know for a fact there is very little margin for the dealer, actually in all camera gear. To me it's amazing there are still brick and mortar camera stores anymore.
Where we made most of our money was on accessories, memory cards, bags, etc, the small stuff. On camera and lenses alone there is no way a camera store can stay in business. The numbers are just not there.
So to see a dealer selling new D800's on ebay for 25-35% more does not surprise me at all.
In the mean time I am still waiting from my D800E I ordered from amazon on the day it was announced. Still no delivery date, but I will pay MSRP for it.


As an authorized Nikon dealer in the US, I can tell you that while Nikon recently instituted a minimum price point a dealer can sell at, there are no restrictions in the agreement as to how much you can charge.

so the decision is the dealers ... if they want to make a few extra bucks at perhaps the expense of reputation and customer loyalty they are free to do so.  Unfortunately with all the internet based companies now, many don't focus much on customer service and loyalty as they assume there are plenty of other customers out there.
Title: Re: D800 Price Gouging
Post by: Wayne Fox on May 09, 2012, 03:37:22 pm
Well, binding in the fact that you can lose your dealership. I believe Nikon has realized that all dealers need to be protected from the large Internet retailers who still also have a huge advantage because of the sales tax issue. Nikon and others still  do things that hurt specialty dealers like shipping d800's to best buy stores costing small retailers sales.

 dealers will sell the brands where they have good margins if possible. So a new buyer vacillating as to what brand to buy may get pushed toward Sony where margins are good. Nikon now falls in that same category. Whether canon will follow suit remains to be seen.  No one knows for sure if Nikon will actually enforce the policy if b&h or others decide to again squeeze Nikon for lower prices so they can under sell other dealers, it's a pretty recent development.

This isn't price fixing.  Nikon has every right to do this. Many other companies have strict pricing policies.  Price fixing is where two competing businesses agree to pricing strategies. there is no collusion between camera makers.
Title: Re: D800 Price Gouging
Post by: ndevlin on May 10, 2012, 11:27:28 am

Nikon, and all others, have "MAPS" - minimum advertised prices.  There is no maximum price, for obvious reasons.

And yes, it's price-fixing, but apparently legal because it fucks only consumers, and not other large corporations  ;)

@lfeagan.  Your position makes no sense.  I have something, you want it. It's value *to you* is what you are willing to pay me.  Say you leave for a once-in-a-lifetime Antarctic  expedition next week and can't get an 800E.  I'll bet you'd pay a heck of a premium to buy mine. In fact, I'd bet you'd rent it for two weeks for far more than the premium most of the internet re-sellers are asking.
 
The price will settle when supply matches demand.  It's kind of like gravity. Fight it if you want, but you will only get tired and lose.


Cheers,

- N.
Title: Re: D800 Price Gouging
Post by: marfa.tx on May 10, 2012, 01:53:27 pm
to be "correct", it is demand of demand...
Title: Re: D800 Price Gouging
Post by: marfa.tx on May 10, 2012, 02:01:20 pm
... it seems like a Nikon dealer from San Jose ---

Is "he" a dealer? I've asked him, since he said he bought it...

My sense is that someone selling NEW, when they aren't a dealer/wholesaler, is suspect. That may be of interest to Nikon and Ebay...



and he responded, quickly -- "I am not" (him)


// abd
Title: Re: D800 Price Gouging
Post by: Wayne Fox on May 12, 2012, 03:05:35 pm
And yes, it's price-fixing, but apparently legal because it fucks only consumers, and not other large corporations  ;)


I respectfully disagree.

This is not price fixing ... any company is free to charge whatever they would like for their product.  Price fixing is only when competing companies collude to control the price of a product or service in a free market.  I don't believe Canon, Nikon and Sony have gotten together to try and do this.  This is what is illegal. 

As a small camera retailer this move means I will continue to sell Nikon cameras and in fact will try to sell them equally as hard as I do Sony.  Nikon does not make any more money from an enforced pricing policy, but it does allow small dealers to compete.  What this does is redistribute the product through the channel and local dealers are an important part of their channel (as they have discovered over the past few years as that channel has eroded). This also helps slow the monopolistic practices of large internet retailers. 

Nikon was in danger of losing local presence in its' dealer channel. Not good for Nikon or even the large internet retailers, since we are their "showroom".  I frequently have customers come in to my store, spend an hour or so of my employees time "thinking" about which camera to buy or checking out a new camera, only to leave saying "they'll be back", which of course they never are.  Before this change my margin on a Nikon to compete with large "corporations" (not the manufacturers) was under 5%. Throw the 3% merchant service on there and now we're at 2%. Yes, every Nikon I sold lost me money, and everyone made money in the process except me (Nikon, Nikon USA, the credit card companies). That's a lot of cash-flow tied up in inventory that has no chance of helping cover costs.  It's not like the margins at MAP are that great anyway, but at least I'm not losing money.

In the U.S., the sales tax issue is really the biggest problem.  If the large internet retailers didn't have a huge price advantage by avoiding the collecting of sales tax, things would be dramatically different.

As it stands Canon is the only one who has not enforced MAP, but then again right know it appears most retailers are selling close to MAP or higher.  We'll see once production ramps up to surpass demand ...
Title: Re: D800 Price Gouging
Post by: Peter McLennan on May 12, 2012, 08:08:58 pm
In the U.S., the sales tax issue is really the biggest problem.  If the large internet retailers didn't have a huge price advantage by avoiding the collecting of sales tax, things would be dramatically different.

This will change.  It has to.  I can't say that I welcome it, living in the boonies and being a frequent online customer, but it's gonna come.  It's only fair.