• Joe

industry news

I would like to spend some time talking about the photography business, which has been dear to my heart for over 10 years now. Naturally, I could have written about the photographic sales industry at any point since 2008. But right now is particularly important. Or at least, it’s a good opportunity.

In April, a 7.0 earthquake shook Japan, killing 49 people, injuring 3000, and displacing more than 44,000. It also shut down all four of Sony’s imaging sensor production facilities. Since the majority of the camera industry runs on Sony sensors, we are now experiencing a severe lack of products from nearly all manufacturers. What we, in the American public, are learning is the fragility, the interconnectedness, and the short delivery line that exists in our industry.

There have been two trends in purchasing camera equipment in the last eight years. The first has been to buy grey market products. These are cameras of dubious origin. Sometimes they are described as having an “international warranty” or a “store warranty” or are a product that you then have to buy back the manufacturer’s battery and cables and other bits and pieces. They are brought in from other markets, usually Korea, and sold in the states. But they maintain their Korean (if any) warranty. Additionally, they are not covered by the manufacturer outside of their original area.

There are no related photos for this post, so here's a parrot.

The reality is that all manufacturers publish lists of authorized dealers. You can rely on this list to know who is selling the real product, brought in legitimately, accompanied by the real US warranty. And yes, if you are European, an authorized retailer would have your local, European warranty. To police this list, there are distribution contracts with each retailer called MAP, or Manufacturer Assured Pricing. According to the contract they are required to sell the product at a guaranteed price, without deviation. This is why, when you look at any product on shopping sites, many of them are identical. It is a protection program so that consumers know, just by a glance, if they are getting the real product. Let’s face it, we’re putting down good money for our gear. Let’s make sure we’re getting the real thing.

The second trend has been to buy online. Now, at least many smart shoppers go to online authorized retailers, people who are a part of MAP. That’s a step in the right direction. But we need to be careful here too. Many people know what a monopoly is: a single seller of an item. We have a history of legislation designed to break apart organizations from being the only sellers of items because inevitably someone suffers. This someone, in the case of monopolies, is the consumer, as they cannot fight back against rising prices. But there is also an economic term called a monopsony. This is, in a direct translation, a single buyer.

For a non photographic example, let's briefly examine the chicken and beef industries. Today there are only four companies buying the live animals in America. If a producer needs a middleman to get his product to a consumer (as in the case of live chickens or cattle) and if the number of buyers to whom he can sell decreases, what do you think will happen to his bottom line? It will plummet. There has never been a worse time in America to be a cattle or chicken rancher, and it’s not because people are eating less meat. For more on this please read The Meat Racket by Christopher Leonard.

As we have discovered, the camera industry is amazingly interconnected. Someone makes the screens, someone else makes lenses, someone else (usually Sony) makes the sensor, someone makes the processors. Oh, and by the way, the camera industry runs, like many parts of the electronics world, on very small margins that pair with high R&D costs. In the last several years consumers have shifted to buying items from either dubious (and I would say unsavory and disingenuous) retailers who bring in grey market products and try to avoid MAP, or from one or two major online legitimate retailers.

Also this is a tiger, you know, to break up the text.

This has had a profound effect on the local camera store. The employees there have moved into the phone industry, or some other job market, not out of a lack of passion, but a lack of confidence in their economic future. Stores have shuttered, in fact, whole chains have collapsed. What happens if the local camera market vanishes? Then we will have a monopsony on our hands. Unlike a monopoly, the devastation will predominantly hit the manufacturers as the buyers of the products will have complete contract negotiating power. Gone will be their profitability, gone will be their budget to do quality R&D, gone will be the capacity for new and innovative companies to enter the community. I certainly want more from the industry researchers than periodic updates of the Nikon D7200 for the rest of time and I hope you do too. I want local experts to have economic viability and to be able to add their voices to the greater conversation. Where else will you go for real human advice? Where else will you go to get your hands on gear before purchasing? Where else will you go to be part of the photographic community? Local camera retailers are not a one way service center, they are part of a symbiotic relationship that adds value and creativity to your photographic experience.

My requests of the camera consumer:

  1. Buy local. For everything. As often as possible. If it’s a product they don’t have a distribution contract for, then go online. Feel free to check online legitimate retailers and, if you find a discrepancy, ask for a price match. Sure, that’s fair, but give first right of refusal to local.

  2. Always buy MAP. Grey market dealers are just a legal hair splitting away from scam artists.

  3. Get to know your local experts at the camera retailer. Ask them to speak at your photo club, to host a camera club meeting, or to sponsor shooting events and educational events. There is a tendency towards lethargy in the camera retail world and they should constantly be searching for exciting new avenues of expression.

  4. If you do not live in a town with a local retailer, find the closest town with a camera retailer and shop at their website.

Camera manufacturers are afraid of continued retail contraction, especially one so severe that it could be called a monopsony. What we all need to remember is that what we buy is as important as where we buy it from. When you purchase a product, you purchase two things: the product and the viability of the store where you purchased it. Caveat Emptor.

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