I am probably going to piss off Lee Morris and Patrick Hall and probably some of you with this post but there has been a lot of conversation lately, including multiple posts on Fstoppers.com, about ‘discounted,’ ‘gray market’ and ‘on sale’ cameras dramatically priced lower than their manufacturer’s suggested retail price (MSRP).
Some of you see a $2000 camera priced at $1499 and think, “Wow! What a deal!” And some of you also think, “What’s the catch?” Both are valid points and appropriate responses to these deep discounts. So what IS the catch? How can the same camera be sold by B&H for $2000 and another retailer sell it for $1499?
Knowing the difference and what you’re getting into with these deep discount cameras is extremely important when making a high value purchase, especially if this is your business. The $2000 camera and the $1499 camera are not exactly the same as you might assume and it comes down to the retailer, specifically the “Authorized” portion of the retailer and the differences in the product that creates.
An Authorized Retailer of a product is appointed by the manufacturer or main distributor to sell its products. You hear this term all the time in the electronics industry. Beyond the Apple Stores, Verizon Stores and Windows Stores, electronics manufactures have to sell their goods in 3rd party retailers such as Best Buy or Amazon. There is no Nikon or Canon store you can go to and pick up a 5D Mark III off the shelf. You go to Best Buy and buy it there, usually paying around the MSRP of the product + local sales tax if applicable.
So why can eBay sell me the same camera for $500 less?
Well there are a few parts to unpack here. First, eBay is not a retailer. Unlike Amazon who sometimes ships and sells items directly, eBay facilitates sales from other merchants. You’re not actually buying anything from eBay. You’re buying from a seller who uses eBay and PayPal for their online commerce. This is the reason eBay has services like ‘Buyer Protection’ policies, to protect buyers from sellers whom take advantage of them through mislabeled products or bad service.
The second part is you are most likely buying a ‘Gray Market’ or ‘Import’ product which undoubtedly lacks a manufacturer’s warranty that will be honored in your country. They are not ‘on sale’ as they don’t carry the same warranty card from NikonUSA and sometimes lack software, cables, batteries, etc. You are not getting an identical experience as you would if you purchased from B&H or Best Buy. The camera might be identical but it is a risk. You also take a risk with the merchant. eBay does not require merchants to denote an item if it is gray market. And merchants have been known to take forever to ship items or follow up with buyers and force them to buy expensive accessory packs in order to get their deep discount camera. This is not always the case though.
There are some differences between the manufacturers (Canon, Nikon, Sony, etc.) on who will honor gray market cameras with warranties, but NikonUSA will not. Some gray market merchants will offer their own warranties or offer 3rd party warranties but this comes with its own risk with stories of merchants flat out not honoring them or completely disappearing months after the purchase. NikonUSA will not even repair the product but there are some independent Authorized Nikon Repair stations that will attempt to repair gray market products.
So what? I don’t want to pay a $500 insurance policy on gear that isn’t going to break anyway. I still get the camera and I can download manuals and software from the web.
Here is some math. Let’s say there is an 80% chance your camera will never need to go back to Nikon for repair in or out of warranty. That’s $500 for a 20% chance something happens. I can see where people might think they wouldn’t want to pay an extra $500 to cover their butts and just pay $1500 again to replace their camera if something happened. But if you are a freelance photographer and your camera is your business, you want to mitigate risks, not increase it. What kind of business gambles with their main piece of equipment at 20%? If that’s your game, jump on the World Series of Poker.
And don’t even think about getting insurance on your gear. Most insurance agents require warranty cards and proof of purchase from authorized retailers. So if your gear is lost or stolen, you’re out of luck again.
Okay, I hear ya, but it’s a $500 savings now versus a 20% chance of paying another $1500 later.
It all comes down to risk and how much you want to take. If you are a hobbyist and just looking for a great deal, the risk might not be too high for you. Or if you have a lot of cash flow and are not worried about dropping another $1500 if the odds are not in your favor. Whatever your situation, have the facts, mitigate your risks and make smart business moves to keep the lights on and your camera working, it is your money maker after all.
Do you feel the gray market is worth the risk? Have you been burned by buying a camera through the gray market? Share your stories in the comments below.