The statements in the following post are the opinions of the writer, Nick Gilson, and do not necessarily reflect the official position of pictureline inc. Nick has been a pictureline employee since 2004. Please share your opinions in the comments below
There is no question that the face of photography retail sales is constantly changing, in large part due to the influence of the Internet. As with other industries, photography has its share of legitimate and non-legitimate Internet retailers all competing for your business. Search for any product and you are sure to find scores of different sites selling the same item at prices ranging from raw cost, to a variety of different margins of mark-up. The scammers are usually pretty easy to spot, and a quick check of a site like www.resellerratings.com can usually confirm the old adage, if it sounds too good to be true, it probably is.
These are particularly challenging times for brick and mortar camera stores. In order to provide a pleasant and effective shopping experience, there are a lot of things that need to fall into place. A building that has products to display, inventory to sell, is air conditioned in the summer, heated in the winter, and computers to manage the inventory all add up to a hefty price tag. Utilities and furnishings to make it comfortable, insurance, and credit card processing fees are all additional costs of doing business. And don’t forget the most important part…the employees. In order to maintain excellent customer service and help people choose the right camera for their needs, stores need knowledgeable, photographically literate salespeople. Getting this type of employee isn’t easy. Keeping them for any significant period of time is even harder, and it certainly isn’t cheap.
You may be asking where this is all going. The point I’m hoping to make is that brick and mortar camera stores in their very nature have a built in set of expenses that internet warehouses don’t necessarily share. An internet warehouse-type retailer doesn’t have to worry about a nice, comfortable showroom to display products in, or knowledgeable salespeople to help you figure out why camera A is better than camera B, and therefore best for your needs. All they have to worry about is getting someone who can walk over to bin 27 on aisle 3, box up the product, ship it out, and is willing to do it for minimum wage. The turnover is sometimes high, but it doesn’t matter, because the customer experience is measured by clicks of a mouse, not feet through the door.
Enter the power players from New York, who due to their massive size have the ability to buy cameras and lenses in absolutely massive quantities. With such huge quantities, these companies are able to use cost averaging techniques and strategic pricing schedules to artificially dictate supply and demand. It can work so well to their advantage that under perfect circumstances they can sell cameras at prices as low as other dealers buy them direct from the manufacturer, sometimes even slightly lower. When their warehouses are completely full of product, their prices get extremely low, and when they start to sell out of inventory, they adjust the price accordingly. It can be great from a price standpoint, and it puts smaller brick and mortar camera stores at an obvious disadvantage. It’s a business model that has worked for them, but is based on a philosophy that inherently doesn’t have your best interests at heart. But how does this system of manipulating supply and demand equal anything other than lower prices for the end user? And how is that a bad thing?
The entire system that mega-retailers employ is based on the assumption that they will always have plenty of equipment from manufacturers. They buy up a huge percentage of the available inventory, and sell it at whatever price they like. This changed in the weeks following the March 11 earthquake and tsunami in Japan. With the supply line essentially cut off, these same retailers raised many of their prices ABOVE normal retail. The price on the popular Canon 5D Mark II went from $2499 to $2699 (8% increase). The relatively inexpensive Nikon 35mm f1.8 DX lens went to $279, up from its standard price of $199 (40% increase). The Nikon 24-70mm f2.8 went up from $1889 to $2049 (8% increase) and the Canon 7D body jumped a seemingly modest $100, from $1699 to $1799 (6% increase). Now, with the massive flooding in Thailand, many industry veterans are watching closely to see if pricing is affected once again, particularly heading into the holiday season.
There is no question that in the grand scheme of things, the Japanese and Thai people have far more important things to worry about than getting camera equipment to consumers. With this in mind, it was particularly disturbing to see some greedy retailers willing to make an extra profit as a result of the fallout of this disaster. But do you know where you were less likely to see these types of price increases? The same type of local, brick and mortar camera stores that I spoke about earlier. That’s because they operate on a philosophy that relies on personal relationships with their customers. We recognize that while raising prices in a tight supply chain may work, and may seem like an attractive option, it is fundamentally wrong. It alienates you from your customer, the same one who you have spent all this time getting to know, building a relationship with. So I ask you, why would you want to support a camera store that doesn’t support you?
In tough economic times it becomes easier to see how different retailers are motivated. Do you want to support a camera store that focuses on building relationships, can be there to answer your questions if you have them, perhaps even help you send in gear for repair when needed? Or would you rather support a company that will try to starve out the competition, but then jack prices up on you the minute their infrastructure is shaken up? Given the choice I doubt very many of you would willingly choose the latter.
If you haven’t been to pictureline, please consider this your invitation to come meet us and see what we do. If you’re not in Utah, consider it an invitation to find the local camera store near you and visit them. Glazers, Samy’s, Arlington Camera, Tempe Camera, Keeble & Shuchat, and Mike’s Camera are just a few great examples. There may not be the numbers that there used to be, but I promise, there are still plenty of local and regional camera specialty stores just waiting for the opportunity to support you the way you deserve. You just need to come out and find us.