Prices...What The...???

Started Apr 14, 2011 | Discussions
moimoi
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Prices...What The...???
Apr 14, 2011

Hi to everyone,

I am not sure if you are following, but prices for Nikon lenses (specially pro glass) are becoming less and less reasonable. I am not sure whether it is due to a strong yen vs. weak American dollar or not, but buying 2995.00 USD for the 70-200 F/2.8 VR II is absolutely ridiculous.

I have been checking the prices for professional glass, and that's just nonsense. There has been at least a minimum of 200 USD increase for a 24-70mm f/2.8 for instance. Same thing happened with the D700, which is now overpriced on Amazon.

What are you opinions regarding this issue? I would be very much interested in your point of views. What are your expectations in a near future? Will you still keep buying pieces of equipment even though the price still increases?

Thanks,

Max

 moimoi's gear list:moimoi's gear list
Canon EOS 6D Canon EF 70-200mm f/2.8L IS II USM Canon EF 35mm f/2 IS USM
Jogger
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Re: Prices...What The...???
In reply to moimoi, Apr 14, 2011

ummm... you may have heard of that 9.0 earthquake, tsunami, and on-going nuclear incident that happened a month ago...

that and you can thank Quantitative Easing 2.0 ... i.e. printing money to devalue the US dollar to make imports for expensive

moimoi wrote:

Hi to everyone,

I am not sure if you are following, but prices for Nikon lenses (specially pro glass) are becoming less and less reasonable. I am not sure whether it is due to a strong yen vs. weak American dollar or not, but buying 2995.00 USD for the 70-200 F/2.8 VR II is absolutely ridiculous.

I have been checking the prices for professional glass, and that's just nonsense. There has been at least a minimum of 200 USD increase for a 24-70mm f/2.8 for instance. Same thing happened with the D700, which is now overpriced on Amazon.

What are you opinions regarding this issue? I would be very much interested in your point of views. What are your expectations in a near future? Will you still keep buying pieces of equipment even though the price still increases?

Thanks,

Max

 Jogger's gear list:Jogger's gear list
Sony RX100 Sony Cyber-shot DSC-RX10 Nikon D700 Nikon Df Nikon AF-S Nikkor 70-200mm f/2.8G ED VR +4 more
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moimoi
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Re: Prices...What The...???
In reply to Jogger, Apr 14, 2011

Jogger wrote:

ummm... you may have heard of that 9.0 earthquake, tsunami, and on-going nuclear incident that happened a month ago...

that and you can thank Quantitative Easing 2.0 ... i.e. printing money to devalue the US dollar to make imports for expensive

Indeed but such reasons cannot explain the whole story. In fact, I would have expected lowering price to favor/boost sales.

I would be interested to find out what has been the impact on the sales due to this price raise.

 moimoi's gear list:moimoi's gear list
Canon EOS 6D Canon EF 70-200mm f/2.8L IS II USM Canon EF 35mm f/2 IS USM
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moimoi
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Re: Prices...What The...???
In reply to moimoi, Apr 14, 2011

In any event, I would stop buying unless there is a major cut in price.

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tyyreaun
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Re: Prices...What The...???
In reply to moimoi, Apr 14, 2011

moimoi wrote:

Indeed but such reasons cannot explain the whole story. In fact, I would have expected lowering price to favor/boost sales.

I would be interested to find out what has been the impact on the sales due to this price raise.

What can't it explain? Supply was disrupted by what's going on in Japan. The earthquake, nuclear issue, and especially the lack of consistent power supply (rolling blackouts) have caused many of the plants to shut down, or greatly reduce output. This includes plants that manufacture the high-end glass and bodies, as well as plants that manufacture precision components that are then used to assemble consumer-level glass and bodies in China and Thailand.

Nikon's probably charging the same wholesale prices as before to the retailers, but the retailers realized that supply is drying up and they can charge full MSRP - or much more, in the cases of some less scrupulous shops.

That's supply and demand - basic microeconomics. You're saying they should decrease prices to boost sales. They don't have the inventory available to support the boosted sales.

Anyway, high-end glass is either a luxury product to higher-income consumers, or a business necessity to professionals. Either way, it's going to be a inelastic market, not sensitive to price changes, so it wouldn't make much sense to lower the prices regardless of supply.

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rudyr
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Re: Prices...What The...???
In reply to tyyreaun, Apr 14, 2011

THIS - spot on!

Anyway, high-end glass is either a luxury product to higher-income consumers, or a business necessity to professionals. Either way, it's going to be a inelastic market, not sensitive to price changes, so it wouldn't make much sense to lower the prices regardless of supply.

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A. Westreich
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Re: Prices...What The...???
In reply to moimoi, Apr 14, 2011

It's called a free market. Prices are never based on anything "reasonable" except in the sense that someone is willing to pay them. Short supply (or anticipated short supply or even perceived short supply caused by. . . say . . . an earthquake and major nuclear crisis) coupled with high demand is going to lead to higher prices because people who need those items will be willing to pay.

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moimoi
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Re: Prices...What The...???
In reply to tyyreaun, Apr 14, 2011

tyyreaun wrote:

moimoi wrote:

Indeed but such reasons cannot explain the whole story. In fact, I would have expected lowering price to favor/boost sales.

I would be interested to find out what has been the impact on the sales due to this price raise.

What can't it explain? Supply was disrupted by what's going on in Japan. The earthquake, nuclear issue, and especially the lack of consistent power supply (rolling blackouts) have caused many of the plants to shut down, or greatly reduce output. This includes plants that manufacture the high-end glass and bodies, as well as plants that manufacture precision components that are then used to assemble consumer-level glass and bodies in China and Thailand.

Yes, that's indeed correct. However, was Sendai's plant the only one dedicated to high-end glass and bodies? In that case, that would be a mistake to centralize the making of high-end products in just one place.

Nikon's probably charging the same wholesale prices as before to the retailers, but the retailers realized that supply is drying up and they can charge full MSRP - or much more, in the cases of some less scrupulous shops.

So, that would be a retailer issue, taking advantage of the situation to "inflate" significantly the prices. No laws in the US preventing such actions?

That's supply and demand - basic microeconomics. You're saying they should decrease prices to boost sales. They don't have the inventory available to support the boosted sales.

Assuming they don't have the inventory...that we don't know for sure..

Anyway, high-end glass is either a luxury product to higher-income consumers, or a business necessity to professionals. Either way, it's going to be a inelastic market, not sensitive to price changes, so it wouldn't make much sense to lower the prices regardless of supply.

Maybe. Unless there is a higher demand...and I believe for the race FX has been running faster than ever

Interesting thoughts anyway.

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moimoi
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Re: Prices...What The...???
In reply to A. Westreich, Apr 14, 2011

A. Westreich wrote:

It's called a free market. Prices are never based on anything "reasonable" except in the sense that someone is willing to pay them.

So my question would be how much people are willing to pay for this? What about a 3500-4000 USD for a D700? Will people still buy it? knowing that the price was about 2250 USD a few weeks ago.

Also, when are the prices supposed to go down? When Nikon is back on its feet? Will this increase in price favor Nikon in the long run (in terms of sales)?

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Ilkka Nissilä
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Re: Prices...What The...???
In reply to moimoi, Apr 14, 2011

I am not sure if you are following, but prices for Nikon lenses (specially pro glass) are becoming less and less reasonable. I am not sure whether it is due to a strong yen vs. weak American dollar or not, but buying 2995.00 USD for the 70-200 F/2.8 VR II is absolutely ridiculous.

In Finland the price of that lens is 2100€, which is 100-200€ less than I recall paying about 15 months ago. Pretty normal price development I'd say.

Perhaps other countries' trust on your currency is failing, resulting in price increases. Or it could be opportunist camera stores who want to exploit the chaos due to the natural disaster in Japan.

I do not know what to expect, other than I hope the Japanese people recover quickly.

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Lihkin
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The retailer is doing nothing against the law...
In reply to moimoi, Apr 14, 2011

moimoi wrote:

So, that would be a retailer issue, taking advantage of the situation to "inflate" significantly the prices. No laws in the US preventing such actions?

... as long as they don't charge over MSRP. Most retailers have simply done away with the discounts they had in place earlier and are charging full MSRP, which is nothing illegal. If they charged over MSRP, then that would be wrong. Currently supply is low and demand is same/ high - hence prices move towards MSRP to maintain equilibrium.

Cheers,
----------
Nikhil
http://www.lihkin.net

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moimoi
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Re: Prices...What The...???
In reply to Ilkka Nissilä, Apr 14, 2011

Ilkka Nissilä wrote:

In Finland the price of that lens is 2100€, which is 100-200€ less than I recall paying about 15 months ago. Pretty normal price development I'd say.

Yes I believe. I was actually more concerned with the US price.

Perhaps other countries' trust on your currency is failing, resulting in price increases. Or it could be opportunist camera stores who want to exploit the chaos due to the natural disaster in Japan.

That's actually more of what I have thought. Based on the fact that the yen is still strong, the euros strong and the US dollar weak.

This is the Yen vs Dollar (it is very obvious here: The yen is strong, the US is weak)

http://finance.google.com/finance/chart?q=CURRENCY:JPYUSD&tkr=1&p=5Y&chst=cob

This is the Euro vs Yen (the chance is less significant)

http://finance.google.com/finance/chart?q=CURRENCY:JPYEUR&tkr=1&p=5Y&chst=cob

The Euro vs Dollar (the Euro is getting stronger those days)

http://finance.google.com/finance/chart?q=CURRENCY:EURUSD&tkr=1&p=5Y&chst=cob

I do not know what to expect, other than I hope the Japanese people recover quickly.

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Royson58
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"M" for "minimum"
In reply to Lihkin, Apr 14, 2011

MSRP stands for "Minimum Suggested Retail Price", and is only a guideline for dealers concerning issues like Co-Op allowances. Charging more is neither illegal or against dealers' contract with Nikon, etc.

"Price gouging" laws vary from state to state, but typically only apply to staples needed for survival (e.g. food and gasoline).

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moimoi
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Re: "M" for "minimum"
In reply to Royson58, Apr 14, 2011

Royson58 wrote:

MSRP stands for "Minimum Suggested Retail Price", and is only a guideline for dealers concerning issues like Co-Op allowances. Charging more is neither illegal or against dealers' contract with Nikon, etc.

Does "M" not stand for manufacturer instead?

"Price gouging" laws vary from state to state, but typically only apply to staples needed for survival (e.g. food and gasoline).

Can you give us further details about this "Price gouging"? As I am not a native English speaker, I failed to understand the term gouging. Did you mean fluctuations? Are there any laws restricting possible abuses in price fluctuation?

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Daves602
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Re: Prices...What The...???
In reply to moimoi, Apr 14, 2011

Funny that you guys are complaining. Here in Australia we have been paying way above the prices in America for years. Now that the Australian dollar has come from around 60 cents US back in 2000 to over $1.05 US last night, we are seeing much cheaper prices for Nikon lenses.

I think the problem is the American dollar, not the earthquake in Northern Japan.
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ponger
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Re: Prices...What The...???
In reply to moimoi, Apr 14, 2011

B&H photo listed the 70-200 at $2449 today (April 14, 2011). It's not in stock but that's their price. You HAVE to have the lens tody then you pay the premium
from whoever has it in stock at their price. Capitalism at it's finest

I'm not moved to tears.

moimoi wrote:

Hi to everyone,

I am not sure if you are following, but prices for Nikon lenses (specially pro glass) are becoming less and less reasonable. I am not sure whether it is due to a strong yen vs. weak American dollar or not, but buying 2995.00 USD for the 70-200 F/2.8 VR II is absolutely ridiculous.

I have been checking the prices for professional glass, and that's just nonsense. There has been at least a minimum of 200 USD increase for a 24-70mm f/2.8 for instance. Same thing happened with the D700, which is now overpriced on Amazon.

What are you opinions regarding this issue? I would be very much interested in your point of views. What are your expectations in a near future? Will you still keep buying pieces of equipment even though the price still increases?

Thanks,

Max

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moimoi
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Look at the price of a new D700!!!
In reply to ponger, Apr 14, 2011

Amazon and Adorama > 3000 USD

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Digetydog
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Re: Look at the price of a new D700!!!
In reply to moimoi, Apr 14, 2011

moimoi wrote:

Amazon and Adorama > 3000 USD

There has been a supply disruption. When supply goes down, prices gio up. It is as simple as that. While some of the disruption is at Nikon plants, there are also disruptions with suppliers, employee issues, and transportation.

For people who are claiming gouging, imagine you sell 100 units per month at an average price of $1000. Your revenues are $100,000 per month. You have a 1 month supply on hand. Your supplier calls you up and says there will be a 2 month delay before you get any more shipments. Once shipments resume, your units per month may not get back to normal for six month. All your competitors are going through similar problems.

What do you do?

1. Raise price as much as possible on your existiting units b/c once they are gone, they are gone.

2. When new units start ariving, you keep prices as high as possible so that you make up as much of the lost revenue as possible.

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edwardaneal
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Re: Prices...What The...???
In reply to Jogger, Apr 14, 2011

this pretty much says it all - printing money doesn't really help with the price of imports

Jogger wrote:

that and you can thank Quantitative Easing 2.0 ... i.e. printing money to devalue the US dollar to make imports for expensive

Max

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My kit - D200, 10.5mm f/2.8D, 35mm f/1.8G, 50mm f/1.4G & 70-300VR
SB800, SB600 and other misc lighting equipment

Lenses worth mentioning owned and sold– 12-24 f/4, 17-55 f/2.8, 35-70 f/2.8, 80-200 f/2.8, 20mm f/2.8, 35mm f/2, 50mm f/1.8, 50mm f/1.4D, 60mm f/2.8D, 85mm f/1.8, 105mm f/2D-DC, 180mm f/2.8, 300mm f/4D-ED

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Lihkin
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No, 'M' stands for Manufacturer's
In reply to Royson58, Apr 14, 2011

not minimum.

Cheers,
-------
Nikhil
http://www.lihkin.net

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