Why the big price difference?

[fan1080]

I just purchased an external flash and diffuser. To purchase these items in Canada it would have cost me $370. From B&H it was $306. Both prices include shipping and applicable taxes. I picked up the shipment today and was expecting to have to pay some duty as well...... nope, nada!

The biggest price difference was the flash unit itself, $184 in USA, $269 in Canada. The diffuser/accessories were about the same. I was also looking at some lenses too. The Sigma 30 1.4 for instance, ~$365 in the US, ~$530 in Canada.

I really would prefer to support our local camera stores, but the price difference is not insignificant.

Anyone have any thoughts?

 

[MICKEY88]

it's not that uncommon to see such price differences here in the states either,

small local stores have a higher overhead plus they buy in smaller quantities than a large store like b&H, so they pay the manufacturer more per unit..

 

[Master Mason]

it's not that uncommon to see such price differences here in the states either,

small local stores have a highwer overhead plus they buy in smaller quantities than a large store like b&H, so they pay the manufacturer more per unit..

Plus, if your volume is higher, you can have smaller margins to end up making more money as well.

to put numbers to it. You pay $250 buck wholesale for an item. You sell 10 of them at $500, you made $2500. But if you sold 20 of them at $400, you made $3000 and you either took 10 sales from your competition, or caused some number of people to purchase at the lower price point than might have otherwise not purchased.

 

[fan1080]

Supply/demand and bulk buying/selling strategies are one thing, but here in Canada most all camera supply stores attempt to stay pretty much on par with the MSRP as per the Nikon Canda website.

They all have specials once and a while, but you rarely see price differences like I've indicated in my first post.

Odd, and like I said, I'll have a hard time buying locally with these price differences, which is a shame. The only unfortunate thing is the warranty coverage. Buying US product (not gray market) I won't be able to get warranty service here, it'll have to go back to the supplier (B&H in this case). Maybe here in Canada we pay extra for local warranty coverage.

Either way, I'm looking forward to getting home to try out the new flash and diffuser.

 

[Master Mason]

Supply/demand and bulk buying/selling strategies are one thing, but here in Canada most all camera supply stores attempt to stay pretty much on par with the MSRP as per the Nikon Canda website.

They all have specials once and a while, but you rarely see price differences like I've indicated in my first post.

Odd, and like I said, I'll have a hard time buying locally with these price differences, which is a shame. The only unfortunate thing is the warranty coverage. Buying US product (not gray market) I won't be able to get warranty service here, it'll have to go back to the supplier (B&H in this case). Maybe here in Canada we pay extra for local warranty coverage.

Either way, I'm looking forward to getting home to try out the new flash and diffuser.

The other thing that happens in the US is there are very strong laws against price fixing. The manufacturer can set an MSRP, but the vendor can sell for whatever they want, and it is impossible for the manufacturer to say anything.

The only way around this is to have a very small list of vendors ie Apple Computers with short contracts, so if the vendor starts selling to cheaply the simply remove the agreement and find someone else that will sell closer to the msrp.

But since Canon, Nikon et all are more interested in mass sales, they have much less control.

 

[mabas9395]

Ahh, econ 101 and the price elasticity of demand. A drop in price will result in an increase of demand. The tricky part is finding the optimal price point. B&H seems to have done a pretty good job at it because they are very popular with the photography crowd.

 

[MarkBarbieri]

The fact that the Canadian dollar has increased substantially relative to the US dollar may also be a factor.

 

[AydensMom]

The fact that the Canadian dollar has increased substantially relative to the US dollar may also be a factor.

Shouldn't that make our prices cheaper.....not more expensive?? Retailer pays less CDN$ for item or is manufacturer just pocketing more money and hosing the retailer? I have a feeling that our crazy taxes and overzealous social programs make businesses charge more than our US counterparts. I buy soime of my glass while on vacation at Disney. Just another reason to visit.

Pat.

 

[AZ JazzyJ]

Ahh, econ 101 and the price elasticity of demand. A drop in price will result in an increase of demand. The tricky part is finding the optimal price point. B&H seems to have done a pretty good job at it because they are very popular with the photography crowd.

Elasticity of demand typically deals with how many consumers will purchase a product for a given change in price. An elastic demand states that a small change in price would equate to a large change in demand while an inelastic demand theorizes that a large change in price makes little difference in the demand of a product. Unitary demand believes that price and demand correlate in roughly a 1:1 relationship.

Your example is more one of market differentiation rather than supply and demand. I would suggest that the online photography marketplace is more of an oligopsony where the mainstream is "controlled" (from an economic theory perspective) by a multitude of dealers servicing a small group of customers. Price differences are a result of consumers driving the market working suppliers against one another. Suppliers on the other hand will attempt to differentiate themselves so that consumers will make economic decisions based upon factors other than price. This would make a great treatise in microeconomics. I'm not sure what practical value the research would have. This is one of those areas that begins to blur the lines between economics, sociology, and psychology. When does a decision cease to become economic and begin to become one that is made based on the society norms and psychological stimuli? These are the kind of things that keep me awake at night. Well not really, I just don't sleep more than 3-4 hours per night.

 

[MouseFaninQueue]

Shouldn't that make our prices cheaper.....not more expensive?? Retailer pays less CDN$ for item or is manufacturer just pocketing more money and hosing the retailer? I have a feeling that our crazy taxes and overzealous social programs make businesses charge more than our US counterparts. I buy soime of my glass while on vacation at Disney. Just another reason to visit.

Pat.

Is there a decent camera store near WDW to buy Pentax accessories??

 

[AydensMom]

A couple of places that I have used. Colonial Photo and Hobby in downtown Orlando. North Mills Rd if memory serves correctly. And I bought my Sigma 10-20 at Ritz Camera which is on one of the major roads on the outskirts of Orlando near a huge mall. I just used the local yellow pages and called around. Not sure if either carry Pentax though. Colonial has almost full inventory of Canon and Nikon but never eyed Pentax.

Good luck, Pat.

 

[jfulcer]

Elasticity of demand typically deals with how many consumers will purchase a product for a given change in price. An elastic demand states that a small change in price would equate to a large change in demand while an inelastic demand theorizes that a large change in price makes little difference in the demand of a product. Unitary demand believes that price and demand correlate in roughly a 1:1 relationship.

Your example is more one of market differentiation rather than supply and demand. I would suggest that the online photography marketplace is more of an oligopsony where the mainstream is "controlled" (from an economic theory perspective) by a multitude of dealers servicing a small group of customers. Price differences are a result of consumers driving the market working suppliers against one another. Suppliers on the other hand will attempt to differentiate themselves so that consumers will make economic decisions based upon factors other than price. This would make a great treatise in microeconomics. I'm not sure what practical value the research would have. This is one of those areas that begins to blur the lines between economics, sociology, and psychology. When does a decision cease to become economic and begin to become one that is made based on the society norms and psychological stimuli? These are the kind of things that keep me awake at night. Well not really, I just don't sleep more than 3-4 hours per night.

Ahhhh, mabas9395 teaches us econ 101 and AJ JazzyJ teaches us econ 401.

 

[AZ JazzyJ]

Ahhhh, mabas9395 teaches us econ 101 and AJ JazzyJ teaches us econ 401.

Sorry, sometimes the weirdest things catch my eye. (Trina says I'm not wired quite right. I'm like a 3 gHz guy in a 2 gHz world; the clock cycles just don't seem to line up right.)

In all the time I've been moderating, I think this is probably the first time I have ever been able to properly use "oligopsony" in a sentence. Usually the only time I can use that term is as a punchline to a joke like "What did Stan Laurel say to Oliver Hardy when he was looking for his Walkman?" (That's a joke even an economist would groan at.)

 

[cpbjgc]

I just purchased an external flash and diffuser. To purchase these items in Canada it would have cost me $370. From B&H it was $306. Both prices include shipping and applicable taxes. I picked up the shipment today and was expecting to have to pay some duty as well...... nope, nada!

The biggest price difference was the flash unit itself, $184 in USA, $269 in Canada. The diffuser/accessories were about the same. I was also looking at some lenses too. The Sigma 30 1.4 for instance, ~$365 in the US, ~$530 in Canada.

I really would prefer to support our local camera stores, but the price difference is not insignificant.

Anyone have any thoughts?

As a fellow Canadian, I feel your pain, and I have seen this debate on a Winnipeg based photo discussion board. That's where I found this link which has been very helpful. It does price comparisons to Canadian and U.S. retailers. I find this useful as the local camera store I tend to use will price match to other Canadian stores. Try this out for your next purchase!

 

[fan1080]

As a fellow Canadian, I feel your pain, and I have seen this debate on a Winnipeg based photo discussion board. That's where I found this link which has been very helpful. It does price comparisons to Canadian and U.S. retailers. I find this useful as the local camera store I tend to use will price match to other Canadian stores. Try this out for your next purchase!

Thanks alot for that link. I've booked marked it for future reference.

 

[Geoff_M]

There's also one other major factor here that's not being mentioned... Canon USA and Canon Canada are two separate subsidiaries of Canon, Inc. Each has their own cost structures, pricing (and pricing strategies), earnings targets, and effective corporate tax rate to deal with. Being a larger market, the US buyers may also enjoy an economy of scale that Canadians don't.

As for exchange rates, the CDN$ vs. the Yen is more of a factor than the comparison to the US dollar.

 

[jfulcer]

"What did Stan Laurel say to Oliver Hardy when he was looking for his Walkman?"

??

“A horse may be coaxed to drink, but a pencil must be lead”

??

 

[The Grays]

Another point is B&H will also have USA and import products and many times the import is cheaper. These are products that they purchase from another country due to the value of the dollar and that currancy. And with Sigma B&H has bought direct from Sigma Japan not USA and many times will get a better deal.