Are Grey Market Imports Refurbished?

[wideangle]

I am curious. Why can grey market imports be so much cheaper than local stock, to the point where in some cases one can be saving a substantial amount? Take for example the Canon 7D. One can be bought through grey market for as little as $AU1550, whereas in Australia with local warranty you would be looking at around $2300. That's $700 more! Even taking into account customs/Duties at say 20% the grey import would still come to $1860. Could some products that are sold as grey market be second hand/refurbished goods? Or is it that Australian's pay higher prices for most goods, and that if you walked into a shop in Hong Kong that the prices that local pay are the same as grey market imports for us? Inform me!

[Bear Dale]

No there not refurbished.

[wideangle]

No there not refurbished.

Care to comment further?

[Bear Dale]

Care to comment further?

I don't know the ins and outs of all grey importers, but the extensive amount of gear that I've bought from DDP is all brand new and not refurbished.

[I @ M]

Most grey imports come from the Asian market.
Many Asian countries have a much less rate of tax on items both at the import level and then at the sales level.
Many Asian countries run on much lower overheads to run their businesses and rely on high sales figures to maintain profit levels.

Australia charges duties to the importer (Canon, Nikon, Pentax etc. etc.) and then applies the GST to the sale at the retail level.
Australia is a relatively affluent country where wages and living conditions are comparatively high so the importer/ distributor and the retailer have to factor the cost of opening the doors every day at a higher rate than many Asian countries.
Australia has a much lower population base and therefore less sales to make a profit on than many other countries so the distributor and the retailer have to apply a higher profit margin to keep in business.

I don't find it hard to see where the extra $700.00 comes in to play when you look at all the points along the way before we, the camera hungry consumer gets our paws on a local import.

There are a few other factors in the equation as well.
I would quite like to see the Aussie market treated the same as the US market where much longer warranties and faster service times are applied to the slightly higher prices we are paying for the same (non grey) items.

[peterb666]

Most grey imports come from the Asian market.
Many Asian countries have a much less rate of tax on items both at the import level and then at the sales level.
Many Asian countries run on much lower overheads to run their businesses and rely on high sales figures to maintain profit levels.

Australia charges duties to the importer (Canon, Nikon, Pentax etc. etc.) and then applies the GST to the sale at the retail level.
Australia is a relatively affluent country where wages and living conditions are comparatively high so the importer/ distributor and the retailer have to factor the cost of opening the doors every day at a higher rate than many Asian countries...

There is no duty on cameras. The only tax is GST which is levied at 10% at every stage, but as everyone along the way except for the poor mug at the end left with the goods gets to claim back what they paid against what is due, just the poor buyer left with the 10% tax.

While overheads are relatively high in Australia and volumes are comparatively low, this will add a bit to the cost but it won't double the cost.

The biggest problem is that pricing is largely based on what the market will bear. We have been paying high prices for many decades. Recently when the dollar went down, wholesalers increased prices (justifiably), but since our dollar bottomed, it has increased in value by more than 50%. That means prices should have dropped by 1/3rd. Have they? No.

People keep buying so there is no incentive to importers & wholesalers to lower prices.

[Speedway]

There is no duty on cameras. The only tax is GST

This is incorrect. the only time there is no duty is if the item is under $1000 the following is from the customs website.

Example 3: Import of goods (other than tobacco products or alcoholic beverages) valued above $1000
AUD$
Customs value (Cval) 2000.00
Customs duty (Duty) @ 5% of Cval 100.00 (Payable)
International transport and insurance or postage (T&I) 150.00
Value of the Taxable Importation (VoTI) (Cval+Duty+T&I) 2250.00
Goods and Services Tax (GST) @ 10 per cent of the VoTI 225.00 (Payable)
Total payable Duty + GST 325.00

Keith.

[I @ M]

There is no duty on cameras. The only tax is GST which is levied at 10% at every stage, but as everyone along the way except for the poor mug at the end left with the goods gets to claim back what they paid against what is due, just the poor buyer left with the 10% tax.

While overheads are relatively high in Australia and volumes are comparatively low, this will add a bit to the cost but it won't double the cost.

The biggest problem is that pricing is largely based on what the market will bear. We have been paying high prices for many decades. Recently when the dollar went down, wholesalers increased prices (justifiably), but since our dollar bottomed, it has increased in value by more than 50%. That means prices should have dropped by 1/3rd. Have they? No.

People keep buying so there is no incentive to importers & wholesalers to lower prices.

This is incorrect. the only time there is no duty is if the item is under $1000 the following is from the customs website.

Example 3: Import of goods (other than tobacco products or alcoholic beverages) valued above $1000
AUD$
Customs value (Cval) 2000.00
Customs duty (Duty) @ 5% of Cval 100.00 (Payable)
International transport and insurance or postage (T&I) 150.00
Value of the Taxable Importation (VoTI) (Cval+Duty+T&I) 2250.00
Goods and Services Tax (GST) @ 10 per cent of the VoTI 225.00 (Payable)
Total payable Duty + GST 325.00

Keith.

Peter and Keith, the terminology may be confusing to some.

Peter, photographic equipment is mostly free from tariffs which are a totally separate form of charges than duties payable.

Keith has the correct summation regarding duties applicable to general goods.

My reference to the above duties and charges are in relation to an importer who has a registered business in Australia and imports goods on a regular basis such as Canon Aus; Nikon Aus; CR Kennedy etc. etc.
They do pay GST, customs duties and probably more fees related to importing goods than most ordinary people realise which sometimes the grey importers may not pay one or more of those charges depending on their business practices.

I am not having a go at grey importers or the prices charged by the "official" distributors, merely pointing out where the savings can come from when goods are parallel (grey) imported.
I am the same as most people, I enjoy a bargain and would very much like to see lower prices on my chosen brand items but at the same time I can see why prices are higher from same companies than others.

[blackjacknz]

Peter and Keith, the terminology may be confusing to some.

Peter, photographic equipment is mostly free from tariffs which are a totally separate form of charges than duties payable.

Keith has the correct summation regarding duties applicable to general goods.

My reference to the above duties and charges are in relation to an importer who has a registered business in Australia and imports goods on a regular basis such as Canon Aus; Nikon Aus; CR Kennedy etc. etc.
They do pay GST, customs duties and probably more fees related to importing goods than most ordinary people realise which sometimes the grey importers may not pay one or more of those charges depending on their business practices.

I am not having a go at grey importers or the prices charged by the "official" distributors, merely pointing out where the savings can come from when goods are parallel (grey) imported.
I am the same as most people, I enjoy a bargain and would very much like to see lower prices on my chosen brand items but at the same time I can see why prices are higher from same companies than others.

Just to clear up the duty on buying a camera on the net and bringing it into Australia. I sent an email to customs to ask about purchasing a DSLR for $3000 from Honk Kong...and got this reply...

Hi Steve

Sorry that the link doesn't work

Your digital camera would be free of duty but subject to 10% GST.

You can find the Customs Tariff on our website under "Importing Export" the "Customs Tariff"

Kind regards,
Craig C
Senior Customs and Border Protection Officer | Customs Information and Support Centre | CE&CS
Australian Customs and Border Protection Service
Customs House, 10 Cooks River Drive, Mascot NSW 2020
P: 1300 558 099 | F: 02 8339 6713 |

[Lani]

No they are not refurbished...well, none of the things I bought, and that's quite a few ), just we are being overcharged in out market. you only have to look at prices at Adorama etc to compare. it's not just the Australian market that is more expensive, most other markets pay differing amounts...it's what the big player manufactures can get away with charging.

[I @ M]

And yes, they may be refurbished, many many warranty or changeover bodies and lenses are resold to anyone that cares to buy a bulk lot and they in turn pass them on to the consumers via many outlets.

The emphasis is strongly on the may in that sentence, I know of two bodies that were bought as new from an Asian ebay seller but were in fact Nikon USA refurbished items and came packaged as such.

[fillum]

Something else to keep in mind is that even though the product may be new some of the box contents might not be appropriate to the local market, particularly if buying direct from Asia. For example, my D300 (DigitalRev HK) came with (what looks to be) a photocopied manual, and the battery charger didn't have the Aussie electrical connection (although an adapter was included). Considering a $700 saving against the local price this wasn't a concern to me but may be to some.



Cheers.

[Xevious]

And yes, they may be refurbished, many many warranty or changeover bodies and lenses are resold to anyone that cares to buy a bulk lot and they in turn pass them on to the consumers via many outlets.

The emphasis is strongly on the may in that sentence, I know of two bodies that were bought as new from an Asian ebay seller but were in fact Nikon USA refurbished items and came packaged as such.

How would you tell if an item was refurbished though? Is it a sticker on the box or do you have to contact the manufacturer to find out based on the serial number?

[I @ M]

How would you tell if an item was refurbished though? It is a sticker on the box or do you have to contact the manufacturer to find out based on the serial number?

In both the cases that I know of they came in a grey box instead of the normal gold package and with the wording "Nikon reconditioned product" and a sticker detailing the model and that they were covered by a 90 day limited warranty.
Both the sellers are no longer on ebay, I guess they made their dollars and closed up "shop".

The situation with the examples that I gave are more deceptive marketing because anyone looking to buy the items would only have seen and been told the same as any of the more prominent sellers tell you on their websites.

As in most things in life, buyer beware. It just helps to go into these sorts of deals with a little bit of knowledge before hand about what may happen.

[damnameany]

Ditto to most a what I @ M said.

It is the same in the UK most luxury items are more expensive. Take a car built in England that is then shipped to Ireland will be cheaper for me to buy and ship back to England than to buy at the local dealer. After government taxes the biggest cost is labour, to pay for higher wages you need a bigger margin.

[justdave]

im pretty sure that grey market is not refurbished like 98 % sure.

they would have to clearly mark that it is as the consumer would be paying retail for second hand goods.

just all comes down to the cheaper costs from china etc

and buying bulk and cutting out middle men

digital rev - 10000 units @ x price will get better deal than

harrys cameras - 10 units after getting through canon aust. etc

its a shame but if canon aust let the grey market slide then imagine the market in aust for cameras would die cos everyone would just import from over seas

at one stage when the dollar was really shit americans could buy the cameras from canon australia cheaper than canon us. including shipping

[Kym]

Its complicated.

Some would say
** Retail Price - Grey Price = Margin of Australian Importer and Retailer above Margin of Grey importer.

But that is not quite true.

There are other factors.

Product sales volume being the main one. GST being another.
'Accountants hat on' ... Simply: the distributor fixed costs amortised per unit sold are higher here in Australia as our sales volumes are lower than USA, Europe, Japan and the rest of Asia.

The cost of a retail shop front & staff in Australia is another huge factor.

Marketing costs also come into play.
Grey importers have very low marketing costs; usually just a web site.
Anyone see the Nikon TV ads etc?

That said, Pentax (CR Kennedy) seem to be much closer to global pricing than Canikon and Sony,
to the point that I got my K-7 body for within $20 of what I could get it from B&H etc.
And CR Kennedy will price match Sigma lenses.

All of the things that I @ M said come into play as well.

The Australian/International warranty is the biggest issue.
Will you get the local warranty support if you need it?
That's a risk you need to evaluate.

[Tricky]

Yes, ditto what I@M and Kym said. Any remaining differences in price after taking into account tax/georgraphy/rent etc relates to market segmentation strategies, ie pitching a product at a price point that a market will bear. Where the difference becomes too great, grey importers appear and undertake arbitrage.

Companies like Canon and Nikon are keen to maintain their market segmentation strategies (and higher profitability), hence discourage grey imports with threats of not honouring warranties. Where a product has been bought "in Australia" (eg an online shop with Australian ACN/ABN, with payment in Au$, even if product is being shipped in from abroad), then normal consumer product laws apply and a product has to be fit for purpose and of merchantable quality, regardless of whether imported through official or parralel channels.

[Kym]

Companies like Canon and Nikon are keen to maintain their market segmentation strategies (and higher profitability), hence discourage grey imports with threats of not honouring warranties. Where a product has been bought "in Australia" (eg an online shop with Australian ACN/ABN, with payment in Au$, even if product is being shipped in from abroad), then normal consumer product laws apply and a product has to be fit for purpose and of merchantable quality, regardless of whether imported through official or parallel channels.

And that is where it can get tricky! (excuse the pun)

A hypothetical:

If the product (lets say a Nikon D3s) was purchased from an ABN holding grey importer in AUD$ but not an 'authorised' Nikon Australia retailer for $1000 less than an authorised retailer.
Then...
The D3s has an issue, say the sensor dies.

Who is legally responsible for repairs?

The answer is in fact the ABN holding grey importer, who needs to go back through their supply chain, which does not include Nikon Australia.

Nikon Australia is this case has no responsibility whatever; even though ultimately via the grey importer supply chain Nikon HQ will cover the cost of repair.

The problem is that the grey importer has to send the faulty D3s back to Taiwan or wherever to get it fixed.
And they are often reluctant to manage the problem due to the paperwork and having to get a return authority for OS and shipping etc.
They then start insinuating the Nikon Australia should 'do the right thing'; which is total BS.

Substitute 1DmkIV and Canon for D3s and Nikon; same story.

In the mean time, on forums, we get people complaining the Nikon/Canon/Pentax/... Australia should repair (at no cost) their grey import kit.

Its all based on the trail of margin/revenue on the supply chain.
The Australian distributor never got their cut so they have no obligation on the grey import product.

[Tricky]

And that is where it can get tricky! (excuse the pun)

A hypothetical:

If the product (lets say a Nikon D3s) was purchased from an ABN holding grey importer in AUD$ but not an 'authorised' Nikon Australia retailer for $1000 less than an authorised retailer.
Then...
The D3s has an issue, say the sensor dies.

Who is legally responsible for repairs?

The answer is in fact the ABN holding grey importer, who needs to go back through their supply chain, which does not include Nikon Australia.

Nikon Australia is this case has no responsibility whatever; even though ultimately via the grey importer supply chain Nikon HQ will cover the cost of repair.

The problem is that the grey importer has to send the faulty D3s back to Taiwan or wherever to get it fixed.
And they are often reluctant to manage the problem due to the paperwork and having to get a return authority for OS and shipping etc.
They then start insinuating the Nikon Australia should 'do the right thing'; which is total BS.

Substitute 1DmkIV and Canon for D3s and Nikon; same story.

In the mean time, on forums, we get people complaining the Nikon/Canon/Pentax/... Australia should repair (at no cost) their grey import kit.

Its all based on the trail of margin/revenue on the supply chain.
The Australian distributor never got their cut so they have no obligation on the grey import product.

Hi Kym

No hypothesising needed - please read the real life tale of my 40D's untimely death here

I think the key point is that Canon Australia is a wholly-owned subsidiary of Canon Inc. Hence the separation you refer to between the global company and the local Australian one, and their responsibilities, isn't clear cut.

Its one thing to say that Canon Australia won't honour the warranty (as the original (say) HK warranty clearly says any claims must be made in HK). This I agree with, as it reflects the terms of a contract between Canon HK and the customer. But its another to say that Canon Inc can ignore consumer protection laws in Australia in relation to a Canon product sold in Australia. As my communication with Canon Australia shows, they accept that they are in effect the same company as Canon Inc and are bound by consumer protection laws.

My experience with the 40D, although a relatively happy outcome, nevertheless led me to buy my 7D from an authorised Canon dealer (NGP). However, I would have no qualms about buying a lens grey import, as Canon's international warranty on lenses is - by all reports - honoured in Australia.