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?

[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.

[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.

[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]

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.

[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.

[wideangle]

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.

I do question the warranty issues, as if one saves from buying grey import, the costs of repair - even if you send it back to manufacturer - are probably going to work out less than if you have bought it here in Australia and had Australian warranty. My original example with the price of a camera around $1600 for import, whereas at the local shop I just checked its a "cheap" $2699!!

[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.

[wideangle]

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.

Just checked out your 40s death thread and you made and raised some very good points in there about returns.

[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.

[Kym]

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.

I think it is clear cut; as much as we want an alternate.
The key issue is that Canon Australia is a separate legal entity; who were NOT in the supply chain.
This has been ruled upon in terms of consumer legislation in the past; so it is what it is legally.

Edit: I used to work for IBM who have some strange support arrangements. Most of their gear is covered by international warranty; but there are odd quirks.

I note from your other thread that Canon did not admit any liability and did things in 'good faith'.
From my understanding; even under the TPA; the manufacturer is not Canon Australia but their parent.
The legal issue spins on the direct supply chain. Canon Australia did not offer that specific item for sale.

[Xenedis]

Grey (or parallel) importation refers to the practice of importing camera equipment outside the manufacturer's supply chain.

These are not factory seconds or refurbished goods; they are new and legitimate; just not sourced from the manufacturer.

Sellers of grey-market goods often do not have the supply chain and retail overheads costs that traditional retail stores do, so they can offer those goods more cheaply.

As many grey-market items are sourced from America or Asia, the exchange rate also affects prices, and when the exchange rate works in our favour, lower prices can be offered.

[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.