Opinion: How Canon USA Should Address their “Gray Market Problem”

Canon USA recently issued a statement on the gray market. Nothing in the statement should come as a surprise to our readers, we’ve been writing about this for quite some time now.

We’re not shocked to see Canon concerned about the “Gray Market”. Due to a rising dollar, falling yen, and static Canon USA prices (not to mention a strict Minimum Advertised Price), the market has been flooded with “import” models from resellers. The most poignant example was the Black Friday / Cyber Week deals, where imports were priced between $300 and $1000 less than the “full MAP” seen at authorized dealers. There’s no doubt in our minds that this was a primary motivator for the the recent price drop on select bodies and lenses.

In our opinion, though, Canon USA’s statement goes too far and demonizes gray market, describing it with terms like “illegal”, “fake”, and “counterfeit”. You do have to be more careful when buying imports, as there are unscrupulous import resellers whom we’d recommend you stay away from. But, on the whole, many readers report experiences with the major import resellers that have been very positive.

Also, many readers are concerned that “Gray Market Products may not be eligible for coverage under a U.S. warranty” — emphasis added by us. Note, this isn’t news, or a departure from their current written policy, which is to not accept grays for warranty. In practice, however, they have been honoring warranty on grays. As we always disclaim, it’s in their right to unilaterally change this practice at any time. If they do change their practice, we are sure we will hear from reader reports immediately after this change happens, and we’ll communicate it widely. Until then, it is still the status quo.

In our opinion, there is “no news” in this statement — it doesn’t strongly indicate a policy change. It shows Canon USA’s increasing concern and thus sabre-rattling towards the import/gray market forces that are invading and taking Canon USA’s market share.

Rather than disparaging the gray market and focusing on how “bad” grays are (let’s not forget, after all these are the same Canon products from the same factories), our open suggestions to Canon USA are to consider adding value to USA purchases (rather than attacking gray), be faster to respond to global price and currency changes, and eliminate the dreaded Minimum Advertised Price.

  • Suggestion #1: Increased USA-only Warranty duration. Several other manufacturers now offer a longer, local-only warranty to reward customers for buying from local authorized dealers. Taking an example from our neighbors to the north, Canadian Nikon and Sigma distributors successfully fended off the gray market by implementing a Canada-only 5-year and 10-year warranty.

    Denying the one-year warranty service to gray market items, which is what Nikon USA does and what we’re afraid Canon will eventually do, would be taking a step in the wrong direction, and will only decrease consumer confidence. How reliable are Canon products, if Canon won’t unconditionally warrant them for one year?

  • Suggestion #2: Be more responsive to global price and currency changes. As the currency shifted over the course of the last five months, we watched import body prices slowly fall to new lows, with no corresponding response in authorized dealer pricing levels. (There was a September price drop, but it was mostly to make chronic mail-in rebates permanent, rather than a true price drop.) It’s taken Canon until December to bring prices in-line, via rebates and price drops, but in the words of one retailer: “It’s too little, too late”. Not to mention, the artificially inflated prices due to the MAP, leading us to our third suggestion…
  • Suggestion #3: Eliminate (or relax) the Minimum Advertised Price policy. Canon authorized dealer prices can be competitive even with import prices. It’s unfortunate that retailers are forbidden from advertising these competitive prices, which is a huge handicap in fighting off the freely priced gray market imports. Eliminating or relaxing the MAP would help fix what is a growing perception of sky-high authorized dealer prices. Now, it’s not too hard to find good prices but it was much easier in the days when deals were plentiful and strong.

Canon USA — we await your next move.

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17 comments on “Opinion: How Canon USA Should Address their “Gray Market Problem”

  1. December 18, 2014 at 10:42 am EDT

    #2 and #3 are the most effective positions, IMO.

    I simply do not understand why Canon tries to defy basic economics with their MAP and pricing schemes. Manufacturer price regulation is known to negatively impact sales of that manufacturer’s products, as consumers seek options elsewhere.

    It’s an antiquated pricing model, seen most often in electronics such as cameras and audio components. It doesn’t work, particularly when consumers are price sensitive and substitutes (such as grey market and mirrorless options) are plentiful. It’s also frustrating!

    1. CanonPriceWatch
      December 18, 2014 at 10:48 am EDT

      So very true.

  2. December 18, 2014 at 11:21 am EDT

    I think that Canon is being ridiculous in tryingv to separate their products into towo groups. I agree with nos 2&3, but why should anyone consumer or seller be treated like second class citizens for using the free market system to their benefit? Canon products should skeays be treated the same, no matter how they moved around the world.

  3. December 18, 2014 at 12:53 pm EDT

    Canon’s MAP policy is definitely an epic fail on their part and it should come as no surprise to them if gray market sales continues to increase…or worse, loyal photographers continue leaving Canon altogether (as other professional have been doing).

  4. December 18, 2014 at 1:49 pm EDT

    Only a one year warranty demonstrates a lack of confidence in their products, especially for newly introduced models.

  5. a
    December 18, 2014 at 1:25 pm EDT

    Regarding the falling yen/rising dollar … I remember reading recently one could potentially fly to japan, purchase a 5dmk3 (or was it a 1d X, I can’t remember), fly home and come out ahead of paying current “sale” prices on the body here in the states.

    2 really addresses the whole forex issue while 3 allows the dealers here to stay competitive and help let market correction determine the “right” price for things.

    That being said, Canon doesn’t control currency exchange rates, so they can only be so reactive. Can’t be knee jerk where they over react to a non-event, but also can’t be slow as molasses (as they seemed to have been over the past few months) where they fail to act until many consumers are tired of waiting.

    They do control the MAP, however, and they really need to address the issue by finding a way to make the MAP work and make the US goods more attractive than the imports. I’m uncaring about additional service/benefits and generally let my wallet do my talking when it comes to purchases. Let the dealers get the right price (ideally around Grey pricing or close enough where the price diff is so negligible that the warranty service issue pushes you to US goods) and the grey market issues should resolve themselves. Hamstring everyone with MAP, rebate games, package deals, etc and you are just inviting more Gray market imports

  6. December 18, 2014 at 11:30 pm EDT

    I never buy grey market, always make sure buying my gear from bh oh adorama just want to make sure is genuine canon and autorized dealer, feel more safe even tha cost me more but i know i have the real deal and not after market canon

  7. December 18, 2014 at 11:32 pm EDT

    The only thing i dont like from canon is the warranty, think about it? If you spen alot of money and you only get one year warranty!!! Really sucks

  8. December 19, 2014 at 6:59 am EDT

    Canon should be thankful for the grey market, without it I would have waited for Sony’s next A99 and ditched Canon altogether.

  9. December 19, 2014 at 9:47 am EDT

    I looked at 1dx from Abes of Maine. Great price. II called, and the guy on the phone said it was cheap and made out of plastic. HI said that the usa one was carbin fiber and tried to upsell me to the U.S. one. Is that true?

    1. a
      December 19, 2014 at 12:20 pm EDT

      no, he was bsing you. bait and switch right there.

      read this link from the original post

    2. December 19, 2014 at 1:46 pm EDT

      Thank you!

  10. December 19, 2014 at 8:52 am EDT

    Canon’s rather short one year warranty on authorized USA products is not worth the price premium over gray market products. A longer warranty would be a good way for Canon USA to protect their market.

  11. December 19, 2014 at 10:28 am EDT

    Amen and LOVE your street prices program!!!!

  12. December 19, 2014 at 12:57 pm EDT

    Good article

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