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Author Topic: Is the Photo Equipment Supply Chain Totally Broken?  (Read 17687 times)
m.rei
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« Reply #20 on: June 17, 2011, 12:03:16 PM »
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Looking at it with a sense of humor the situation reminds me of Monty Python's famous Cheeseshop sketch:
http://www.montypython.net/scripts/cheese.php

[...]
C: I want to buy some cheese.
[...]
O: What would you like?
C: Well, eh, how about a little Red Leicester.
O: I'm, a-fraid we're fresh out of Red Leicester, sir.
C: Oh, never mind, how are you on Tilsit?
O: I'm afraid we never have that at the end of the week, sir, we get it fresh on Monday.
C: Tish tish. No matter. Well, stout yeoman, four ounces of Caerphilly, if you please.
O: Ah! It's beeeen on order, sir, for two weeks. Was expecting it this morning.
C: 'T's Not my lucky day, is it? Aah, Bel Paese?
O: Sorry, sir.
C: Red Windsor?
O: Normally, sir, yes. Today the van broke down.
C: Ah. Stilton?
O: Sorry.
C: Gruyere? Emmental?
O: No.
C: Any Norwegian Jarlsberger, per chance?
O: No.
C: Liptauer?
O: No.
C: Lancashire?
O: No.
[...]
C: You... do have some cheese, don't you?
O: (brightly) Of course, sir. It's a cheese shop, sir. We've got-
C: No no... don't tell me. I'm keen to guess.
O: Fair enough.
C: Uuuuuh, Wensleydale.
O: Yes?
C: Ah, well, I'll have some of that!
O: Oh! I thought you were talking to me, sir. Mister Wensleydale, that's my name.
(pause)
C: Greek Feta?
O: Uh, not as such.
C: Uuh, Gorgonzola?
O: No
C: Parmesan?
O: No
[...]
C: I see. Uuh... 'Illchester, eh?
O: Right, sir.
C: All right. Okay. 'Have you got any?' He asked, expecting the answer 'no'.
O: I'll have a look, sir.. nnnnnnnnnnnnnnnno.
C: It's not much of a cheese shop, is it?
O: Finest in the district sir!
C: (annoyed) Explain the logic underlying that conclusion, please.
O: Well, it's so clean, sir!
C: It's certainly uncontaminated by cheese.
O: (brightly) You haven't asked me about Limburger, sir.
C: Would it be worth it?
O: Could be.
[...]
C: (slowly) Have you got any Limburger?
O: No.
C: Figures. Predictable, really I suppose. It was an act of purest optimism to have posed the question in the first place....... Tell me:
O: Yessir?
C: (deliberately) Have you in fact got any cheese here at all?
O: Yes,sir.
C: Really?
(pause)
O: No. Not really, sir.
C: You haven't.
O: Nosir. Not a scrap. I was deliberately wasting your time,sir.
[...]
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JohnTodd
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« Reply #21 on: June 17, 2011, 12:47:39 PM »
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(This buying, trying, and returning habit, is less prominent at least in Germany)

I wonder if this point about buyer habits should be underlined. Not being a big buyer of new equipment, I'm constantly surprised by forum users casually reporting that they've placed orders with several suppliers simultaneously in order to secure the latest-greatest, with the intention of cancelling or returning. It's hard to know how suppliers can plan around that?
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bobtowery
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« Reply #22 on: June 17, 2011, 01:32:50 PM »
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I ordered my GH2 in October, and got it in early January. Batteries have just become available. They are in stock at Amazon: http://www.amazon.com/gp/product/B004KDVNZO

I know it is a hassle, but sometimes when looking for gear it pays to call retailers in major cities. In Sacramento, where I used to live, this store http://www.pardeescameras.com/ has a lot of stock. He has two M9's right now for example.

Tell you what Mark. You don't want to take that expensive S2 to Africa. Let's do a swap. I'll lend you my panny 14-140mm (and I'll even throw in the 20mm pancake) and I'll borrow your S2 while you are gone? I'd love to shoot an S2 for a while (er, I'd like to own one, but not in the $$ position at this time).

I'm not thinking you'll take me up on the offer. But I think the lending thing is a good idea. Obviously you take care of your gear. If you can't find a 14-140 and having one means you don't have to haul the S2, I would lend you mine. Email me, photos@bobtowery.com.

Here is a shot from Mexico with the 14-140:

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dreed
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« Reply #23 on: June 17, 2011, 01:47:10 PM »
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I think there may be another - simpler - explanation for all of this. These are world-wide companies supplying world-wide demand. Don't forget that the size of the middle class in China (by our standards) exceeds the population of the USA. China, India, Brazil, Russia and other smaller "emerging" economies are growing very quickly and minting large numbers of very well-to-do people. They want the same gizmos everyone else wants. It could just be the case that manufacturers didn't anticipate the rate and extent of world-scale demand growth for the better products, and it takes time to gear-up production lines with all that is entailed.

There's a very different culture towards money in China than the USA - I can't say if the same is true for Brazil, Russia and India (BRIC): traditionally they're savers, not spenders. This poses problems for the Chinese Government as it tries to get local spending to start driving the local economy.

Further, what do you mean by "middle class in China (by our standards)"? Are you measuring "middle class" by relative income or something else? The important point here being that if it were to be income based then a "middle class" person in China earns substantially less than a "middle class" person in the USA. The important point here being that a GF-2 or GH-3 or D7000 or 5D MarkII is going to be on sale in China for roughly the same price as it is in the USA, except in local currency. Thus the relative cost of such equipment is substantially higher.

"They want the same gizmos everyone else wants." - for the Internet generation, I think that's true but for those in their 30s and older, I'm not so sure. I work in the USA with Chinese expats and their purchasing and spending behaviour is completely different to that of local people, even though they're earning a similar wage.

I think it would be useful to see sales figures per country, vs expected sales, before it is safe drawing any conclusions like you have.
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Mark D Segal
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« Reply #24 on: June 17, 2011, 03:10:07 PM »
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There's a very different culture towards money in China than the USA - I can't say if the same is true for Brazil, Russia and India (BRIC): traditionally they're savers, not spenders. This poses problems for the Chinese Government as it tries to get local spending to start driving the local economy.

Further, what do you mean by "middle class in China (by our standards)"? Are you measuring "middle class" by relative income or something else? The important point here being that if it were to be income based then a "middle class" person in China earns substantially less than a "middle class" person in the USA. The important point here being that a GF-2 or GH-3 or D7000 or 5D MarkII is going to be on sale in China for roughly the same price as it is in the USA, except in local currency. Thus the relative cost of such equipment is substantially higher.

"They want the same gizmos everyone else wants." - for the Internet generation, I think that's true but for those in their 30s and older, I'm not so sure. I work in the USA with Chinese expats and their purchasing and spending behaviour is completely different to that of local people, even though they're earning a similar wage.

I think it would be useful to see sales figures per country, vs expected sales, before it is safe drawing any conclusions like you have.

I agree with you - it would be good to see all that information, but obviously we won't. And I agree with your points about the spending cultures being different, and the dollar value of "middle class" being different, etc. But the fact is that there a MANY people in those countries spending increasing amounts of money on all kinds of stuff. My basic point is that manufacturers may have underestimated the rapid rate of demand growth from *non-traditional* markets.
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Mark D Segal (formerly MarkDS)
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« Reply #25 on: June 17, 2011, 03:28:39 PM »
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Looking at it with a sense of humor the situation reminds me of Monty Python's famous Cheeseshop sketch:
http://www.montypython.net/scripts/cheese.php

You could have saved everyone the trouble of reading the script when the sketch itself is readily available.
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dreed
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« Reply #26 on: June 17, 2011, 03:31:52 PM »
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There's one other aspect that might be impacting availability of goods in the USA: value of the US Dollar. With the US dollar now being worth significantly less than it was 5 years ago, unless manufacturers increase the prices of existing products (which at least Canon are doing with new lenses they bring to market), then the MSRP is going to deliver them a smaller profit.
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Wayne Fox
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« Reply #27 on: June 17, 2011, 03:33:57 PM »
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Mark's thoughts are well stated, as the owner of a small camera store who is struggling through this right now, without the tsunami consumers would see few issues except for some of the more exotic glass, and in Nikon's case the D3x which has very little demand at this point in time.  

While changes in manufacturing and inventory polices setup the current situation, the tsunami itself is really the issue. No company, let alone an entire country, could afford to set in place any plan that would mitigate issues from such a cataclysmic event.   Even companies with no actual plants in the affected area purchase parts from other companies that no longer exist or are damaged too severely to be back to normal.  While companies like Canon and Nikon all scramble to find alternative suppliers, rolling blackouts throughout Japan affects production for these alternative suppliers,  who then produce less with more demand.

On the bright side, we see improvements in many of the more popular bodies (5dmark2, 7d, d700 and d7000), enough that we even have some in stock and available at times , as well as many lenses.  Also cameras like G12's and s95's are beginning to trickle in again. Canon has told us things should be approaching normalcy by July (we'll see), Nikon still isn't projecting much. We are almost back to normal inventory for the Nex-5 and 18-200mm lens (pretty popular right now) as well as the a55.   As far as the GH-2, the GF and GH cameras (which I don't carry) have always been a difficult find ... Panasonic really doesn't seem committed to them. Not sure how much of that was tsunami related and how much just panasonic never really trying to produce that many.
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Mark D Segal
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« Reply #28 on: June 17, 2011, 03:35:16 PM »
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There's one other aspect that might be impacting availability of goods in the USA: value of the US Dollar. With the US dollar now being worth significantly less than it was 5 years ago, unless manufacturers increase the prices of existing products (which at least Canon are doing with new lenses they bring to market), then the MSRP is going to deliver them a smaller profit.

Yes but a smaller profit is better than no profit, so unless there is a fundamental demand:supply imbalance, there's no opportunity cost continuing to supply the US market, as long as they recovered their variable costs.
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Mark D Segal (formerly MarkDS)
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« Reply #29 on: June 17, 2011, 03:40:22 PM »
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Yes but a smaller profit is better than no profit, so unless there is a fundamental demand:supply imbalance, there's no opportunity cost continuing to supply the US market, as long as they recovered their variable costs.

Just because a market is profitable doesn't necessarily mean it makes sense to enter or stay there - manufacturers of goods have limited supply (duh), so they do ROI calculations. It is possible that other markets have higher ROI due to FOREX, taxation, potential for future growth by investing in market share now, etc. than the US, which would make them more attractive.
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Mark D Segal
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« Reply #30 on: June 17, 2011, 03:55:40 PM »
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Just because a market is profitable doesn't necessarily mean it makes sense to enter or stay there - manufacturers of goods have limited supply (duh), so they do ROI calculations. It is possible that other markets have higher ROI due to FOREX, taxation, potential for future growth by investing in market share now, etc. than the US, which would make them more attractive.

You're missing my point - the key issue is "manufacturers have limited supply" - and its not "duh" - it's a real question. What is the supply:demand balance? We don't know that. In an excess demand scenario it pays to prioritize the higher value markets - sure; but in a balanced demand:supply scenario unless the US market is so crummy that they can't even recover their variable costs, it still pays them to stay there. They were there already. The point I'm getting at is that no matter how I turn this issue around in my mind, I can come to only one of two conclusions: the US market at current exchange rates has become so toxic that manufacturers can't even recover variable cost (which I think may be a stretch, but I have no data to verify this and never will see any). OR, there are supply bottlenecks relative to demand.
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Mark D Segal (formerly MarkDS)
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« Reply #31 on: June 17, 2011, 04:04:16 PM »
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You're missing my point - the key issue is "manufacturers have limited supply" - and its not "duh" - it's a real question. What is the supply:demand balance? We don't know that. In an excess demand scenario it pays to prioritize the higher value markets - sure; but in a balanced demand:supply scenario unless the US market is so crummy that they can't even recover their variable costs, it still pays them to stay there. They were there already. The point I'm getting at is that no matter how I turn this issue around in my mind, I can come to only one of two conclusions: the US market at current exchange rates has become so toxic that manufacturers can't even recover variable cost (which I think may be a stretch, but I have no data to verify this and never will see any). OR, there are supply bottlenecks relative to demand.

Ah, I see. Or it could be a combination of severely limited supply combined with the need to capture new markets. For example, perhaps Panasonic keeps insatiable Chinese customers happy by pushing units there so that, say, Canon doesn't take too much market share. If Panasonic neglects a market which is growing ~10% a year for over ten years while their established western markets are stagnating for years on end, it might be prudent to neglect established markets especially when supply is constricted.
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Mark D Segal
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« Reply #32 on: June 17, 2011, 04:17:47 PM »
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Ah, I see. Or it could be a combination of severely limited supply combined with the need to capture new markets. For example, perhaps Panasonic keeps insatiable Chinese customers happy by pushing units there so that, say, Canon doesn't take too much market share. If Panasonic neglects a market which is growing ~10% a year for over ten years while their established western markets are stagnating for years on end, it might be prudent to neglect established markets especially when supply is constricted.

Also a plausible scenario.
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Mark D Segal (formerly MarkDS)
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« Reply #33 on: June 18, 2011, 03:36:36 AM »
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With any luck the supply problems will encourage people to actually use what they have rather than endlessly writing about and lusting over what they don't have.
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« Reply #34 on: June 18, 2011, 04:24:05 AM »
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With any luck the supply problems will encourage people to actually use what they have rather than endlessly writing about and lusting over what they don't have.

I've written about this elsewhere. It's amazing how profoundly digital changed the entire product cycle of the photo industry. There are pros who shot with the same camera for literally decades in the film era. I've done photography "seriously" for only 12 or so years, and my two film cameras are 30+ years old and still going strong, and I can't imagine ever changing them.

Original 5D was good enough for thousands and thousands of photographers, but I bet many of them upgraded when 5DII came out. There are significant incremental technology upgrades not necessarily related to IQ, such as live view, faster AF, or dedicated MLU button Tongue, and those are certainly part of the reason why people upgrade more often than in the film days.

It's also a tough change for the manufacturers. If you don't release a revolutionary or at least a hugely evolutionary camera every year, you can easily be left in the dust of your competition and shunned by the buying public.
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« Reply #35 on: June 18, 2011, 05:06:43 AM »
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It's also a tough change for the manufacturers. If you don't release a revolutionary or at least a hugely evolutionary camera every year, you can easily be left in the dust of your competition and shunned by the buying public.

I certainly don't disagree with anything you've said.
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michael
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« Reply #36 on: June 18, 2011, 07:27:05 AM »
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I thought that Mark made it quite clear that he didn't want to buy "grey market", which is what it would be if he'd purchased outside of the US.

There are even some product brands which are stopped on private import by US customs because a US entity owns the trademark.

Michael
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feppe
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« Reply #37 on: June 18, 2011, 08:04:06 AM »
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I thought that Mark made it quite clear that he didn't want to buy "grey market", which is what it would be if he'd purchased outside of the US.

Mark titled and wrote the article from a supply chain perspective, but had plenty of personal anecdotes which are understandably restricted to very local US experiences. Since it's a global forum, many of us are highlighting the situation outside the US for a more complete picture, and putting forth alternative reasons why Mark and other Americans might be seeing local stock shortages.

I doubt any of us who are talking about stock outside of US were suggesting him to import, unless the main site has suddenly become a forum for seeking personal advice for a few individuals Tongue

I find it hard to see how a company which owns a trademark could possibly restrict personal imports and even harness public funds to enforce it, but I've heard stranger things.
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MrIconoclast
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« Reply #38 on: June 18, 2011, 10:37:56 AM »
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Isn't this the truth!! 

Ordered a lens about a week ago, that was clearly labeled as being in stock.  I even got an estimated arrival date about 8 days into the future.  Today I get a message that the item is unavailable they don't know when it will be available.   This will kill future sales.  Who wants to buy into a system that has these problems? 
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EduPerez
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« Reply #39 on: June 20, 2011, 01:02:05 AM »
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This article remind me of something else I read sometime ago: "LensRentals Blog - State of the SLR Market -2009".
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